Third Party Administrator (TPA) Committee submits report to IRDA

The committee headed by S. B. Mathur, Secretary-General of the Life Insurance Council, has recommended the formation of a common body comprising members from the TPA’s, life and non-life insurance companies and hospitals and representatives from consumer groups.

This is a good suggestion as consumer representatives may get a say in claims settlement for Mediclaim policies .We are hopeful that IRDA will accept this recommendation made by the Third Party Administrator Committee.

The proposed body is expected to simplify and speed up cashless claims settlement of insurance policies. The body, it is proposed, would address claims-related complaints by hospitals and take the views of the nominated consumer representatives and other stakeholders in settling disputes. Its operation is expected to be independent of the insurance ombudsmen services. The Ministry of Health, through its Directorate-General, might also facilitate in the functioning of the new body, Mathur said. “We have suggested to the Insurance Regulatory and Development Authority to nominate one or two representatives to look after customer interest,” he said. The nominees, he pointed out, would not necessarily have to be members of consumer associations.

Currently, the policyholders have to rely solely on the TPA’s, which are intermediaries between insurance companies and hospitals for settlements of claims. There are 27 IRDA-approved TPA’s across the country. “The lack of coordination and the consequent blame game among the different stakeholders had thrown up a lot of problems,” Mathur said, adding that the objective of the proposed body would be to help standardize the settlement procedures and bring transparency to the system. Hospitals now are not under the IRDA and their representation in the proposed body therefore could at least make them more accountable, he added.

The panel has also recommended doubling the minimum capital requirement for TPA’s to Rs 2 crore. It has proposed extending licence to a TPA only if it is present in at least six locations. These regulations, however, are not particularly aimed at ranking of TPA’s, he added.

With 4 PSU’s having appointed KPMG to suggest format for their own TPA and ICICI/Star/Bajaj Allianz handling their own claims-we feel increase of equity requirement is unjustified. We foresee some TPA’s are going to return the licence to IRDA in future as the business prospects will be reduced with 4 PSU’s withdrawing the business from existing TPA’s.

With growth of Telecom sector through out the country and availablity of 1 800 free calling service is there a need to have 6 branches. We feel ther is no need provided 24x7 call centre is working efficiently .