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companies palm out their health insurance claims processing work to others - including to a company whose licence was revoked by the sectoral regulator - and not to their own.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.