The Competition Commission of India (CCI) has set October 13 as the date for the hearing of the petition made by third-party administrators – intermediaries which manage health insurance claims. TPAs had moved the competition commission and Irda to block a move by state-owned non-life insurers to float a captive company to manage claims. TPAs fear that the captive company will put them out of business which will result in cartelisation, market dominance and monopolisation by state-owned companies.
A senior representative of TPAs said the association expected that the regulator would get involved in the dispute. TPAs had complained that state-owned insurers were seeking partners for a proposed third-party entity which has not been approved by the insurance regulator.
TPAs have raised two main objections. The first is that by promising to outsource all work to a captive company, state-owned insurers who account for over 80% of the TPA business, will effectively shut them down. If TPAs shut shop, no insurer will be able to give policyholders a choice of TPAs as required by Irda. Secondly, no new health company can come up as there wouldn’t be any independent TPA to provide it with infrastructure support. The second objection is that the regulator has so far not permitted private insurers to have a stake in the TPA business. Given this stance, they say the regulator cannot grant permission to public sector companies.
The General Insurers (Public Sector) Association (GIPSA) has floated a tender inviting expressions of interest (EoI) from potential partners to form a TPA JV. Speaking to ET, M Ramadoss, chairman, New India Assurance and head of GIPSA, said: State-owned insurers have received applications from 24 bidders to partner in their TPA venture. He added that GIPSA has not yet received any notice from the Competition Commission.
Most of the TPAs are not eligible to bid because of the criteria that require the bidder or their parent to have a net worth of `250 crore. The last day for bids has been extended to September 23. TPAs have written to GIPSA asking theassociation to keep EoIs in abeyance until Irda responds.