Irda against TPAs servicing state-sponsored health schemes.

Wednesday 13, July, 2011 Insurance regulator Irda does not want third party administrators to service health schemes floated by either states or the central government since these do not fall within its regulatory regime and the government is not subject to regulatory oversight of the regulator. The third party administrator (TPA) processes insurance claims and handles payment for health cover policies on behalf of insurers. It is basically outsourcing of the administration of the claims processing because the TPA is performing a task traditionally handled by an insurer. The Insurance Regulatory & Development Authority (Irda), in a draft circular said: "Lately, some governments have issued tenders calling for the direct servicing of health schemes by TPAs. Given the growth and likely future growth of the health insurance industry, there would be a regulatory burden with considerable reputation risk to the institutions and the industry, in the event of any act of omission and commission by any intermediary if acting directly as an agent of the government."

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