Following the hassle caused after four public sector non-life insurance companies withdrew cashless facility from certain hospitals, the Insurance Regulatory & Development Authority (Irda) has asked all life and non-life insurance companies to inform policyholders about the nearest alternative hospitals where the cashless facility is available, in case of change in the preferred provider network (PPN) of hospitals.

"In order to ensure that the interest of policyholders is not adversely affected when a change in PPN is effected, insurers are directed to inform policyholders, at all times, the nearest possible alternative hospitals where the cashless facility is available and the conditions thereof," said Irda.

In case of an insurer withdrawing cashless facility from any hospital while the policyholder was undergoing a treatment, the insurance companies should continue to provide the benefits of the cashless facility in that hospital, the regulator said.

"If a policyholder has been issued a pre-authorisation for a given procedure in a given hospital, or if the policyholder is already undergoing such treatment, and such hospital is proposed to be removed from the list of PPN, then insurers are directed to continue to provide the benefits of cashless facility for such policyholder, as if the hospital continues to be in the PPN list," said Irda.