Financial Daily from THE HINDU group of publications
Saturday, Aug 03, 2002

Port Info

Group Sites

Money & Banking - General Insurance

Insurers told to stick to TPA fee ceiling

Sarbajeet K. Sen


WHILE the process for hiring third-party administrators (TPAs) has been decentralised, the General Insurance Public Sector Association (GIPSA) has directed the four non-life general insurance companies to adhere to the cap on fees that the association had earlier negotiated in the now-aborted selection process.

In the selection exercise which begins on Saturday, the four nationalised companies would also be required to stick to the other general criteria set by GIPSA during the exercise it had conducted in June for short-listing the TPAs for the PSUs.

Thus, the insurers would be allowed to offer a maximum of 5.5 per cent fees for TPAs hired in the northern and southern regions, while for east and west the fees would be capped at 5.4 per cent. `The ceiling on the commission rate had emerged through a process of negotiation with the TPAs. That cap would remain even in the new selection process," a top GIPSA official said.

The officials said that the companies would also be required to keep in mind the other norms specified by GIPSA, which include the infrastructure available with the health insurance intermediaries.

Besides the requirement of possession of an IRDA licence, some of norms outlined are that the TPAs would have at least two offices in a zone, with one in a State capital having five hospitals and the other in another city with at least two hospitals.

The TPAs would also be required to have a 24-hour toll free number available for their customers while at the same time maintaining a certain level of computerisation, including Pentium-4 computers.

GIPSA has adopted these criteria to prepare its panel of TPAs from which the four companies were supposed to hire the intermediaries. However, under protest from a section of those left out, the entire panel had to be scrapped and fresh interviews called for.

The interviews of the TPAs begin on Saturday with all of them being required to appear before Oriental Insurance Co Ltd, followed by National Insurance Co Ltd, New India Assurance Co Ltd and United India Insurance Co Ltd on four consecutive days. The interview panel would comprise of the chairman of the company, a Government director and another director on the board.

Send this article to Friends by E-Mail

Stories in this Section
Rupee stable; gilts rally

HDFC to raise $100 m more
General insurance cos sore over directives on TPAs
Insurers told to stick to TPA fee ceiling
PSU insurers dump compassion
Primary dealers told to publish accounts
RBI for ceiling on States' loan guarantees
Catholic Syrian to offer VRS
Low-cost bank loan scheme for engg students on cards
Of political funding & safe accounts
IOB keeping options open on second VRS
Union Bank returns Rs 58 cr to Government
Associate unattractive — `IDBI wants to merge with another bank'
Exim Bank to extend $10-m credit to PTA Bank
IndusInd bid to auction hotel property stalled

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line