The Hindu Business Line : IRDA permits third party administrators to offer other services

THE Insurance Regulatory and Development Authority has decided to permit third-party administrators (TPAs) in health insurance to undertake servicing of non-insurance healthcare schemes of Central and State Governments.

The TPAs have been asking the regulator for long whether they can enter into agreements with entities other than insurance companies for servicing their healthcare schemes.

In a notification here, the IRDA Chairman, Mr C.S. Rao, said, "It is hereby clarified that if the task undertaken by the TPA company is to undertake servicing of non-insurance healthcare schemes promoted, sponsored or approved by Central or State Governments, the IRDA has no objection to the TPAs undertaking that function."

However, he said since TPAs also undertake claims processing on behalf of insurers, it should be ensured that there is no conflict of interest between the work undertaken on behalf of the Central and State Governments and the work taken up on behalf of the insurance companies.

Further, the IRDA Chairman said the working capital requirements for attending to the work relating to the Central and State Governments should be worked out separately and brought in additionally so as to ensure that the processing of claims on behalf of the insurance companies is in no way impaired.

Making it clear that the IRDA would not be responsible for administrative or financial transactions between the TPAs and the Central or State Governments, Mr Rao said the IRDA, however, reserves its right to take appropriate action against the TPAs for serious acts of omission and commission brought to its notice by the Central or State Governments.