IRDAI rejects licence renewal application of Alankit Insurance TPA
Alankit TPA can appeal to the Securities Appellate Tribunal against this order. But since the renewal application is cancelled, all contracts with insurers will have to closed.
July 02, 2021 / 08:23 PM IST
Insurance Regulatory and Development Authority of India (IRDAI) has rejected the licence renewal application of Alankit Insurance TPA (third party administrator). This was on account of non-submission of business data.
This means that Alankit cannot use the word 'TPA' in its company name. All existing agreements with insurance companies and network providers will be discontinued. Alternate steps including appointment of another TPA will have to be taken.
A TPA acts as an intermediary between the insurance company and the policyholder. When the policyholder want to lodge a health insurance claim, she is expected to contact the TPA, which in turn identifies a network hospital and guides the customer.
IRDAI said that Alankit TPA did not comply with the minimum business requirements. Each TPA has set targets for policy servicing based on the number of years of its operation.
The regulator has said that Alankit TPA can file an appeal with the the Securities Appellate Tribunal against this order.
In case of cashless claims, the TPA issues an authorisation letter, co-ordinates with the hospital authorities and after the treatment, collects the documents, bills etc. from the hospital and sends them to the insurer for settlement.
In the case of non-network hospitals, the policyholder pays first and later sends the claim documents to the TPA. The insurer then reimburses the policyholder.
The TPA does not take a decision pertaining to the payment or rejection of the claim; its role is restricted to being a facilitator.
In January 2019, IRDAI had cancelled the licence of E-Meditek Insurance TPA citing financial irregularities.