Draft IRDAI (Third Party Administrators – Health Services) (Amendment) Regulations, 2019

Jul 10, 2019 | by Avantis RegTech Legal Research Team

The Insurance Regulatory Development Authority (IRDAI) on July 09, 2019, has published a draft IRDAI (Third Party Administrators – Health Services) (Amendment) Regulations, 2019. IRDAI introduced certain new provisions and carry out certain modifications in the TPA Regulations, 2016.

The modifications made in the IRDAI (Third Party Administrators-Health Services) Regulations, 2016 are as follows:

1. In order to enhance the competition amongst the TPAs and to let the policyholders have an option of choosing TPA, it is considered to allow the policyholders to choose the TPA of their choice from amongst the TPAs engaged by the Insurer. 

2. The health services specified under TPA Regulations, 2016 covered only foreign travel policies while allowing the TPAs to service foreign travel policies issued by foreign insurers for policyholders travelling to India. However, now, “Foreign Travel” is replaced with “foreign travel or health or medical insurance”. 

3. The various fees charged by the Authority from the TPAs are also revised, which includes:

• the non-refundable processing fee from Rs. 20,000 to Rs. 1,00,000

registration fee for new applicants from Rs. 30,000 to Rs 2,00,000; and 

renewal application fee from Rs. 15,000 to Rs. 1,50,000 

4. IRDAI specified new qualifying norms to the promoters of the applicant TPA companies, which includes:

• that promoters of the applicant shall be carrying on any business or profession in the preceding three years to the date of application; and

• their net worth is positive in all the immediate preceding three years to the date of application; and

• the net worth of each promoter in the immediate preceding two financial years to the date of application is more than the capital contribution of the respective promoters.

• Investors holding more than 10% stake of the applicant shall be considered as the promoter; 

• all Indian investors other than promoters together shall not hold more than 25% of paid up equity share capital

• all promoters to agree to a lock in period of three years from the date of grant of Certificate of Registration.

5. A new provision is incorporated that a TPA whose CoR is revoked, cancelled or denied renewal shall also be barred from applying fresh application for a period of two years.

6. A TPA shall also furnish information or data pertaining to a group insurance policy of one insurer to another insurer only with explicit and written approval of both the Insurer and Group Policyholder to whom the data belongs.

All stakeholders are requested to forward their comments or suggestions to the office of IRDAI, Hyderabad or by e-mail to [email protected] by July 30, 2019.

Click here to download the Notification.


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