State-owned insurers favour in-house TPA even as private players cry foul

State-owned insurers favour in-house TPA even as private players cry foul

New Delhi, May 14: Even as private players call for a level-playing field, state-owned general insurance companies are looking to hike their exposure in their in-house third party administrator (TPA) in this financial year.
The insurers, including New India Assurance, National Insurance, Oriental Insurance and United India Insurance, are promoters of the company Health Insurance TPA of India.
Sources told Moneycontrol that the insurers would want to have an equal share (50-50) of business between their co-promoted TPA and the external ones. Currently, less than 30 percent of the business comes from the Health Insurance TPA.
“We want to substantially increase the business from the in-house TPA. This will not only help manage health claims better but also reduce losses,” said G Srinivasan, chairman and managing director, New India Assurance.
Competition watchdog case
A few years ago, TPA had earlier run into trouble after the Competition Commission of India (CCI) ordered an investigation against General Insurers’ (Public Sector) Association of India and other public sector general insurers for alleged anti- competitive practices.
A senior general insurance executive said that having their own TPA will be beneficial for the consumers.
The public sector insurers, on the other hand, have said that having their own TPA will help improve claims experience for the customers.
In 2014, the CCI noted that these insurers had floated in-house TPAs to reduce their claim ratio, which could potentially result into rejection of claims on ad-hoc basis, based on a complaint filed. However, a detailed investigation by CCI had, in 2016, said that closed the case since they did not find any evidence against the public sector insurers.
Private TPAs want level-playing field
Privately-owned third party administrators have, on the other hand, called for a level-playing field between all TPAs so that everybody gets a chance to bid for a business.
“We are competing aggressively with the in-house TPA to get public sector business. If that TPA opens up to private companies as well, we will be on a level-playing field,” said the chief of a large Mumbai-based TPA service provider.
To ensure no undue interference happens by TPAs, the insurance regulator has also amended health regulations to say that the insurance company and not the TPA would take the final call for admission or rejection of health claims. The TPA could only act as an intermediary.
What do TPAs do?
A TPA comes in when a health insurance policy is taken. They are the first point of contact during any medical emergency. Once a claim is filed, their responsibility is to act as a mediator between the insurer and the policyholder and help insurers settle the claim quickly.
In the general insurance sector, health and motor insurance account for almost 70 percent of the total claims filed. Unlike motor, where claims settlement could be quicker for basic claims, health insurance requires timely filing of claims as well as adherence to the specific caps under a policy. This requires intervention of a TPA since an ordinary person may not be able to understand the specifics of the product.
The Health Insurance TPA of India aims to provide the services of call centres, customer service and grievance management, pre-authorisation, and claim processing. The firm also provides services to support all types of health insurance policies – individual, family floater, group covers, mass schemes, indemnity, fixed benefit, among others.