The insurance regulator IRDA has now allowed policyholders to choose the third-party administrator (TPA) from the list of those engaged by the insurance company. In case the service of the TPA is terminated by the insurer, then the policyholder can choose another TPA. The policyholder will be allowed to change the TPA at the time of renewal.
In case a policyholder does not choose a TPA of his choice, then the company will allot him a TPA of its choice. However, where the insurer engages the services of only one TPA, the policyholder will have no option but to stick to that TPA.
The regulator has underlined that based on health insurance product and geographical location of the policyholders, the insurer can limit the number of TPAs amongst whom the policyholder may choose.
During 2017-18, there were 27 TPAs registered with Insurance Regulatory and Development Authority of India (Irdai).
What is TPA ?
A TPA is an intermediary appointed by an insurance company to facilitate the settlement of claim. They will seek all the bills and documents provided by a hospital to process the claim with the insurance company. However, they are not responsible for any claims rejection as that is done by the insurance company. The policyholder needs to first inform the TPA in case of any claim.