P K Bhagat to become MD of insurers' common TPA

Bhagat will take over the new post on June 3 for the company, based out of New Delhi

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P K Bhagat, general manager at General Insurance Corp of India (GIC), will become the managing director of the common third-party administrator (TPA), an in-house organisation mooted by public general insurers to settle medical insurance claims on a fast track and reduce the claims ratio. Bhagat will take over the new post on June 3.

Officials close to the development said the TPA would function as a corporate entity and would administer health claims from the public general insurers.

The TPA, according to insurance officials, is expected to be operational from January 1, 2014. This common TPA concept was mooted last September, and is expected to have National Insurance Co, New India Assurance Co, Oriental Insurance Co and General Insurance Corp of India (GIC) as stakeholders.

Sources said the name for this entity had been registered. Further, an official associated with this process said as against the popular perception, this common TPA would not be involved in all health claims, and case-to-case decisions would be taken based on the size of the risk and the company and complexities involved. The TPA is now in the process of putting in place information technology mechanisms and recruiting personnel for the new entity.

The TPA has been proposed to prohibit large-scale leakages while settling insurance claims in the health segment. According to industry players, it is expected to speed up the claim-settlement process as well as reduce the claims ratio of insurance companies. This move is also expected to reduce costs for insurance players, who pay a commission of approximately six per cent of premiums to TPAs to settle claims.  

This TPA would have the four public general insurers holding 23.75 per cent stake each. GIC will hold five per cent in the venture. Though Life Insurance Corp of India (LIC) has also been invited to be a part of this entity, a final decision is yet to be taken. If LIC becomes a stakeholder, the public sector general insurers will reduce their stakes.