Health Insurance TPA of India to begin business in April 2015

The Health Insurance Third Party Administrator (TPA) of India which has been set up to manage health claims of public general insurers is all set to begin operations in April 2015.

Though the company had secured a license from Insurance Regulatory and Development Authority of India  (Irdai) for functioning as TPA, it was getting its IT processes in place.

TPA licenses are valid for a period of three years from the date of issue/ renewal, unless renewed further.

This TPA had earlier run into trouble after the Competition Commission of India (CCI) had ordered an investigation by the Director General, CCI against General Insurers' (Public Sector) Association of India (GIPSA) and other public sector general insurers for alleged anti- competitive practices.

But, insurance officials said that the claim management process would be equally spread.

CCI had observed that the Opposite Parties have floated in house TPAs to reduce their claim ratio which may potentially result into rejection of claims on ad-hoc basis.

The said practice was found by the Commission to not be in alignment with prevailing global practices where the TPAs and insurers are operating independently.

Officials involved in setting up the Health Insurance TPA of India explained that they too want the company to compete with other TPAs in the market.

"At no point will the business for them be 100%. We will continue to keep a healthy mix between the external TPAs and in-house TPA," a senior official said.

This common TPA to process health claims has National Insurance Company, New IndiaAssurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India as stakeholders.

The first four have 23.75 per cent stake each and GIC has five per cent.

This TPA will look into health claims and handle claims received by these public general insurers. The common TPA has been proposed to prohibit large-scale leakages, while settling insurance claims in the health segment. Further, it is intended to process claims of public general insurers in-house, rather than handling by an external agency.

This TPA has been formed with an authorised capital of Rs 300 crore and paid-up capital of Rs10 crore.