Insurers to disclose their approach on coverage for people with mental illness, HIV: Irdai

Regulator Irdai has asked all insurers to make public their underwriting philosophy and approach with regard to insurance coverage for persons with disabilities, HIV/AIDS and mental illness, a move aimed at improving transparency.

Regulator Irdai has asked all insurers to make public their underwriting philosophy and approach with regard to insurance coverage for persons with disabilities, HIV/AIDS, and mental illness, a move aimed at improving transparency. The insurers have been asked to publish the information on their respective website.

All insurers (life, general and health ) have to comply with the directions by October 1, 2020, the Insurance Regulatory and Development Authority of India (Irdai) said in a circular. Irdai said it is considered essential that the targeted population of every insurer shall have complete information on the philosophy that insurers adopt while complying with the provisions.

As per Irdai's instructions, all insurance companies have to disclose underwriting philosophy of offering insurance coverage to persons with disabilities and people affected with HIV/AIDS and mental illness. As per the provisions of Irdai (Health Insurance) Regulations, 2016, every insurer is required to evolve a health insurance underwriting policy covering approach and aspects relating to offering insurance coverage not only to standard lives but also to substandard lives.

Insurance companies are also required to comply with the provisions of the HIV and AIDS Prevention Control Act, 2017 and Mental Healthcare Act, 2017. Meanwhile, the regulator has also asked all insurers to necessarily obtain Legal Entity Identifier (LEI) code by July 31, 2020.

LEI is a 20-character unique identity code assigned to entities who are parties to a financial transaction. It is a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis. The Reserve Bank of India has implemented the requirement of LEI in OTC derivatives markets, banking sector, and government securities market in a phased manner.

LEI can be obtained from Legal Entity Identifier India Ltd. Irdai further asked the insurers to advise their existing corporate borrowers having total exposure of Rs 50 crore and above, who have not obtained LEI till now, to obtain it by June 30, 2020. Insurers have also been asked not to grant renewal/enhancement of credit facilities if borrowers do not obtain LEI. Also, insurers cannot sanction new loans if the borrowers do not have LEI.