New Delhi, Aug. 6 -- Nothing stings quite like having a health insurance claim rejected for no apparent fault of yours. Yet, this is a risk policyholders may unknowingly face when they port their health insurance policies.

Portability was introduced by the insurance regulator to ensure that customers were not trapped in policies that did not serve them well. The idea was simple: give policyholders the freedom to walk away from a bad insurer and, in the process, encourage better service, better products, competitive pricing and greater choice.

The system works beautifully on paper. On the ground, however, it does not seem to be working as intended.

Switching health insurance is not as simple as moving from one financial product to anoth...