Irdai set to allow wellness programme along with life plans.
The Insurance Regulatory Development Authority of India (Irdai), the regulator for insurance companies, is set to allow the insurers to offer wellness programmes along with life insurance policies that can earn reward points for the policyholders.
These reward points can be redeemed for getting a discount during renewal.
The insurance regulator has circulated draft guidelines to insurance companies for feedback before issuing the final guidelines, as is the norm.
The insurance companies have been requesting the regulator for some time to allow them to offer wellness initiatives.
“Wellness initiative is a programme that may be offered to life insurance policy holders to help them maintain and improve their health and wellness by engaging in specific activities and behaviors,” the draft norms said.
“As part of such a programme, insurers may offer certain rewards to encourage policyholders to actively participate and reach specific levels of achievements,” Irdai said.
The regulator has made it clear that participation in the wellness programme by the policyholders will be ‘purely voluntary’.
The programme may be administered either by the insurer directly or in association with third party service providers, the draft norms said.
Life insurers may offer the wellness programme as an option under life insurance products or as a rider.
Those products can also be offered as an add-on feature to existing life insurance products, provided that the cost of such programmes does not materially affect the pricing assumptions or benefits offered under the product, Irdai said.
In all cases, life insurers need to file the details of the wellness programme as per the extant product filing procedure.
As part of the wellness programme, the life insurance companies will be allowed to offer the reward points to the policyholders based on specific levels of engagement with empaneled medical centres.
They could also offer redeemable vouchers for memberships in yoga centres, gymnasiums, sports clubs etc, and offer discounts on renewal premium or increase in the sum assured.
While allowing these host of services, there are also certain riders that the insurance regulator has prescribed for the life insurance companies.
The draft norms mandate that no wellness programme can be offered without it being filed or incorporated as part of the product in terms of product filing.
“The full details of the programme, different levels of expected achievements, criteria for measurements, the methodology used for arriving at the rewards and its administration shall be clearly specified.
"Further, the pricing impact of the programme shall be also disclosed upfront in the File and Use application,” the norms said.
In case the cost of offering such features is not material or where such expense is borne by the shareholders, the features can be extended to existing policyholders.
“There shall be no discrimination in providing any of the wellness and preventive features offered and in granting the reward points thereunder to the same or similar placed categories of policyholders of a particular product,” Irdai said.
Furthermore, if the insurer is offering the wellness programme in association with a third party, the names or trade logos of the third party cannot be used in any of the insurance advertisements but may refer to the services in generic terms.
Insurers have also been asked not to take liability towards quality of services offered by the third parties.
At the same time, the insurers have to monitor the quality of services offered by service providers and ensure that they have put in place appropriate mechanisms to discharge liabilities, the draft norms mandated.
“Insurers shall not receive any consideration amount for offering the third party services.
"Further, no payments shall be made by the insurers to the third party service providers other than the monetized value of the reward points redeemed by the policyholders,” the draft norms said.
Photograph: Mohammed Salem/Reuters
