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TPA Company to be launched soon

Source : SIFY
Last Updated: Fri, Nov 16, 2012 12:39 hrs
​life insurance

State-owned non-life insurance companies that have once again started work on launching their own third-party administrator (TPA) company, would be initially investing Rs 100 crore in it. The insurers plan to launch the TPA company in the next six months.

RK Kaul, director, project TPA, said, "There will be no foreign partner. Each of the four state-owned insurance company will hold stake in the TPA company. Besides Life Insurance Corporation of India (LIC) and General Insurance Corporation can also hold a stake in the TPA company if they want. The joint venture agreement will be signed in a month. "

The four government-owned non-life insurance companies - New India Assurance, Oriental Insurance, United India Insurance and National Insurance - have been trying to launch their own TPA company since 2010. They had appointed KPMG as a consultant for setting up a common TPA company to settle health insurance claims. The purpose was to cut costs and minimize the spiraling claims ratio touching 130 per cent, besides protecting their customers data from TPAs that were owned by private insurers and large corporate hospitals.

However, last year, talks between the four state-owned insurers and the short listed foreign players did not materialize because the latter did not agree to the terms and conditions proposed by the state-owned insurance companies.

The TPA model was introduced by the Insurance Regulatory and Development Authority (Irda) in 2000 to facilitate the hospitalization process for policyholders and keep a tab on claims cost for insurers. A TPA acts as an intermediary between the insurance company, hospital and the policyholder. It arranges for the hospitalization of the policyholder and settles the bills with the hospitals from a float fund provided by the insurance company.

ApnaPaisa is India's leading Online market place for financial products such as loans, credit cards and insurance plans. Author can be reached at www.facebook.com/apnapaisa.

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