Govt-owned general insurers shun their offspring, favour

private TPAs

Chennai, Sep 2 (IANS) Ever seen a parent company shunning its offspring? Public
sector general insurers are good examples.

Even after floating a health insurance claims processing company, Health Insurance
TPA of India Ltd (HITPA), the four non-life insurance companies palm out their health
insurance claims processing work to others - including to a company whose licence
was revoked by the sectoral regulator - and not to their own.

The strange ways of the four government-owned insurers - The Oriental Insurance
Company Ltd, National Insurance Company Ltd, The New India Assurance Company
Ltd and United India Insurance Company Ltd - have been frowned upon by the
Comptroller and Auditor General of India (CAG).

The HITPA is a Rs 120 crore equity based joint venture between the four general
insurers each contributing Rs 28.50 crore and balance Rs 6 crore by the General
Insurance Corporation of India.

The CAG in its report on 'Compliance Audit of Third Party Administrators in Health
Insurance business of Public SectorAInsurance Companies' has said HITPA provides
health insurance claims processing services only to the four promoter insurers and
hence is solely dependent on them for its growth.

"Current quantum of allocation of business to HITPA needs to be revisited by all PSU

insurers in view of comparable performance and adequate capacity of HITPA," it
recommended.

According to the CAG, the performance parameters of HITPA were comparable to

those of top ranking third party administrators (TPA) or claims processing agencies.

The CAG, in its audit, observed that HITPA which is a public sector TPA, despite
having adequate capacity and comparable performance indicators, was underutilised
by the public sector insurers.

As per the CAG report, the average turn around time (TAT) for cashless approvals in
case of HITPA was 60 minutes while for other top ranking TPAs, it ranged from 65
minutes to 197 minutes.
Further the claims to premium ratio/incurred claims ratio (ICR) of claims serviced by
HITPA ranged from 34 to 113 while ICR of other top ranking TPAs ranged from 95 to
114.

According to CAG, during 2019-20, the four companies had allocated health insurance
policies involving a premium of Rs 21,303.18 crore to the TPAs out of which the share
of HITPA was only 6.19 per cent.

The capacity utilisation of HITPA by the four government owned companies was just
3.68 per cent.

It is also pertinent to mention that HITPA requested (March 2018) tbe General
Insurance Public Sector Association (GIPSA, an association of the four PSU insurers)
to increase the business and transfer at least 10 per cent to 15 per cent of health
insurance claims processing work to HITPA.

"Though the Governing Board of GIPSA decided (September 2018) to shift 10 per cent
of Health Insurance claims processing work of the top five TPAs to HITPA based on
the up-scaled and capabilities of HITPA, the same was not implemented," the CAG
said.

"Thus, though HITPA was incorporated by the PSU insurers with a view to bring in
greater efficiency in health insurance claims management, sufficient opportunity was
not given to HIPTA by the promoter insurance companies," remarked the CAG.

--IANS