Life Insurance

Third Party Administrator

TPA" means a Third Party Administrator who, for the time being, is licensed by the Authority, and is engaged, for a fee or remuneration, by whatever name called as may be specified in the agreement with an insurance company, for the provision of health services;

Conditions of and Procedure for Licensing of TPA

1) Only a company with a share capital and registered under the Companies Act, 1956 can function as a TPA.

(2) The main or primary object of the company shall be to carry on business in India as a TPA in the health services, and on being licensed by the Authority, the company shall not engage itself in any other business.

3. The minimum paid up capital of the company shall be in equity shares amounting to Rs. 1 crore(Rupees One crore only);

4. At no point of time of its functioning the TPA shall have a working capital of less than Rs. 1 crore;

5. At least one of the directors of the TPA shall be a qualified medical doctor registered with the Medical Council of India;

6. The aggregate holdings of equity shares by a foreign company shall not at any time exceed twenty-six percent of the paid up equity capital of a third party administrator.

7. Any transfer of shares exceeding 5% of the paid up share capital shall be intimated by the TPA to the Authority within 15 days of the transfer indicating the names and particulars of the transferor and transferee.

4. (1) The TPA shall obtain from the Authority a licence to function as a TPA for rendering health services.

2. The application for licence shall be made in writing to the Authority in Form TPA-1 appended to these regulations and shall be accompanied by a non-refundable processing fee of Rs. 20,000 (Rupees Twenty Thousand only) to the Authority by way of a crossed demand draft in favour of the Authority payable in Delhi.

3. The Authority may, in the course of examination of the application, call for such information or ask for production of such documents, as it may deem fit, and it shall be incumbent upon the applicant to furnish the same within the specified time.

4. The Authority, on examination of the application and details furnished by the applicant, may issue a licence, if it is satisfied that the applicant TPA is eligible to function as a TPA.

5. Every TPA approved by the Authority shall pay a further sum of Rs. 30,000 (Rupees Thirty Thousand only) to the Authority as licence fee before the licence is granted to it and the same shall be paid to the Authority in the manner as stated in sub-regulation (2) of this regulation.

6. A TPA whose application has been rejected by the Authority shall not, for a period of two years from the date of such a rejection, apply once again to the Authority for a licence.

5. A copy of the agreement entered into between the TPA and the insurance company or any modification thereof, shall be filed, within 15 days of its execution or modification, as the case may be, with the Authority.

6. More than one TPA may be engaged by an insurance company and, similarly, a TPA can serve more than one insurance company.

7. The parties to the agreement shall agree between themselves on the scope of the contract and the facilities that have to be provided. Such an agreement shall also prescribe the remuneration that may be payable to the TPA by the insurance company.

8. (1) Every TPA shall appoint, with due intimation to the Authority, from among its directors or senior employees, a Chief Administrative Officer (CAO) or Chief Executive Officer (CEO) who shall be responsible for the proper day to day administration of the activities of the TPA.

(2) Such a CAO or CEO shall possess the educational qualifications mentioned in sub-regulation ( 4 ) of this regulation and also undergo a specified period of training with any institution recognised by the Authority.

The qualifications referred to in sub-regulation(2) are -

1. a degree in arts, science or commerce or management or health or hospital administration or medicine; and

2. a pass in the Associateship examination conducted by the Insurance Institute of India or such equivalent examination as may be recognised by the Authority and notified from time to time;

3. completion of practical training, as may be specified by the Authority, not exceeding one hundred hours with an institution recognised by the Authority, for these purposes, from time to time.

Every licence granted by the Authority to a TPA or any renewal thereof, in terms of these regulations, shall remain in force for three years, unless the Authority decides, either to revoke or cancel it earlier, as provided in these regulations.

11. (1) A licence granted to a TPA may be renewed for a further period of three years on submission of the prescribed renewal application in Form TPA-3 alongwith a renewal fee of Rs. 30,000/-(Rupees Thirty Thousand only), atleast thirty days prior to the date of expiry of the licence.

2. Any failure on the part of the TPA to get its licence renewed before its expiry has to be explained to the Authority. A delayed application shall state the reasons for the delay and be accompanied by a late fee of Rs. 100/- (Rupees One Hundred only).

3. The Authority after examining the reasons given in the application by the TPA may renew the licence, if it is satisfied that the TPA was prevented by sufficient cause from applying for the renewal of its licence at least 30 days (Thirty days) before the date on which the licence ceased to remain in force.

4. The Authority may, if it is satisfied that undue hardship would be caused otherwise, accept any application after the licence ceased to remain in force, on payment by the applicant of a payment of Rs. 750/- (Rupees Seven Hundred Fifty only).

12. Where a licence granted by the Authority is lost or mutilated, the Authority may issue a duplicate licence on payment of a fee of Rs. 1,000/-(Rupees One Thousand only) accompanied by an application in writing made by the TPA.

REVOCATION OR CANCELLATION OF A LICENCE

13. A licence granted to a TPA may after due notice be revoked or cancelled by the Authority for one or more of the reasons as provided in regulation 14.

14. The Authority may initiate action under regulation 13 for any of the following reasons:

1)