Page 263 - IC38 GENERAL INSURANCE
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E. Role of third party administrators (TPA)
1. Introduction of TPAs in India
The insurance sector was opened to private players in the year 2000.
Meanwhile, the demand for healthcare products was also growing with new
products being launched. A need was therefore felt for the introduction of a
channel for post-sale services in health insurance. This offered the opportunity
for professional Third Party Administrators to be introduced.
Seeing this, the Insurance Regulatory and Development Authority allowed TPAs
to be introduced into the market under license from IRDAI, provided they
complied with The IRDAI (Third Party Administrators – Health Insurance)
Regulations, 2001 notified on 17th Sept 2001.
Definition
As per Regulations,
"Third Party Administrators or TPA means any person who is licensed under the
IRDAI (Third Party Administrators - Health Services) Regulations, 2001 by the
Authority, and is engaged, for a fee or remuneration by an insurance company,
for the purposes of providing health services.
"Health Services by TPA" means the services rendered by a TPA to an insurer
under an agreement in connection with health insurance business but does not
include the business of an insurance company or the soliciting either directly or
indirectly, of health insurance business or deciding on the admissibility of a
claim or its rejection.
Thus the scope of TPA services starts after the sale and issue of the insurance
policy. In case of insurers not using TPAs, the services are performed by in-
house team.
2. Post sale service of health insurance
a) Once the proposal (and the premium) is accepted, the coverage
commences.
b) If a TPA is to be used for servicing the policy, the insurer passes on the
information about the customer and the policy to the TPA.
c) The TPA enrolls the members (while the proposer is the person taking
the policy, members are those covered under the policy) and may issue a
membership identification in the form of a card, either physical or
electronic.
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