In a first, IRDA suspends E-Meditek Insurance TPA’s licence1 min read . Updated: 22 Mar 2018, 08:43 AM IST
IRDA has cancelled E-Meditek Insurance TPA's licence for alleged laxity in servicing insurance policies and financial irregularities
Mumbai/Chennai: In a first, the insurance regulator suspended the licence of E-Meditek Insurance TPA Ltd, a New Delhi-based third-party administrator (TPA), for alleged laxity in servicing insurance policies and financial irregularities.
In an order passed on Tuesday, the Insurance Regulatory and Development Authority of India (IRDA) said it had received a whistle-blower complaint on 4 April 2017 against E-Meditek, accusing the TPA of misconduct, corruption, malpractice, money laundering and financial irregularities.
A TPA functions as an intermediary between an insurance provider and the insured.
E-Meditek has been allowed to continue servicing existing health insurance policies based on the discretion and direction of insurers, IRDA said. However, no insurer can entrust servicing of new policies or servicing of new insured under existing group schemes or policies to E-Meditek, the order added.
The regulator, following an inspection during 13-17 November, found that the violations by E-Meditek were detrimental to the interests of policy holders and insurers, the order explained.
“It is clear that IRDA’s stance is strict and firm against any kind of fraud or failure of governance at any TPA or any other insurance entity. So the industry should not be surprised. Governance issues are key to the functioning of any establishment, and most TPAs are aware of that. After this IRDA order, TPAs will further strengthen their oversight and governance if they have not done so already," said Shashikala Muralidharan, general manager and whole-time director of General Insurance Corp. of India.
E-Meditek did not respond to an email seeking comment. Its managing director Gopal Verma’s phone was not reachable.
E-Meditek has been in the business since 2002. IRDA renewed the firm’s licence till March 2020. The firm services 24 insurers and has at least 7 million registered members.
Nayan C. Shah, managing director, Paramount Health Services (TPA) Pvt. Ltd, said, “TPAs have been penalized in the past...But this suspension is a first for a mid-sized company in my knowledge. Customer service is bound to get disrupted as employees will begin to leave the company after the suspension."