As per a circular issued by IRDA, The Third Party Administrators (TPAs) in health insurance will now have to are strict their services only to an insurance company.
The Insurance Regulatory and Development Authority (IRDA) has withdrawn permission given to TPAs in 2005 to offer their services to bodies other than insurance companies, such as Central and State governments.
The circular states licensed TPAs cannot enter into arrangements for servicing health schemes promoted, sponsored or approved by any non-insurance body, including Central, State, local governments, corporates, and so on.
If any TPA is desirous of offering services to anybody (any schemes) other than an insurance company, it should first surrender its licence to the IRDA. Since 2005, the gross written premium of health insurance in India has increased from Rs 1,535 crore to Rs 11,145 crore as on March 2011.
“Given the growth of the health insurance sector, it is important that the systems in place for servicing health insurance should be dynamic and effective in order to ensure the orderly growth of the health insurance business in India,†the IRDA Chairman said. With respect to existing contracts, TPAs can continue to service them till the expiry of the contract period without any further renewal.
