CIOIN

In accordance with the new guidelines set by the Insurance Regulatory and Development Authority (IRDA), health insurance policyholders can now switch among insurers just like consumers can do among cellular service providers with the help of Mobile Number Portability. The guideline will be effective from July 1, 2011.

At present, most health insurance policies do not allow a customer to avail of insurance coverage for medical procedures for some 'pre-existing diseases' such as a bypass surgery within the first year of a policy. This straightforward translates into one of the biggest challenges for policyholders intending to change their policies, as they fear losing the cover the moment they switch the insurer.

However, the portability of health insurance policies has put in place a structure that offers flexibility on pre-existing diseases and hassle-free service to those with transferable jobs or a proclivity for switching insurers.

As per the guidelines issued by the insurance watchdog, all insurers have been directed that the entire database including the claim details of the policies, where the policyholders has opted for portability, have to be shared among their counterparts. This sharing of database, if requested by the counterpart, has to be executed within seven working days. All applications for the portability have to be acknowledged by the insurers within three working days.

The CIO community within the health insurers is exhibiting mixed reactions towards the pressure on IT that the new system proposed by IRDA can supposedly effectuate. Eswaranatarajan, Head operations and Technology, ICICI Lombard GIC, was quite optimistic that his IT systems are robust enough to handle the churn that may arise once the new portability system kicks in. "Our IT systems are quite capable of handling the flux that will be introduced by the health insurance portability. I am confident that our systems will be able to comply with the guidelines, enable and deliver portability. I do not foresee any major challenges on that front," he said.

However some CIOs anticipate challenges on the IT front. C Mohan, CTO, Reliance Life Insurance which forayed into the health space in 2010 feels that the health insurance portability could present some challenges to certain players in the market. "As a CIO, the biggest challenge I see will be in the field of consolidation and system compatibility as conventionally the systems that were used to create these products are of a different nature. So when a customer avails the health insurance portability there has to be consolidation from organizations' perspective. If a customer wants to move from the floater policy of one company to that of another, the product features will be different, making seamless portability difficult. At present, all products are totally unique and different," he said.

Consolidation will be a challenge to ensure that most of the features of competing products are made similar to some extent. "Without industry-wide consolidation, portability will not happen seamlessly because all companies have different systems to handle health insurance. For effective portability, standardized system and platform integration has to be introduced. Otherwise, portability may prove quite challenging," substantiated Hitesh Arora, EVP & CIO, Max New York Life Insurance.

Speaking on conditions of anonymity, the CIO of leading insurance company stated that health insurance portability might pose a few challenges from a technology standpoint. Data transfer between two organisation will emerge as a roadblock. "There is no common model or pattern for data sharing existing across the industry, which can be an impediment for effective health insurance portability. Also, there is no enough clarity on the extent of transactional information that needs to be shared," he pointed out.

Nevertheless, as more clarity comes in on this matter over the next few days, CIOs in this space will definitely figure out ways to crack the code of the Health Insurance Portability, Arora said.