A Investment analyst on Monday hit out at the insurance industry, calling it the “most consumer unfriendly” sector and accusing the regulator of being complicit. “The insurance industry is the most Consumer-Unfriendly and is duly supported by a friendly regulator,” he wrote on X.
He said insurers were increasing premiums arbitrarily even after the government’s recent move to abolish GST on health and life insurance. “There is no control on how premiums are calculated or increased. Claims are denied left, right and centre and now,” he said.
“After crying for so long that GST should be reduced, when the Government has eliminated GST on Life and Health insurance they are quietly increasing premiums quoting loss of ITC benefits. @FinMinIndia @PMOIndia you need to evaluate the working of #IRDA,” he added.
His post triggered a flood of responses from analysts and policyholders.
An Research analyst said the regulator’s approach compared poorly with SEBI. “Absolutely agree. I recently had a conversation with a friend who is a CS, where we debated SEBI vs IRDA. If IRDA were to adopt some of SEBI’s practices, many insurance companies could find themselves in trouble,” he said.
Another user, alleged that insurers were gaming the GST abolition. “True earlier quote for my mom’s September renewal was low once the GST was announced they increased the earlier quote substantially now giving GST abolition discount… Very unprofessional and Fraud attitude.”
One policyholder said: “I agree. Indian Health Insurance sector is a scam. Premium increase is non transparent and can be increased by any quantum. Many people discontinue after few years owing to steep hike in premium.”
He echoed the view. “Exactly! Removing GST was meant to benefit policyholders, not give insurers a fresh excuse to hike premiums.”
Another analyst highlighted new revision norms by a state-owned insurer. “Got call regarding medical insurance renewal from National Insurance… they have changed the terms and conditions for the policy: Earlier premium revision used to happen in every 5 years but now revision will happen every year and there will be hike around 15-18% P.A.,” he wrote.
The backlash comes just weeks after the GST Council exempted individual health insurance from the Goods and Services Tax. The move, effective September 22, slashes the tax rate from 18% to nil. But many fear insurers may not pass on the benefits and instead raise base premiums.
