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The Art of Self-Regulation for the Insurance Sector


Summary

self regulation

Time and again IRDA, the Regulator of the Insurance sector, has had to come down with a heavy hand to protect the Consumer (Insured) from getting entangled in a web of complexities that the consumer should ideally not have to contend with.

Some time back, it had to intervene, to ask insurers to review claims denied for Antibody Cocktail Therapy (ACT), on the grounds that this was an experimental treatment. “The authority has come across instances of denial of claims and/or deduction of expenses incurred towards ‘Antibody Cocktail Therapy’ treatment for Covid-19, under the pretext that the said therapy is an experimental treatment,” the IRDA had said in a circular issued to the CMD/CEOs of General and Health Insurance.

Twenty-two long years since the insurance industry was opened up for private participation and yet Insurers haven’t reached a place where they can self-regulate, so much so that, at times, this (the absence of self-regulation) appears to be a deliberate ploy.

Insurers seem to work at two opposite ends of the spectrum.

  1. More often than not, insurers seem to deny claims, taking advantage of the lackadaisical redressal mechanism in the country-it is as if, they are cocking a snook at the retail customer, saying, “What can you do?” Where can you go?
  2. Insurers hesitate to make decisions to avoid making the wrong ones, which can literally cost the Insurer millions in fines at times. The general approach is to let the regulator decide and leave the implementation to them.

It has been more than two years since the deadly virus was, well, let’s say, discovered, and all of humanity has been experimenting for a cure, one way or another. There have been homegrown remedies that involved turmeric and steam and a lot of other gases, but there were also a lot of experimental drugs (like Remdesivir) that worked on critical patients.

All of the drugs authorized for use by the drug regulatory authorities for countries had been for emergency use, of them.

If that was not enough, ACT had already been authorized for Emergency Use Authorization in May 2021 by CDSCO, the Central Drugs Standard Control Organization, India’s regulator for pharmaceuticals.

An antibody cocktail is a combination of two types of genetically engineered antibodies. These are similar to the antibodies produced in a human body but different because they are created in a lab. The antibody cocktail is administered for the treatment of mild to moderate coronavirus disease in adults and pediatric patients (12 years of age or older, weighing at least 40 kg) who are confirmed to be infected with SARS-COV2 and who are at high risk of developing severe COVID-19 disease and do not require oxygen at that stage. The administration of ACT on Covid-19 patients in India prevented the escalation of mild cases to severe, which in turn prevented the need for hospitalization. By now, we all know what a blessing that turned out to be.

Swiss major Roche has gotten approval for its antibody cocktail comprising two antibodies: Casirivimab and Imdevimab.

Cipla launched the medicine in India at a price of Rs. 59,750 per patient.

All of these were facts, but the insurance regulator had to intervene.

IRDA has now asked the insurers to put in place a mechanism that would keep them updated on the developments from time to time and incorporate appropriate checks to ensure claims do not get denied because someone was not aware of the developmental strides in the medical field.

As sad as the case of the hapless insured sounds, it remains the sad truth. Does it prompt the question, “Do insurers deny claims based on medical grounds or the likelihood of an insured taking them to court?”

An industry is only as evolved as the way it treats its weakest link (the insured, in this case), that being the case, our industry seems light years from a place that can be called evolved.

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write mostly on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Marketing Management.