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Mind your language, regulator tells insurers as plaints rise

As many as 34,819 of 92,898 insurance related complaints are from the health sector

Mind your language, regulator tells insurers as plaints rise

Health insurance may form a small slice of the non-life insurance sector, yet it accounts for a third of consumer complaints.
The Insurance Regulatory and Development Authority (Irda) believes lack of clarity in policy documents is the root cause of this.

“If one-third of complaints are from the health side, I will conclude that the nature of communication on health insurance policies and the understanding of the policy by the consumer are areas of concern. Probably, the lack of clarity is reflected in the increasing number of complaints,” said J Hari Narayan, chairman, Irda.
There were as many as 92,898 complaints from the non-life sector till date of which 34,819 were from health insurance policy holders, as per Irda data.

An insurance policy, as a contingent contract, has to be specific and unambiguous. Among other things, the Contract Act, 1872, talks about consensus between parties of a given contract and is categorical that the understanding of the terms needs to be balanced.

Hari Narayan minced no words when he said the language used in policy documents is proving to be a headache.

“We need to think what is going wrong with our communication. We should look at the question of language… whether the usage of a local language will help, or the nature of the language, including its construction, needs to be changed.”

He pointed to rigorous legal documentation that are enforceable by law. Even in England, they have changed the structure of the language. What we use here has little resemblance to the language used in the UK.”

But Hari Narayan admitted regulation of language or wordings in policy documents can create complications despite tariff structures being denotified. “There is some merit in this concern expressed by the industry, but it’s not the whole truth. Wordings can be changed. While we are concerned about the changes, I don’t want more and more complex words to be used,” he said.

He emphasised the onus lay with the sender and not the receiver of the communication as far as policies go. “If the policy holder is not able to understand something in the policy, it is the fault of the insurer and needs to be addressed. Or it lies with the hospital or with the third-party administrators,” he said.

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