Irdai warns Heritage TPA against unilaterally closing health claims

The insurance regulator on Friday warned Heritage TPA against unilaterally closing health claims, saying that such actions violate regulatory norms, which mandate that only insurers are authorised to communicate claim decisions to policyholders.

 

“The TPA is hereby warned for closing the health claims on its own and issuing the communication regarding denial/repudiation of the claim directly to the policyholders in contravention of regulations…” Insurance Regulatory and Development Authority of India (Irdai) said in a statement.

 

The regulator also added that the TPA must ensure that the decisions on claims are not influenced by them and that the communication on claims repudiation “shall only be issued by the insurers and not the TPA”.

 

The order is in response to the remote inspection conducted by the authority from November 8, 2021 to November 11, 2021.

 

The insurance regulator noted that Heritage TPA did not forward the query letter sent by the insurance company to the policyholder before closing the claim and no reminder letters were forwarded to the policyholder.

 

According to Irdai norms, TPA has to issue deficiency requests to claimants/insureds and in case of non-submission of requested documents within seven days, TPA shall send three reminders at an interval of seven days each. However, according to Irdai’s inspection, the claimants/insured were informed that their claims were closed.

 

“It is not evident from documents shared that the TPA has taken permission from the insurer to close the claim… The wording of TPA’s communication implies as if the TPA itself has closed the claims,” Irdai said.

 

Further, the insurance regulator said that the order shall be placed before the board of the TPA and will provide a copy of the minutes of the discussion. The TPA is also asked to submit an Action Taken Report to the authority within 90 days from the date of order.