A parliamentary exchange in India has revealed that the country’s insurance regulator cannot account for why roughly one in 12 health claims goes unpaid – a structural gap in the oversight of a market processing tens of millions of claims each year, and one that sits uneasily alongside a sharp rise in policyholder disputes.
The government’s response, delivered to the Lok Sabha on July 24 by Minister of State for Health and Family Welfare Prataprao Jadhav and reported by The Hindu Business Line, confirmed that no proposal is under consideration to require health insurers to give overriding precedence to the clinical opinion of treating doctors in settling claims. The more consequential disclosure, however, was regulatory: the Insurance Regulatory and Development Authority of India (IRDAI) holds no data on why those claims are denied.
The government told Parliament that insurers assess claims by weighing clinical records, treating doctor assessments, applicable medical standards, standard treatment protocols, and specific policy conditions. A doctor’s opinion is one input among several, not a controlling factor. The government further confirmed that the IRDAI collects data only on overall claim repudiation rates, not the reasons behind individual denials. Insurer-wise data on claims rejected specifically on grounds such as “non-medical necessity” or “exclusion” for the preceding three years is not available, Parliament was told. The IRDAI Annual Report 2024-25 shows that Indian insurers processed 3.26 crore health claims in the financial year ending March 2025, of which 87% were settled, 8% were repudiated, and approximately 5% remained pending at year end. That 8% repudiation rate means roughly one in every 12 claims does not result in payment – and the regulator cannot say, at an insurer-disaggregated level, why.
The data gap takes on greater significance against a surge in insurance disputes. In FY2024-25, the IRDAI’s Bima Bharosa grievance portal recorded 257,790 complaints, up about 20% from 215,569 the previous year. Complaints involving general and health insurers increased sharply, with claim-related issues accounting for approximately 69% of grievances in those segments. At the dispute resolution level, the picture sharpens further. According to the Council for Insurance Ombudsmen (CIO) Annual Report 2024-25, 17 Ombudsman offices across India received 53,184 complaints in FY2024-25, of which approximately 71% were resolved in favour of the policyholder. Health insurance disputes accounted for approximately 64% of all complaints, ahead of life insurance at 24% and motor at 9%. The combination of a high policyholder win rate at the Ombudsman stage and the regulator’s inability to disaggregate rejection reasons represents a structural blind spot: the oversight system can record that disputes exist, but cannot trace them to their source.
The parliamentary exchange was not the only occasion in 2025 on which the government signalled concerns about health insurance claims handling. In May 2025, Finance Minister Nirmala Sitharaman chaired a review of public sector general insurance companies and directed them to adopt AI-driven claim settlement systems for motor own damage and health insurance, with the stated aim of ensuring “faster and more accurate claim resolution,” according to a Ministry of Finance statement published by the Press Information Bureau. At that review, it was noted that total premiums collected by public sector general insurers had risen from approximately ₹80,000 crore in 2019 to nearly ₹1.06 lakh crore in 2025, while overall general insurance industry premium collections reached ₹3.07 lakh crore in FY2024-25. The two government interventions – one on claims accuracy, one on claims reasons – have not been formally linked, but both point to an executive branch that is actively monitoring the sector’s claims performance.
The IRDAI has introduced a series of policyholder protections in recent years, consolidating them in its Master Circular on Protection of Policyholders’ Interests, 2024. The reforms include mandatory Customer Information Sheets, a 30-day free-look period for eligible life and health insurance policies, one-hour decision timelines for cashless pre-authorisation requests, and three-hour discharge authorisation timelines. The framework also reinforced insurers’ obligations to implement Insurance Ombudsman awards within prescribed timelines. Those reforms focus on improving transparency, policyholder protections, and claims handling processes. They do not require insurers to disclose, or the IRDAI to collect, insurer-wise data on the specific grounds for individual claim denials. The parliamentary reply confirms that such data is not collected, indicating that this gap reflects the current regulatory reporting framework rather than a temporary absence of information.
Overall insurance penetration in India declined for the second consecutive year in FY2024, falling to 3.7% of GDP from 4% in FY2022-23 and 4.2% during the pandemic years, against a global average of approximately double that, according to IRDAI’s own reporting cited by The Business Standard. As the market works toward the IRDAI’s “Insurance for All by 2047” objective, the absence of structured rejection data limits the ability of policymakers, regulators, and the industry to assess whether claim denial practices are proportionate or consistent across insurers.
The accountability question is not confined to India. According to WTW’s 2026 Global Medical Trends Survey, medical cost increases in Asia-Pacific are projected to reach 14% in 2026, the highest of any region globally, up from 13.2% in 2025, with more than half of global insurers anticipating that elevated medical cost levels will persist for more than three years. As healthcare costs rise across markets, the criteria and transparency standards by which health claims are approved or denied are attracting increasing scrutiny from regulators and legislators across the region.
