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C.R. Sukumar

HYDERABAD, March 10

THE Insurance Regulatory and Development Authority (IRDA) has detected that some of the institutions acting as third party administrators (TPAs) in the health insurance arena had not registered themselves as TPAs under the IRDA (TPAs-Health Services) Regulations.

The regulator also found that some of these organisations had the support of the insurance companies. Disturbed by these `unhealthy' practices, IRDA has warned the insurance providers to face the penalty for encouraging such unregistered institutions.

The egulator had earlier licensed some organisations under the IRDA (Third Party Administrators-Health Services) Regulations. The system of TPAs has been in vogue for sometime now.

As part of the regulations, the insurers and the TPAs were required to file with IRDA the copies of agreement that had been concluded between them. The purpose of this requirement was for the regulator to know the exact scope of work which an insurer had entrusted with the TPA or the jurisdiction in which the TPAs acted on behalf of the insurers.

In a letter addressed to the chiefs of insurance companies on Monday, the IRDA Chairman, Mr N. Rangachary, said, on going through some of those agreements which had been received by the regulator, in some cases IRDA found that copies of the agreements had still not been filed with it.

The regulator also felt that the agreements lacked clarity in many cases and the coverage in the agreements was not to the extent required. IRDA also enclosed a list of items to the insurers, which it would like the agreements between the insurers and the TPAs to cover.

According to Mr Rangachary, the parties were now required to ensure that the agreements entered into brought out clearly the scope of the work the TPA was to carry out in various areas. The IRDA Chairman advised both the insurers and the TPAs to be aware of their obligations under the regulations.

Mr Rangachary said, "A worrisome development has been for some institutions which have not been registered themselves as TPAs under the regulations offering assistance in the development of medical insurance schemes in the country."

Further, according to the regulator, "What is more apprehensible is that the fact that some of these organisations seem to have the support of insurance companies. The insurers, by aligning themselves with these unlicensed organisations, would be compromising their interests."

Following this, IRDA warned the insurance companies that "any agreement with an unlicensed organisation to act as a TPA in those areas of work which have been allotted to be done by the TPA would be outside the scope of the provisions of the Act and the Regulations and the insurers as well as the organisations who style themselves as service providers would attract penalty."

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