This year in August, the general insurers in the public sector formed a common in-house health insurance Third Party Administrator (TPA). It is expected to come in full fledged action by April, 2014. The five general insurance companies owning stakes in health insurance TPA are National Insurance, New India Assurance, Oriental Insurance, United India Insurance and General Insurance. Of the above, the first four insurers capture almost 70% market share in the health insurance sector. Initially, these health insurers used to take the services of external TPAs.

The formation of a common TPA will help them gain more transparency and control over the claim processing. It will also make it easier for the insurers to catch fraudulent claims. For the policyholders too, this initiative is beneficial as it will make the claim settlement process faster and easier.

In the beginning, formation of TPA is going to be a financial load for these insurers, but over a long term, the administrative cost will come down leading to big savings. At present, these insurers pay a substantial fraction of the premiums collected to external TPAs for their services.

The common health insurance TPA is intended to handle the claims filed with any of these five insurers.  For its initial set up, TPA is funded with paid up capital of Rs 10 crore and authorized capital of Rs 300 crore from government owned general insurers.

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