Limited Web General Insurance Co example essay topic

Third Party AdministratorTPA' 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 along with a renewal fee of Rs. 30,000/- (Rupees Thirty Thousand only), at least 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) the Authority, on the basis of information received by it, or on the basis of its own enquiry or investigation, is of the opinion that the TPA is functioning improperly and / or against the interests of the insured / policyholder or insurance company; 2) the Authority, on the basis of information in its possession, is of the opinion that the financial condition of the TPA has deteriorated and that the TPA cannot function effectively or that the TPA has committed a breach of regulations (3), (4), (5) and (8) of these regulations; 3) the Authority, after enquiry or upon information, is of the opinion that the character and ownership of the TPA has changed significantly since the grant of licence; 4) the Authority, finds that the licence or any renewal thereof granted to the TPA was on the basis of fraud or misrepresentation of facts; 5) there is a breach on the part of the TPA in following the procedure or acquiring the qualifications laid down by regulation 8 of these regulations; 6) the TPA is subject to winding up proceedings made under Companies Act, 1956 or any statutory modification thereof. 7) there is a breach of code of conduct prescribed by regulation 21 of these regulations; 8) there is violation of any directions issued by the Authority under the Act or these regulations. Indian Insurance Sector The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. Reforms In Insurance Sector Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act).

As per the provisions of IRDA Act, 1999, Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into the insurance market which was hitherto the exclusive privilege of public sector insurance companies / corporations. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions: . Company is formed and registered under the Companies Act, 1956; . The aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company; . The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business...

The minimum paid up equity capital for life or general insurance business is Rs. 100 crores... The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs. 200 crores. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc.

Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad. Detailed information on IRDA is available at their web-site web Insurance companies: IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the 'Indian re insurer' for underwriting only reinsurance business. Particulars of the life insurance companies and general insurance companies including their web address is given below: LIFE INSURERS Websites Public Sector Life Insurance Corporation of India web Sector Allianz Bajaj Life Insurance Company Limited web Birla Sun-Life Insurance Company Limited web Standard Life Insurance Co.

Limited web Prudential Life Insurance Co. Limited web Vsya Life Insurance Company Limited web New York Life Insurance Co. Limited web Insurance Company Limited web Kodak Mahindra Life Insurance Co. Ltd. web Life Insurance Company Limited web AIG Life Insurance Company Limited web San mar Assurance Company Limited web CGU Life Insurance Co. Pvt. Limited web INSURERS Public Sector National Insurance Company Limited web India Assurance Company Limited web Insurance Company Limited web India Insurance Company Limited web Sector Bajaj Allianz General Insurance Co.

Limited web Lombard General Insurance Co. Ltd. web General Insurance Co. Limited web Sundaram Alliance Insurance Co. Ltd. web AIG General Insurance Co.

Limited web General Insurance Co. Ltd. web Credit Guarantee Corporation web Chubb General Insurance Co. Ltd. REINSURER General Insurance Corporation of India web of the interest of policy holders: IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps: .

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and policyholders's er vicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim... The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims... It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public... All insurers are required to set up proper grievance redress machinery in their head office and at their other offices...

The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract. Regulatory Issues The IRDA Bill lays down that the Indian promoter must dilute the stake in the private insurance firms from 74 per cent to 26 per cent in ten years. The bill stipulates tough solvency margins -- Rs 500 million for life insurance firms, Rs 500 million or a sum equivalent to 20 per cent of net premium income for general insurance and Rs 1 billion for reinsurance business. The insurer has to maintain separate accounts relating to fund of shareholders and policyholders.

The funds of policyholders should be retained within the country but does not cover repatriation of profits and dividends. Insurance companies under the new regime will have to have exposure to rural and social sectors. Foreign investment in insurance, the bill states, is crucial to financing infrastructure and better insurance cover. The key to success in opening up the insurance sector in India is regulation. An example of how poor regulation can destroy a market is the mutual fund industry. A combination of improper marketing practice and promises has resulted in a loss of investor faith in that industry.

Incidentally, the insurance industry in India itself has gone through the same phase. One of the reasons for nationalization of the insurance industry (LIC in 1956 and GIC in 1973) was the mismanagement and malpractice of erstwhile private players. But if the statements of IRA officials are anything to go by, the new regulations are expected to be on the right track. N I Ranga chary, chairman, IRA, has already provided the time table for the changes once the Bill is passed. The IRA has already indicated that it will have tough norms for new participants. Investment norms fixed Irda has notified the new investment guidelines for insurance companies that, for the first time, feature mandatory investments in the infrastructure sector.

The guidelines also prohibit pension and general annuity funds from making investments in unapproved securities. The percentage of funds which insurance companies are free to invest in the market varies across different insurance segments. In the general insurance segment, Irda will lay down the manner in which 45 per cent of the funds are to be invested, leaving 55 per cent for investment in the markets. Out of the 45 per cent of the mandated investments, 30 per cent will have to be invested in central and state government securities.

Investment in the former has to be at least 20 per cent. Five per cent of the invertible funds will have to be earmarked for housing and fire-fighting activities and 10 per cent for the infrastructure and social sectors. As for the 55 per cent market investments, Irda stipulates that 30 per cent will be governed by prudential norms, while up to 25 per cent can be invested in unapproved securities. This will include investment in equities.

Life insurance companies have to invest up to 50 per cent of the funds in government and government approved securities. Out of this, not less than 25 per cent will have to be invested in government securities. Companies have to invest another 15 per cent in the infrastructure and social sectors. That leaves only 35 per cent of the funds for investment in the market, 20 per cent of which will be governed by prudential norms. For pension funds, the minimum investment in government and government approved securities is 40 per cent, with a minimum 20 per cent earmarked for government securities. The remaining 60 per cent has to be invested in approved securities.

Insurance companies must have a separate committee to look into the investments. It will have to be headed by the chief executive officer and have two non-executive directors and chiefs for investment and finance. For the life insurance companies, the appointed actuary will also be member of the committee.