Private TPAs have nothing to worry, say state-run non-life players

MUMBAI: Following the fair trade watchdog Competition Commission ordering a probe into the state-owned general insurers' health cover policies, the companies have allayed fears that the common third-party administrators ( TPA) being formed by them will create any problem to the existing 70-odd TPAs.

On Friday, the Competition Commission had ordered a probe against all the public sector general insurers, including the largest player New India Assurance, for alleged unfair business practices with regard to their third-party administrators after the TPA industry body made a complaint to them.

All the four state-owned general insurers--New India Assurance, Oriental Insurance, National Insurance and United India Insurance--are currently busy forming a common TPA among them. These four state-run general insurers control nearly 70 per cent health insurance market which was worth Rs 15,000 crore as of March 2014. The mediclaim sector is annually growing at 15 per cent.

"Yes, we have formed a common TPA of our own and we have already registered a company as Health Insurance TPA of India. It is likely to become fully operational by June 15, 2015 as we are currently under the process of creating an IT infrastructure for the same," an official of New India Assurance told PTI.

The proposed company has already floated request for quotes for creation of its IT platform and the bids for the same are likely to open next week. Also, the company has appointed a general manager rank official from GIC Re, P K Bhagat as the managing director.

"We have received some communication from the Competition Commission at the General Insurers (public sector) Association of India level, for which we have already sent our reply too," the official added.

The private sector TPA have complained that in case the common TPA comprising all the four general insurers comes into being, this might create a monopolistic situation in the market.

"Let me tell you that we will continue to take services of the already existing TPAs, even though our own common TPA comes into being as we will ensure that entire business of ours on the health insurance space was not given to the proposed common TPA," he said.

Each of the four state-owned general insurers have contributed 95 per cent of the total seed capital of Rs 200 crore as required by the proposed company and the balance share of 5 per cent has been contributed by the sole reinsurer of the country, GIC Re.

The official added that for risk management point of view too, the entire business cannot be handed over to a single entity. "Secondly, 45 per cent of the whole health insurance market is captured by the corporate houses and it's they who decide which TPA to serve them," he said.