IRDAI Gives Policyholders Freedom to Choose Their Own TPA

The insurance policyholders now need not completely rely on the insurer as IRDAI has allowed them to choose the Third Party Administrator of their own choice when buying health insurance or at the time of policy renewal.

The insurance regulator IRDAI (Insurance Regulatory and Development Authority of India) issued a circular that said, "For the purposes of this sub-regulation, the choice of the policyholder to choose a TPA for rendering health services is limited to the TPAs with whom the insurer is having Service Level Agreements in place. Based on the health insurance product and geographical location of the policyholders, the insurer may also limit the number of TPAs amongst whom the policyholder may choose a TPA of their choice. The insurer explicitly shall provide the list of the TPAs engaged, from amongst whom the policyholder may choose a TPA of their choice, at the time of proposal or the renewal as the case may be."

These regulations can be known as the Insurance Regulatory and Development Authority of India (Third Party Administrators-Health Services) (Amendment) Regulations, 2019.

Analysts believe that this initiative will let the policyholders be more flexible and have hold on the whole health insurance sector.
Let us discuss how it is going to benefit the customers.

What is a TPA (Third-Party Administrator)?

A Third Party Administrator is a middleman who makes the claim settlement process easy. They help the policyholders facilitate their claim requests using hospital bills and other documents. But, accepting or rejecting a claim is not their responsibility.

The IRDAI circular says that a policyholder can choose the Third Party Administrator of their own choice from the enlisted TPAs by engaged by the insurer. As per the circular,

1. Every policyholder will be permitted by the insurer to choose another TPA if the services of existing TPA are terminated during the course of services rendered.

2. The insurer will clearly share the list of TPAs with the policyholders from which they can choose the one they want at the time of buying. The policyholders will be free to change their TPAs only when renewing their policies. The policyholder cannot dispense the services of TPA and ask the insurer to provide services directly.

Also, the insurer will have the right to decide whether or not to engage any TPA or to terminate a TPA’s services or not to engage a TPA’s services for some particular health insurance plan or stop taking services of TPA to take a particular health insurance policy.

3. The insurer may let the policy servicing to a TPA that it chooses if the policyholder does not choose any TPA.

4. The policyholder need not be provided with any option if the insurer engages the services of only one TPA.

There are a lot of private as well as public insurers in the market from which you can decide if planning to buy a health insurance product. These are-Bajaj Allianz, Religare, Tata AIG, HDFC Ergo, Star Health etc. Think and invest in the best.