Oriental Insurance may drop four intermediaries with rival stakes

Oriental Insurance may drop four intermediaries with rival stakes
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First Published: Tue, Jun 12 2007. 01 00 AM IST
Updated: Tue, Jun 12 2007. 01 00 AM IST
With private insurance rivals buying equity stakes in third party administrators (TPAs), The Oriental Insurance Co. Ltd is likely to withdraw its business from four TPAs—Family Health Plan Ltd, Paramount Healthcare Management, Medi Assist India Pvt. Ltd and TTK Healthcare Services Pvt Ltd.
These administrators maintain databases of policyholders and handle all post-policy issues, including claim settlements. They were introduced by the insurance regulator to speed up what was typically a very long-drawn-out settlement procedure. With the TPAs, policyholders can use their insurance ID card at authorized hospitals to get cashless treatment and then the TPAs take over the claim settlement process.
A senior official of Oriental, who didn’t want to be named because of company policy, said: “These TPAs are being viewed as competitors since their parent firms are from the health insurance industry and we cannot share our databases with our competitors. The other three general insurance companies have already withdrawn their business from them, we also want to discontinue.” He was referring to the National Insurance Company Ltd, The New India Assurance Co. Ltd and United India Insurance Co. Ltd.
None of the four TPAs were willing to comment.
India’s insurance regulator, Insurance Regulatory and Development Authority (Irda) said insurance companies buying stakes in TPAs was not a major issue.
“Though some of the health insurance companies have tied up with TPAs, we still have sufficient number of 22 registered TPAs for the rest of the insurance companies,” said C.S. Rao, chairman of Irda. “It is well within the rights of insurance companies if they tie up with these insurance intermediaries,” he added.
An executive associated with the insurance business said the move could prompt more insurance companies to depanelize the four TPAs.
“There are high chances that more companies will follow the route of Oriental Insurance and will scrap the services of TPAs who are involved with competitors,” said S.K. Sethi, CEO at Ria Insurance Brokers, a Delhi-based insurance brokerage company.
Last year, the Reliance-Anil Dhirubhai Ambani Group bought a major stake in Bangalore-based Medi Assist. The Apollo Group owns a stake in Family Health Plan, and Munich Re, the world’s largest reinsurance company, has acquired a stake in Paramount. Similarly, Swiss Re, a leading reinsurer, has a stake in TTK Healthcare Services.
Oriental Insurance currently has 16 TPAs in its panel. The removal of four TPAs could mean more business for the remaining ones.
“Policyholders of Oriental will not get affected by the decision, as old policyholders will continue to be served by the depanelized administrators for the next 12 months. However, new policyholders will not get registered with the depanelized administrators,” said the Oriental official.
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First Published: Tue, Jun 12 2007. 01 00 AM IST
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