IRDAI Flags lapses in Health Insurance Claims

Blog post description.

NEWS

7/15/20251 min read

In a move to protect policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has issued show-cause notices to eight major health insurers for serious lapses in claims handling. This action comes in the wake of an extensive audit conducted under the May 2024 Health Insurance Master Circular, signaling the regulator’s intent to crack down on opaque and unfair claim practices.

🚨 Who’s Under the Scanner?

The insurers flagged by IRDAI include:

  • Niva Bupa Health Insurance

  • Star Health and Allied Insurance

  • Care Health Insurance

  • ManipalCigna Health Insurance

  • New India Assurance

  • Tata AIG General Insurance

  • ICICI Lombard General Insurance

  • HDFC ERGO General Insurance

These names represent a significant portion of India’s health insurance market—raising concerns about systemic issues in the sector.

📉 What Went Wrong?

According to IRDAI, the flagged insurers were found guilty of:

  • Delayed settlements despite complete documentation

  • Unjustified rejections of claims

  • Excessive deductions without proper explanation

  • Non-transparent communication, especially in customer information sheets (CIS)

The regulator found that some CIS formats were overly technical, leaving policyholders confused about their coverage terms.

🔍 Why This Matters

Health insurance is a lifeline for millions of Indian families. When insurers delay or deny claims unfairly, the very purpose of insurance—financial protection—gets undermined. IRDAI’s firm response sends a clear message: insurer accountability is non-negotiable.

The action also highlights a broader issue—many health insurers still rely on outdated internal systems that lack transparency, flexibility, or customer empathy.

🛠️ What IRDAI Has Ordered

IRDAI has instructed the insurers to:

  • Submit detailed explanations for the lapses

  • Take corrective actions immediately

  • Update CIS formats for better clarity and regional language inclusion

  • Upgrade internal systems to avoid repeat errors

The show-cause notices are likely to be followed by penalties or compliance mandates if responses are unsatisfactory.

🧭 What Policyholders Should Do

If you’re a health insurance policyholder, here are a few tips:

  • Always demand a clear explanation for deductions or rejections

  • Read your CIS carefully—ask your insurer for a simplified version if needed

  • Escalate delays to IRDAI’s Integrated Grievance Management System (IGMS)

🧠 A Broker’s Take

For brokers and advisors, this development is a wake-up call. one must:

  • Educate clients about their rights

  • Ensure transparency in product comparison

  • Push insurers to be more responsive and fair

The future of health insurance in India depends not just on digital innovation—but on trust and ethics.

Have questions about your health insurance claim or how to protect your rights as a policyholder?
💬 Contact us @ theinsurancebulletin@gmail.com