 "LIC 's entry into common TPA still undecided")
The common Third Party Administrators (TPA) that would be operational from January 1, 2014 will see the four public general insurers, New India Assurance, Oriental Insurance, National Insurance and United India Insurance and reinsurer General Insurance Corporation of India (GIC) as stakeholders.
While Life Insurance Corporation of India (LIC) had also been invited to be a part of this venture, the life insurer has not yet given its consent to it.
This common TPA concept was mooted last September, and would have each of the four public general insurers holding 23.75%t stake each. GIC will hold 5%t in the venture. If LIC becomes a stakeholder, the PSU general insurers will reduce their stake. "As and when LIC becomes a part of this arrangement, we will off-load our stake," said a senior official from a public general insurer.
The stakeholders are in the process of finalising a name for the TPA. This TPA will intended to process claims of public general insurers in-house, rather than being handled by an external agency. The common TPA has been proposed to prohibit large-scale leakages while settling insurance claims in the health segment.
According to industry players. it is expected to speed up the claim-settlement process as well as reduce the claims ratio of insurance companies. This move is also expected to reduce costs for these insurance players, who pay a commission of approximately 6%t of premiums to TPAs to settle claims. Once the TPA comes into operation, the claims handling and processing from external agencies will gradually be transferred to the new entity.
While Life Insurance Corporation of India (LIC) had also been invited to be a part of this venture, the life insurer has not yet given its consent to it.
This common TPA concept was mooted last September, and would have each of the four public general insurers holding 23.75%t stake each. GIC will hold 5%t in the venture. If LIC becomes a stakeholder, the PSU general insurers will reduce their stake. "As and when LIC becomes a part of this arrangement, we will off-load our stake," said a senior official from a public general insurer.
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Meanwhile, LIC is still examining the proposal to become a member of the new venture. A senior official from LIC said, "We are examining it and haven't taken a decision on the same."
The stakeholders are in the process of finalising a name for the TPA. This TPA will intended to process claims of public general insurers in-house, rather than being handled by an external agency. The common TPA has been proposed to prohibit large-scale leakages while settling insurance claims in the health segment.
According to industry players. it is expected to speed up the claim-settlement process as well as reduce the claims ratio of insurance companies. This move is also expected to reduce costs for these insurance players, who pay a commission of approximately 6%t of premiums to TPAs to settle claims. Once the TPA comes into operation, the claims handling and processing from external agencies will gradually be transferred to the new entity.