Insurance Regulatory and Development Authority of India (IRDAI) has set up a sub-committee under its Insurance Advisory Committee (IAC) to review the functioning of private health insurers in India. This move signals a possible major overhaul in health insurance, covering areas like claims settlement, pricing, product design, and grievance redressal.
Even though the health insurance sector has grown rapidly with record premium collections of ₹1.24 lakh crore in FY26 there has been rising dissatisfaction among customers due to:
- High premiums (insurance becoming expensive)
- Poor claim settlement experience
- Disputes between hospitals and insurers over pricing
This has pushed IRDAI to step in and improve the overall consumer experience and affordability.
Background
Health insurance is meant to protect individuals from high medical costs, but in recent years:
- Many people have complained about claims being rejected or delayed
- Hospitals and insurers often disagree on treatment costs (tariffs)
- Premiums have increased sharply due to medical inflation
- Coverage is still low (insurance penetration is limited in India)
This shows a gap between what policyholders expect and what insurers deliver.
What Will the IRDAI Panel Do?
The panel will conduct a comprehensive review of the entire health insurance ecosystem, focusing on improving both efficiency and trust.
- Improving Claims and Consumer Experience: The committee will examine how claims are processed and settled and ways to reduce delays and rejections along with better systems for grievance redressal.
- Fixing Pricing and Hospital Tariffs: A major issue is the conflict between hospitals and insurers over treatment costs. Hospitals may charge high prices and insurers may reject or reduce claims. The panel will study pricing of treatments & suggest ways to rationalise costs.
- Product Design and Coverage Expansion: The panel will also review whether current insurance products meet consumer needs and how to design simple, affordable, and comprehensive policies.
- Strengthening Systems and Reducing Fraud: The committee will look at digital systems to improve efficiency, fraud detection mechanisms and expansion of platforms like National Health Claims Exchange.
- Coordination with Government Schemes: The panel will also examine how private health insurance can better align with government health schemes, so that both systems work smoothly together instead of separately.
- It will focus on complementarity, where private insurers support and fill gaps in public schemes;
- Portability, which allows individuals to switch between policies or providers without losing benefits; and
- Convergence, meaning better integration of systems and processes to create a more seamless and efficient healthcare experience for policyholders.