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The Health Insurance TPA of India Ltd, set up to manage the health claims of public-sector general insurers, would begin operations by April 2015, an official said. The company had secured the Insurance Regulatory and Development Authority (Irda) licence two months ago, he added.
TPA licences are valid for three years and can be renewed upon expiry.
However, this does not mean that the entire TPA business of public general insurers will be transferred to the Health Insurance TPA of India, said the general manager with a state-owned general insurer. This is because external TPAs will continue to serve state-owned general insurers and 50-55 per cent business would remain with them.
The Health Insurance TPA of India Ltd is a joint venture of the National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India. The first four have 23.75 per cent stake each and GIC has five per cent.
The Health Insurance TPA will look into the health claims and handle a majority of the claims received by these general insurers. Its mandate is to prevent large-scale leakages, while settling insurance claims in the health segment. It is also supposed to process the claims of public general insurers in-house.
While the Competition Commission of India (CCI) has ordered an investigation against General Insurers’ (Public Sector) Association of India and public-sector general insurers for alleged anti-competitive practices, insurance officials said the claim management process would be equally spread.
CCI has observed Opposite Parties have floated in-house TPAs to reduce their claim ratio, which could potentially result into rejection of claims on an ad-hoc basis. The Commission found the said practice not to be in alignment with the prevailing global practices, where the TPAs and insurers operate independently.
The Health Insurance TPA is expected to reduce costs for these companies, which pay a commission of six per cent of premiums to TPAs for settling claims. Currently, most claims in the health segment are handled by external players, which has increased the time taken to settle claims.
Although there are fears that claims could be rejected, officials say the new company will operate independently. “Health Insurance TPA of India would take an independent decision. The public general insurers just own shares in the company,” said an official.
The entity has been formed with an authorised capital of Rs 300 crore and a paid-up capital of Rs 10 crore.
