Third Party Administrator (TPA) Registration with IRDAI

Third Party Administrators are business entities registered with the Insurance Regulatory and Development Authority of India (IRDAI). They are hired by an insurance company to streamline the insurance process. Basically, they act as an intermediary between the insurers and the policyholders. 

The TPAs handle claims processing, issue authorization for cashless hospitalization and facilitate network hospital coordination. In this blog post, we shall explain the key requirements and process for registering a third party administrator (TPA) entity with the IRDAI. 

Services Provided by a TPA

A TPA is an important entity in the insurance industry. It provides a wide range of health services, including the following services :-

Want to know How does a TPA help policyholders? Check out our detailed guide on role of third party administrator.

Eligibility Requirements for TPA Registration

Here is the eligibility criteria for TPA registration :-

• Only a company can register as a TPA with the IRDAI. An individual cannot become an IRDAI-registered TPA. 

• The company must be registered under the Companies Act, 2013, and have a share capital. 

• The TPA’s main and sole purpose, on being registered with IRDAI, shall be to exclusively carry on business of providing health services. It cannot engage in any other business. 

• A minimum paid up equity share capital of Rs. 4 crore needs to be maintained by the TPA. 

• Additionally, the TPA’s net worth must be a minimum of Rs. 1 crore during the period of registration. 

• The TPA shall mandatorily include the term ‘Insurance TPA’ in its name to reflect that it is in the business of TPA for rendering health services. 

• Foreign investment in TPA is permitted subject to specific guidelines, regulations and instructions issued by the Government of India. 

• At least one director of the TPA must hold an MBBS degree. Additionally, they must be registered with the Medical Council of India or Medical Council of any state of India.

• The directors must have a valid DIN and not be disqualified under any law.

• The TPA shall have adequate office space and trained personnel to render health services effectively. 

• It should tie up with hospitals having the necessary infrastructure to provide quality healthcare services to policyholders.  

Documents Required for TPA Registration

For third party administrator license, the following documents are required :-

• Certificate of Incorporation of Company.

• Memorandum of Association (MoA) and Articles of Association of Company (AoA).

• Copy of Company PAN Card.

• Details of Directors of Company and Principal Officers.

• Net Worth Certificate and Shareholding Pattern certified by a practicing Chartered Accountant (CA). 

• IT Infrastructure Details.

• Form for intimation of appointment of director, CEO, CAO, CMO, etc.

• Other necessary documents required by IRDAI.

TPA Registration Process

To register as a TPA with IRDAI and obtain the TPA license in India, the following steps need to be completed :-

• The applicant entity desirous of registering as a TPA with the IRDAI needs to first register on the IRDAI BAP Portal.

• After registering on the portal, the applicant entity must submit the TPA registration application online to the IRDAI. Along with the application, a non-refundable processing fee of Rs. 1,00,000/- (one lakh rupees) + applicable taxes, must be paid via payment gateway facility available on the portal.

• The IRDAI may request the production of documents as it deems necessary. It is the responsibility of the applicant to submit these documents online within the prescribed timeframe. 

• Upon carefully reviewing the application and the information provided by the applicant, the IRDAI may issue the Certificate of Registration if it is satisfied that the applicant meets all requirements and conditions. 

• It is important to note that each applicant approved by the Authority for the Certificate of Registration must also pay a registration fee of Rs. 2,00,000 (two lakh rupees) + applicable taxes, before the Certificate of Registration is granted.

Conclusion

A Third Party Administrator is one of the most important entities in the insurance industry. All TPAs in India are required to be registered with the Insurance Regulatory and Development Authority of India. Without obtaining a Certificate of Registration from the Authority, it is not possible to operate as a TPA in India. Further, only a company with share capital incorporated under the Companies Act, 2013, is eligible to register as a TPA. Partnership firms, sole proprietorships or any other business structures are not permitted to carry out TPA activities.

Want to know about other important entities in the insurance industry like insurance brokers and corporate insurance agents for business ideas? You can connect with our IRDAI consultants!

Frequently Asked Questions (FAQs)

Q1. Can a private limited company be registered as a TPA with IRDAI?

A. Yes, a Private Limited Company can be registered as a Third Party Administrator (TPA) with the IRDAI.

Q2. Which authority issues the TPA license in India?

A. The Insurance Regulatory and Development Authority of India (IRDAI) is responsible for issuing the TPA license in India. 

Q3. What is TPA registration fee?

A. The IRDAI TPA registration fee is Rs. 2,00,000. Apart from this expense, a non-refundable processing fee of Rs. 1,00,000 needs to be paid when submitting the application with the Authority. If you seek assistance from a professional consultant for the registration process, then they’ll charge you professional fees for their services. 

Q4. What is the validity of the TPA license?

A. TPA license, issued by the IRDAI, comes with a validity of 3 years. 

Q5. What is TPA license renewal fee?

A. TPA license renewal fee is Rs. 1,50,000.

Q6. Can a partnership firm be registered as a TPA with IRDAI?

A. No, only companies under the Companies Act, 2013, are eligible for TPA certificate registration. 

Q7. Is it mandatory for a TPA to appoint a Chief Medical Officer?

A. Yes, it is mandatory for a TPA to appoint a Chief Medical Officer (CMO). The CMO must hold a MBBS degree and a valid registration from the Medical Council of India/State Medical Council. 

Q8. What is the minimum net worth requirement for a TPA?

A. The minimum net worth requirement for an IRDAI-registered third party administrator is Rs. 1 crore, according to the official IRDAI website. At no point during the registration period should the TPA’s net worth fall below this amount.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.