PSU general insurers form TPA JV to manage health insurance claims

With a view to curb large-scale leakages in claims settlement of health insurance policies and to quicken their processing, country's four state-owned general insurers have incorporated their common in-house Third Party Administrator (TPA), named Health Insurance TPA of India. The company will start its operation in April 2014.

According to an official close to the development, the four state-run general insurance companies - National Insurance, Oriental Insurance, United India Insurance and New India Assurance have 23.75 % stake each in the joint venture; while the state-owned reinsurer General Insurance Corporation (GIC) of India holds the rest 5%.

Once the TPA starts its operation, the claim settlement from external agencies will gradually be transferred to the Health Insurance TPA of India. It has been formed with an authorised capital of Rs 300cr and paid-up capital of Rs 10cr. It will process health insurance claims received by the member insurers.

As per the industry experts, the common in-house TPA will reduce the claims ratio of insurance companies. Also, it will reduce expenditure for the member insurance companies; as they pay about 6% of premiums to TPA for settling claims. Currently, most companies in the health insurance space dependent on TPA for claim processing, which leads to delay in claims settlement.

Chairman and Managing Director of New India Assurance, Sri G Srinivasan has been appointed as the chairman of the board of the TPA company.

Source: http://www.insuringindia.com/