Room-rent cuts and proportionate deductions.

Where the rules stand

IRDAI’s 2020 norms on proportionate deduction, which protected items like medicines, implants and consumables from room-rent-linked cuts, were repealed by the 2024 master circulars. No IRDAI instrument now regulates proportionate deduction in detail, so your policy wording decides.

What still binds the insurer

• The policy must list all exclusions and sub-limits.
• Where the policy document and the customer information sheet conflict, the policy document prevails.
• A partial disallowance must cite the specific policy clause it relies on.

How to argue a deduction

• Many policies sold or renewed between 2020 and 2024 carried the 2020 carve-outs (pharmacy, consumables and implants protected from proportionate cuts) in their wording. Wording and renewal history vary, so check the exact wording of your policy year.
• If the wording doesn’t define the proportionate deduction clearly, ambiguous terms are read against the insurer.
• If your schedule has no room-rent sub-limit, there is no basis for a room-rent deduction.
• Ask for the itemised settlement sheet showing how every deduction was worked out.

What to do

1. Get the full policy wording and the itemised settlement sheet.
2. Mark each deduction that the wording doesn’t support.
3. Write to the Grievance Redressal Officer with the list, then go to the Ombudsman if needed.