Chennai, April 29 (IANS) The joint venture promoted by four government-owned general insurers and the national reinsurer to handle their health insurance claims portfolio is expected to start operations by September this year, said a top insurance official.
“We are in the process of finalising the name for the TPA (third party administrator-claims processing outfit). Once that is firmed up, we will apply to the IRDA (Insurance Regulatory and Development Authority) for a licence,” Milind A. Kharat, chairman-cum-managing director of United India Insurance Company, told reporters here Monday.
The four state-owned insurers are the National Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd. and United Insurance Company Ltd.
According to Kharat, the four primary insurers will hold 23.75 percent stake each and five percent will be held by General Insurance Corporation of India Ltd. (GIC).
“The total project outlay is estimated at Rs.200 crore,” he said.
According to him, once the joint venture gets operational, the business will be transferred from the current service providers to the joint venture in a phased manner.
All the four insurers together earn a premium of around Rs.9,000 crore under their health insurance portfolio and pay a service fee of around five percent on the above to the TPAs.
While the insurers sell the policy and ultimately meet the claims out of their pocket, the TPAs earn the goodwill for settling the claims and blame the insurers for any delays. The insurers are not in a position of leverage their claims settlement record with their policy holders.
It is for this reason and also to have better control over claims servicing and cost many private general insurers have opted for processing the health insurance claims in-house.
“With our own claims processing company, we will be in a position to leverage our combined strength to negotiate better rates with the hospitals,” Asha Nair, director and general manager at United India, told IANS.
She said the registrar of companies has been approached to check on the availability of the names and once the name is finalised, application to the IRDA for licence will be made.
Nair said the proposed company will float a tender for supply of software for the new company.
She said hiring of top executives of the proposed company has begun.
Kharat said the companies will not move its middle or lower management level people to the new company.