Chennai: Indian non-life insurers are free to fix region-wise premium for health insurance policies. Speaking on the sidelines of the seminar, General Insurance-Life after Detariffing, here on 8 June, 2007, C S Rao, chairman, Insurance Regulatory and Development Authority (IRDA) said, "Traditionally health insurance is a non-tariff business. The companies are free to decide on differentiated premium rates."

Currently all the non-life insurers follow a uniform pricing pattern across the country for health insurance policy. The net effect is that the rural / semi urban policyholders subsidise the policyholders in bigger cities where the healthcare costs are high resulting in higher claims outgo for the insurers.

If companies adopt region wise pricing pattern then the health insurance policyholders in the eastern region, small towns and rural areas will be benefited from lower premium outgo.

It should be noted that insurers of late are capping the benefits claimable under different heads, hospital room rent, doctor fees and others, on the grounds that the policyholder should also bear some portion of the expenditure and that the hospitals have jacked up their rates.

In the case of motor insurance, insurers charge premium based on the area in which the vehicle plies, in respect of other policies the companies are silent.

According to Rao, general insurance council has been asked to draft a glossary of insurance terms and its meanings so that all the non-life insurers follow a uniform language. "This would help the policyholders to understand their policy condition clearly. "The insurers should also print in the policy condition as to what is covered and what is not covered."

He also said a team of officials would start scrutinising all the insurers to find out whether they have complied with the norms.