The Association of British Insurers (ABI) has confirmed that Bupa will reinstate its membership in January 2019.
This comes after Bupa, which is the largest health insurance provider in the UK, left the trade body in 2013.
In the last two years a number of firms have joined or rejoined the ABI.
These include Old Mutual Wealth, Hargreaves Lansdown and Vanguard.
Andy Briggs, chairman of the ABI, said: "I am delighted to welcome Bupa back into membership of the ABI.
"The ABI has changed a great deal since they left in 2013, and their decision to return reflects the modernisation and the quality of service now being delivered by the association to its members.
"Bupa's decision to rejoin ensures the ABI now represents the vast majority of the health insurance market, strengthening our collective voice in this crucial area."
David Hynam, chief executive of Bupa UK, said: "As the UK's leading health insurer we want to actively engage in the key debates that impact our customers.
"We are pleased to be rejoining the ABI to work with them to continue to champion the positive contribution that health insurance makes to the UK health system, offering millions of people access to fast, high quality healthcare."
The news was also welcomed by the director general of the ABI, Huw Evans, who said Bupa rejoining will boost its efforts to make the case for the important role insurance plays in complementing the NHS.
He added: "I am very pleased to see Bupa rejoin the ABI. Health insurance helps millions of people in the UK pay for the treatments they need."
The ABI also launched an associate member programme in 2016 which now has 26 members.