NEW DELHI, DEC 25: Overruling objections from general insurers, the Insurance Regulatory and Development Authority (IRDA) has decided to permit yet another set of intermediaries to distribute insurance. Third party administrators (TPAs) will be allowed to distribute health insurance along with other services they offer at present.The first three-year licences are expected to be issued by March and regulated TPA services to begin the following month.Industry estimates put the health insurance market at Rs 500 crore.At a meeting convened here last week, the regulator circulated draft regulations on TPAs for the health insurance segment. Industry sources said the proposal for TPAs doubling as corporate agents met with stiff resistance from the public sector insurers - New India Assurance, United Insurance, Oriental Insurance and National Insurance - while newly licensed Reliance General Insurance and Royal Sundaram Alliance could contribute little by way of opinion, being still at sea on this aspect.Cigna, global leader in health insurance, was also present in the deliberations, but did not air its views as it has not yet finalised its India plans.The PSUs contend that selling of insurance should be left to them, and TPAs should confine themselves to servicing the insured and co-ordinate with the health service providers.However, the regulator agreed with the TPAs that they be allowed to market health covers too, and not limit their scope to simply back-office operations. It was of the view that there was ample room for more players selling the concept of health insurance, that still has a long way to go in India.TPAs form the middle link in the chain of integrated delivery systems that "bring all the components of health care delivery - such as physicians, hospitals, clinics, home health, long-term care facilities and pharmacies - into a single entity", a note prepared by the IRDA said.TPAs will be expected to deliver high quality health care and services at less cost, and balance the cost of treatment with the need to provide more comprehensive health promotion and disease prevention. "The utilisation of such a system encourages appropriate treatment, discourages over-treatment, encourages preventive care, and attempts to promote cost containment and quality health care delivery," according to IRDA. Their entry would also mean cashless health care delivery to policy-holders, along with trauma support and other advisory services.At the meeting, the regulator made it clear that TPAs would charge a clubbed fee only from the insurer, who will also be the sole bearer of the financial risk. Each TPA would need to have and maintain assets worth at least Rs 25 lakh that are easily reaIisable. This floor may be doubled later to avoid frivolous players entering the market. TPAs will also need to take insurance policies for at least Rs 1 crore to cover their own business risks. Solvency norms are being worked out.There are a number of TPAs functioning in different parts of the country, but these at present cater solely to corporate clients. About 25-30 new players are likely to enter this segment within a year. Those operating at present include Paramount Medical, Sedgwick Parikh, Ican Medicare, Apollo Family Health and DMS Lifeline.
