Tuesday, April 15, 2014

Health Insurance TPA For PSU Insurers Likely To Become Operational By The Year End

The much awaited Health Insurance Third Party Administrator (TPA) for state-run general insurance companies will start operations only by the end of the year, as against the scheduled April 2014. The TPA is waiting for the necessary regulatory license from the Insurance Regulatory and Development Authority (IRDA).

The Health Insurance TPA of India is the in-house third party administrator to handle health insurance claims of the state-run insurers, and was incorporated in August 2013. Currently, these claims are handled by external TPAs.

The Health Insurance TPA of India Ltd is a joint venture of four state-owned insurers- National Insurance, Oriental Insurance, United India Insurance and New India Assurance. Each holds 23.75 % stake 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.

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.

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