Health insurance portability allows customers to switch insurers without losing their existing benefits, including completed waiting periods and no-claim bonuses. According to reports from Mint Money, this system was introduced by the insurance regulator IRDAI years ago to prevent customers from feeling trapped with poor insurers. The process was designed to encourage better service and fairer pricing in the health insurance market.
Recent reporting by Mint Money has identified serious issues with how insurance agents are using the portability system. One major problem involves agents treating portability as a profit-making opportunity rather than a customer service tool. Industry data shows that approximately one in four customers don't renew their policies, with many of these customers potentially switching through portability. Some agents are paid commissions for switching customers between insurers, which is against the rules but still occurs frequently. The misuse extends to agents selling entirely-new policies to customers as if they were porting, which customers often don't notice until they attempt to file a claim.
The second major problem identified is a lack of transparency in the portability system. As reported by Mint Money, after 15 years of operation, IRDAI still doesn't share sufficient information about porting activities. Insurers don't publicly disclose how many policies are ported each year, making it impossible to verify if rules are being followed properly. The system requires all porting requests to go through a central system that allows new insurers to see past claims history, but there's no data on claims rejected after porting, leaving customers without clear recourse when issues arise. This lack of transparency creates significant customer protection gaps, particularly when claims are filed.
The current portability system creates potential risks for customers, particularly when claims are filed. According to Mint Money reporting, some agents sell entirely-new policies to customers as if they were porting, which customers often don't notice until they attempt to file a claim. This practice can result in customers losing their old benefits completely, including facing unexpected waiting periods. The lack of transparency means customers may not realize they've been misled until it's too late to recover their previous coverage benefits. These gaps are compounded by the fact that there's no data on claims rejected after porting, leaving customers without clear recourse when issues arise during the porting process.
