Mumbai: India’s insurance regulator would push basic, no-frills health covers and create performance scorecards for both insurers and hospitals as the sector, facing perennial patient criticism, battles to remain profitable-and commercially viable-after having settled ₹85,000c crore in claims last fiscal, top industry executives told ET.
Industry body CII is helping the Insurance Regulatory and Development Authority of India (Irdai) design the plan, said the chief executives at several insurers aware of the plan. The exercise, said the executives, would add muscle to the industry-one of the least penetrated on the planet-and help ensure predictability to a sector the regulator has itself described as being in “unstable equilibrium”.
The scorecards, slated for rollout from June 2026, are designed to enable policyholders to make informed choices and to nudge behaviour through transparency.
Also, the regulator has proposed a policyholder-first commercial framework that links hospital tariffs to performance metrics. Faster claim settlements and adherence to turnaround times could fetch better rates for hospitals, while delays, billing discrepancies and documentation gaps may trigger tariff downgrades.
The proposed basic no-frills health insurance product is to widen coverage and improve affordability. The product will sit alongside a push toward preventive healthcare and wellness led engagement, marking a shift from pure hospitalisation led models.
To address long standing disputes between insurers and hospitals, the regulator is mandating formal contracts with clear rules on billing, claims processing and dispute resolution. Cashless facilities cannot be withdrawn abruptly due to commercial disagreements, and ad hoc suspensions of hospital networks will be discouraged.
