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HDFC acquires Apollo Munich Health Insurance. What this means for a policyholder

Your existing policy contract, features, benefits, terms & conditions, will not undergo a change till expiry.

, ET Bureau|
Updated: Jun 24, 2019, 05.15 PM IST
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The new company cannot make any changes in the claim settlement procedure.
Mortgage major, HDFC, Wednesday agreed to acquire Apollo Hospitals Group's entire 50.8 percent stake in Apollo Munich Health Insurance for Rs 1,336 crore and also the 0.4 percent stake held by a few employees for Rs 10.84 crore. So, what does this mean for the policyholder? ET Wealth answers queries you might have as a policyholder.

Can policy features, wordings and terms be tweaked by the acquiring company?
Your existing policy contract—features, benefits, terms and conditions— will not undergo a change till their expiry, as an acquiring entity will have to honour the agreement till its expiry. However, renewal, which is done annually in case of general insurance contracts, can be a different story. Your renewed contract could see changes, depending on calls taken while reviewing products.

“It makes sense to go through your policy renewal contract carefully to ensure that no new exclusions, co-pay or sub-limits have been introduced,” cautions consumer activist Jehangir Gai. Again, this applies to all policies that come up for renewal, irrespective of whether a change in ownership has taken effect or not.

However, modifications will not be made overnight. “To introduce changes, the new company will have to seek the approval of or refile the product with the insurance regulator. Next, the policyholders will have to be informed at least 120 days before the changes are implemented,” says Mahavir Chopra, Director, Health, Life and Strategic Initiatives, Coverfox. com.

Can the new company hike my premium at renewal time?
A hike in premiums will not take place merely on account of change in ownership. Loss ratios for particular segments and infl ation could also play a role. “Over a period of time, there could be some changes in pricing. However, that could have happened even if the existing entity had continued as your insurer,” points out Chopra. Until 2013, insurers often hiked renewal premiums if policyholders filed a claim in the previous year. The Insurance Regulatory and Development Authority of India (Irdai) stepped in to put an end to the practice. Now, insurers’ premium revisions are linked to inflation or their claim experience for particular segments and age brackets. The new insurer will have to adhere to the regulatory guidelines.

Will any products be discontinued?
For now, HDFC ERGO will retain products from both sides. “There will be no rationalisation in products in the near term. If customers want to move to a new product, they can,” says Ritesh Kumar, MD & CEO, HDFC ERGO. In the past, acquiring entities have withdrawn products that have similar offerings to avoid duplication. “If the company decides to rationalise similar products, then customers of one company are usually given the option to port to the new product without any lengthy process. The change need not be adverse,” says Kapil Mehta, Co-founder and CEO, Securenow.in. Apollo Munich’s customers have an upper hand here. “The product suite is unlikely to change as Apollo Munich has good products. HDFC customers have more to gain as they can now avail of Apollo Munich’s more specialised offerings,” says Chopra.

Will the new company retain the continuing benefits accrued till now on my policy?
Yes, it will have to honour existing commitments. For example, you will get to retain the cumulative bonuses. This is earned when you do not make a claim in a policy year, resulting in enhancement of sum insured. Then, there is waiting period credit for pre-existing diseases. “The acquiring entity cannot arbitrarily withdraw benefi ts offered as part of insurance contracts,” says Gai.

What will be the implications on claim settlement procedure?
The new company cannot make any changes in the claim settlement procedure. “The regulator is very particular about the claim settlement process. They will make sure that there is no change or the change is for the better, from the policyholders’ perspective,” says Mehta.

Will there be a change in contact details for intimation of claims and cashless network of hospitals?
This is an area that could see a change soon after the merger is effective. Keep track of communication from the new entity on the composition of cashless network of hospitals and points of contact for intimating the claims. “The network of hospitals can see a change on a daily basis, even otherwise. It need not happen at the time of renewal,” says Mehta. You need to monitor the list, available on insurers’ websites, before choosing a hospital. “Presently, for cashless claim services, policyholders will have to access L&T General Insurance (HDFC General) Insurance network of garages and hospitals. We intend to make this network available to both entities in due course,” HDFC ERGO had told L&T General’s policyholders in 2016.

What if my claim settlement is in process at the time of change in ownership?
In case of ongoing claims, the company is bound to settle them as per your policy’s terms and conditions.

Will the customer touchpoints and grievance redressal points of contact remain the same?
Over a period of time, the company may decide to down the shutters on some branches or relocate them. For example, in 2016, HDFC ERGO had informed L&T General’s customers of change in the registered and corporate office addresses, customer care toll-free number and e-mail IDs. It also intimated them about a list of branches that had ceased to exist and the corresponding new branches they needed to approach instead. Later, you will may have to visit the new company’s website for renewals and other service requests.
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