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Industry for insurance repository offering claim-related services - The Economic Times

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Key Proposal: Expanding Insurance Repository Services

The Insurance Regulatory and Development Authority of India (IRDAI) is considering a proposal to allow insurance repositories to provide claim-related services. Currently, these repositories store insurance policies electronically.

Current Status and Future Decisions

The proposal was submitted under the previous IRDAI chairman and awaits a decision from the new chairman. Officials are evaluating various value-added service (VAS) mechanisms suggested by the repositories, consulting with stakeholders, including insurance companies.

Industry Perspectives and Benefits

Industry executives believe that allowing these services would fall under existing outsourcing guidelines. They anticipate faster claim settlements and increased demand for these services, potentially attracting new market players.

Clarification on this matter will benefit all stakeholders, particularly policyholders.
The increased sector opening is expected to bring more competitors and increased demand for premium services.

Government Initiatives and Technological Advancements

The government may introduce the Insurance Amendment Bill, which could allow 100% foreign direct investment in the insurance sector. A common digital assignment platform is suggested as a solution for challenges faced by policyholders, companies, and banks. This platform could manage claims end-to-end as a VAS.

Furthermore, the government is collaborating with insurance firms and IRDAI on the National Health Claims Exchange (NHCX) platform to streamline health insurance claim processing, and the IRDAI mandated a three-hour authorization time limit for discharge requests from hospitals.

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The insurance regulator is reviewing an industry proposal to let insurance repositories offer claims-related services to policyholders. At present there are four insurance repositories in India which allow policyholders to store all their insurance policies electronically in a single e-Insurance Account (eIA).

The proposal was submitted during the tenure of former Insurance Regulatory and Development Authority of India (IRDAI) chairman Debasish Panda, who retired last month, and a final decision might take place once his replacement takes over, said officials familiar with the matter.

"Insurance repositories have suggested different mechanisms to offer value-added services (VAS). They are being evaluated, and any decision will be taken after consultation with other stakeholders, including insurance firms," said one of the officials, who did not wish to be identified.

Industry executives said while the 2015 IRDAI guidelines on insurance repositories allow premier services to be offered to eIA holders from the Insurance Repository (IR) system, they should be within the overall ambit of "outsourcing guidelines" issued by the regulator to insurers.

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"A clarification on the matter will help all stakeholders, including policyholders, as they will be able to get faster settlement of their claims," an executive said on condition of anonymity.

The health claim ratio of stand-alone health insurers stands at 88.55%, as per the latest data.

"With the proposed opening up of the sector, we expect more players and a demand for these premier services," said the executive.

The government may introduce the Insurance Amendment Bill, which proposes 100% foreign direct investment in the sector, in the upcoming monsoon session of the Parliament, said people in the know.

According to Latesh Shetty, chief executive of Centrico Insurance Repository, a common digital assignment platform, can be a one-stop solution for the unique challenges faced by policyholders, insurance companies and even banks.

"On top of this, other VAS products can be built, including claims where insurance repositories can represent their customers and manage eligible claims to be processed as a value-added service for a nominal charge from lodgement to payout end-to-end," he said, adding that if the regulator permits, the company would explore this opportunity.

The government is already working with insurance firms and the IRDAI on the National Health Claims Exchange (NHCX) platform, which seeks to streamline and standardise processing of health insurance claims. Last year, the IRDAI had issued a directive that the insurer must grant the final authorisation within three hours of receiving the receipt of the discharge request from the hospital.