State-owned risk companies - The New India Assurance Company and United Insurance Company - have moved the Insurance Regulatory and Development Authority (IRDA) protesting the sale of health products by third party administrators (TPAs). Private insurance players, in contrast, support the move, which they feel will create greater awareness in the health insurance sector.
The insurance regulator is not giving much weightage to arguments put forth by the public sector. According to industry sources, IRDA officials maintained that managed care companies do not come under its domain or purview. Managed care companies fall under the directorate of health services and is a state subject.
The insurance regulator cannot restrict sales since marketing of managed care products by any company is a fundamental right of the company.
The IRDA opened a pandora box when it announced in its draft regulations for third party administrators (TPA) that they would not be allowed to sell health products. The deadline for presenting views of the draft TPA regulations expired on Tuesday and there has been a mix response from the TPAs themselves.
Paramount Healthcare Management Company is of the view that should managed care companies wish to sell any health products, they should become corporate agents or brokers, and obtain the necessary licence. Dr Nayan Shah said: "Any assurance on health coverage is a part of the health insurance business, and as a TPA, it should not be permitted".
Ican Medicare maintained that managed care products do not cover risks at all, and are based on a fee structure for services offered.
TPAs have further asked for a change in the application form. As per the regulations, TPAs have to submit a copy of the agreement between the service provider and the insurance company. Shah questioned that should the licence not be granted by the regulator then the insurer would have to find another TPA.
Some TPAs, however, told Business Standard that the IRDA wants the insurance companies to verify the networking of TPAs prior to granting licence. "The IRDA is in need of a health cell where technically-qualified people can advise the regulator," he added.
