IRDA is working on developing new norms for the standalone health insurance companies in India. At present, the health insurance companies follow IRDA regulations. New norms for health insurance companies will include risk-based capital adequacy norms, investment regulations, market conduct, disclosure issues, etc. These will apply to those companies who do health insurance business, as disclosed by the chairman of IRDA, Mr. Rao.
Incidentally, at present there is only one company in the health insurance market in India, namely, Star Health and Allied Insurance. Apollo Group and Germany-based Deutsche Krankenversicherung have applied for a licence to set up a health insurance company called Apollo DKV Insurance Company. On similar lines, Aetna, a health insurer in USA, has been eyeing Indian market and is expected to enter it. Other companies who have shown interest in Indian health insurance market are United Healthcare, Cigna and Bupa.
The need for new regulations is even more important considering the fact that so many foreign players are targeting the Indian health-insurance market. With the coming of new players, old norms, which govern life and non-life insurance companies, will not suffice and customized regulations, specifically for the health-insurance sector will be needed.
Indian health insurance is expected to have a market potential of Rs. 15,000 crores, of which only 10% was tapped until the end of fiscal year 2004-2005. This leaves a huge void that invariably will be filled by new companies. With better norms, consumer interests will be taken care of and the government can better control companies.
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