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Incorporated in August 14, 2013 for handling claims of health insurance of the state-owned insurers, the common in-house Third Party Administrator (TPA) of the public sector general insurers-Health Insurance TPA of India will be operationalized completely by November only. It will lead to the continuation of loss ratios in the health portfolio. However, IRDA (Insurance Regulatory and Development Authority) has not yet given the license to it. Now, external TPAs will handle these claims. National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India- these are the stakeholders that the common TPA has to process health claims. General Insurance Company has five percent stake whereas the first four have 23.75 % each.
Headquartered in New Delhi, the key objective of Health insurance TPA is the enhancement of customer experience and to make health insurance claims management more efficient. It shall develop its branches in various cities in due course.
Health Insurance TPA has applied for a TPA license to IRDA and is expecting to get the approval in the next few weeks.
A senior official from Health Insurance TPA of India said that putting all the software and IT systems in place is in the process. In the next six to nine months, the TPA would begin doing business with public insurers.
Providing end-to-end 'Health Services' by Health Insurance subject to regulatory approvals would include call centre, member enrolment, grievance management and customer service, pre-authorisation and claims processing. Further, it's involvement in provider network empanelment, investigation & verification, pre-policy health check-up, customer awareness and wellness programmes can also be seen. Health insurance loss ratios which refer to the ratio between premiums collected and claims paid, range from 95 to 100 per cent, depending on the company's size. The losses however have been on the rise with stiff competition in group portfolio with aggressive discounts given to retain customers.
Till the common TPA is operationalised, losses are expected to continue. The reason for introducing a common TPA is that external TPA handing claims will add to the costs.
All types of Health Insurance policies should be supported by the company by providing services. It covers family floater, individual, mass schemes, group covers, indemnity and fixed benefit among others.
The common TPA will lead to the prohibition of large scale leakages while setting claims of insurance in the health segment. To speed up the claim-settlement process and to reduce the claim ratio of insurance companies, this common TPA was expected according the sector. Insurance companies pay a commission of approximately 6% of premiums to TPAs to settle claims. To reduce the costs also for these companies, this move is expected.
For a period of two years or till the time of superannuation, P K Bhagat has been appointed the first Managing Director and Chief Executive Officer of Health Insurance TPA of India.
The claims handling and processing from external sources will gradually be transferred to the new TPA after it comes into operation. This new TPA of India has been formed with Rs 300 crore authorised capital and Rs 10 crore paid-up capital.