‘No clarity on accountability in draft medical insurance rules’

Draft medical insurance regulations by the Insurance Regulatory and Development Authority (IRDA) has no clarity on accountability, the Bombay high court was informed on Thursday.

A division bench of Chief Justice Mohit Shah and Justice Nitin Jamdar was hearing a public interest litigation filed last year by activist Gaurang Damani on medical insurance woes. The PIL highlighted the plight of nearly 7 crore consumers paying Rs 13,000 crore as medical insurance after Third Party Administrators (TPA) stopped offering cashless mediclaim benefits. It also focused on the absence of any kind of regulation to govern this industry. Subsequent to the court’s order, IRDA in June 2012 published on its website draft regulations which will govern the medical insurance industry.

Damani submitted that while the draft regulations are "good", some issues need to be addressed. "There is no clarity on accountability if there is violation on any of these new regulations. Just like SEBI enforces a fine on an errant corporate house, there should be something similar in the regulations, so that accountability is introduced," he explained. He also said there is no mention in the draft regulations about the method for fixing package rates for different ailments. "This was the primary reason this court was moved after the cashless facility was discontinued," said Damani.

To a query from the judges, Damani replied that he has sent these suggestions to IRDA but has not heard from them. The judges said he must await final regulations of IRDA. But Damani said there is no final date or indication when the final regulations will be implemented.

IRDA’s advocate Paritosh Jaiswal said suggestions and objections have been invited to the draft regulations and will be considered accordingly. He said since the draft regulations are published, the PIL has achieved its purpose and must be disposed of. The judges have adjourned the hearing to September 6.