The Insurance Regulatory and Development Authority (IRDA) on recently has issued a draft circular on “Life Insurance Products for People Living with HIV / AIDS (PLHA)” to all insurers.
All Life insurers shall put-in place Board approved underwriting policy with respect to life insurance products for PLHA, IRDA said in the circular.
The Board approved underwriting policy shall..
Provide clear guidelines on PLHA; indicate all the possible risks that can be considered for underwriting with the eligibility criteria to consider such proposals in terms of medical and non-medical parameters; and specify all the risks which would be deferred and denied/declined, the circular said.
The life insurance cover for PLHA will not be denied if the eligibility criteria according to the Board approved underwriting policy are satisfied. The underwriting policy should clearly indicate the specific loadings applicable for PLHA with reference to the different stages of the disease.
The insurer should design a suitable proposal form (if any) to capture necessary information to underwrite the proposal in accordance with the Board approved underwriting policy.
With respect to persons who are HIV negative at date of commencement of the contract and subsequently found to be HIV positive during the term of the policy, the insurers should not reject / or deny any claim, on such grounds, IRDA added.
In such cases, the underwriting guidelines & claims settlement guidelines applicable at the time of commencement will be applicable.
IRDA further said that health Insurance products offered by Life Insurers who are HIV negative at inception of the policy and acquire HIV / or AIDS (PAHA) after commencement of insurance policy may offer products with any of the following designs such as:
** PLHA as one of the Critical Illness;
** Providing a lump sum on becoming HIV positive;
** Conversion of Lump sum amount into annuity for life in the event of the insured becoming HIV positive during the term of the contract;
** Providing health cover on benefit basis, excluding only the treatment for HIV / AIDs
The IRDA has invited feedback on the draft circular within 15 days. The Circular comes into effect from April 01, 2014.
All the insurers should put in place the Board approved underwriting manual, clams manual, proposal form and all the other necessary systems before this date.
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