Page 10 - The Insurance Times May 2025

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IRDAI Warns Heritage TPA Transformative Insurance Bill Likely in Monsoon
for Violating Claim Com- Session
munication Norms The government is expected to introduce a transformative insurance sec-

The Insurance Regulatory and Devel- tor bill during the monsoon session of Parliament, aiming to raise the for-
opment Authority of India (IRDAI) has eign direct investment (FDI) cap in insurance companies from 74% to 100%.
issued a warning to Heritage TPA for "The bill is getting ready. Post all the consultations and approval from the
unilaterally closing health claims and Cabinet, it may be introduced during the monsoon session," a senior gov-
directly communicating claim repudia- ernment official said.
tion to policyholders, actions deemed
The move aligns with the FY26 Budget announcement and seeks to stream-
a violation of regulatory norms.
line the conditionalities associated with foreign investment. Amendments
"The TPA is hereby warned for closing to the Insurance Act, 1928, the LIC Act, 1956, and the IRDAI Act, 1999 are
the health claims on its own and issu- proposed to simplify processes, enhance accessibility, and boost insurance
ing the communication regarding de- penetration under the "Insurance for All by 2047" vision.
nial/repudiation of the claim directly
to the policyholders in contravention of One significant reform under the proposal includes introducing composite
licences, allowing insurers to offer life, health, and general insurance under
regulations " IRDAI said in an official
a single licence, aimed at expanding the sector's reach and efficiency.
statement.
The regulator emphasised that only
insurers are authorised to make and IRDAI Approves Premium happens only when an insurance policy
is issued," IRDAI said.
communicate decisions regarding Payment via UPI-Blocked
claims. TPAs must ensure their role If the insurer accepts the proposal, the
remains limited to facilitating claims Amount Facility premium amount will be debited; oth-
and must not influence outcomes or The Insurance Regulatory and Devel- erwise, the blocked funds will be re-
send denial communications them- opment Authority of India (IRDAI) has leased back to the policyholder. The
selves. introduced Bima-ASBA, enabling poli- facility is mandatory for both life and
cyholders to block funds through Uni- health insurers.
The warning followed a remote inspec-
fied Payments Interface (UPI) for insur-
tion conducted by IRDAI between No- The regulatory body instructed the Life
ance premium payments.
vember 8 and 11, 2021. IRDAI reiter- and General Insurance Councils to is-
ated that TPAs must strictly adhere to "Under the facility called the Bima sue a standard declaration within a
regulatory guidelines to protect policy- Applications Supported by Blocked week, ensuring seamless adoption. In-
holder interests and ensure transpar- Amount (Bima-ASBA), the transfer of surers must now offer this option
ency in the claims process. money from the prospect to the insurer alongside conventional payment meth-

10 May 2025 The Insurance Times