TPA (third party administrator)

What is a TPA in health insurance?

A TPA (third party administrator) is a company registered with IRDAI that an insurer hires to service its health insurance policies, mostly at claim time. The TPA issues health cards, runs the helpline, receives cashless requests from hospitals, checks documents, processes reimbursement claims and recommends what should be paid. The insurer still carries the risk and takes the final decision on every claim.

A TPA does not sell insurance and does not own the customer. It is a service provider to the insurer, paid a fee under a service agreement. Many insurers, especially standalone health insurers, process claims in-house instead of using a TPA. Where a TPA is engaged, the policy document and the Customer Information Sheet name it, with its contact details.

How TPAs are regulated in India

TPAs work under the IRDAI (Third Party Administrators, Health Services) Regulations, 2016, as amended. The main conditions, as published by IRDAI:

• The TPA must be a company under the Companies Act, 2013 whose sole object is providing health services, with "Insurance TPA" in its name.
• Minimum paid-up equity capital is ₹4 crore, and net worth must not fall below ₹1 crore at any time.
• Permitted work includes cashless and reimbursement health claims, hospitalisation claims under personal accident and domestic travel policies, pre-insurance medical examinations, and health services under overseas travel policies.

The 2026 amendment. The IRDAI (Third Party Administrators, Health Services) (Amendment) Regulations, 2026, notified on 30 July 2026, align the TPA rules with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. The main changes:

• A certificate of registration no longer runs for a fixed three-year term. It stays in force as long as the TPA pays an annual fee of ₹50,000 plus taxes by 31 January (or by 31 March with interest) and is not suspended or cancelled under section 42D of the Insurance Act.
• Existing TPAs holding three-year certificates apply for the new form of registration within 90 days before their current certificate expires.
• A TPA with majority foreign shareholding must have a resident Indian citizen as its board chairperson, or as its CEO, principal officer or managing director.
• TPAs must report related party transactions to IRDAI every quarter, file audited financial statements every year and publish these disclosures on their websites.

Rules the insurer must follow. IRDAI's Master Circular on Health Insurance Business (May 2024) requires every insurer to have board-approved criteria for monitoring TPA performance, service and turnaround times. A TPA's fee must not depend on the incurred claims ratio of the policies it services, so a TPA cannot earn more by cutting claims. Insurers must collect customer feedback on claim settlement, claw back TPA fees where service fails and pass the clawed-back amount to the customer.

Claim timelines that bind the TPA too. Under the 2024 master circulars, a cashless request must be decided within one hour and final discharge authorisation given within three hours of the hospital's request. Reimbursement claims must be settled within 15 days of submission. The insurer or TPA collects the documents from the hospital, and no claim can be rejected without the approval of the insurer's Claims Review Committee.

What a TPA means for distribution

For an agent, broker or bank partner, the TPA is where the promise made at the point of sale gets tested. A customer rarely remembers the insurer's brand at 2 a.m. in a hospital lobby; they remember whether the helpline answered.

• Know the TPA before the claim. Advisers should tell customers at policy delivery whether claims go to a TPA or to the insurer's in-house team, and share the helpline number, app and e-card. Many escalations come from customers calling the wrong party.
• Group business depends on it. In employer health covers, the TPA's service quality decides whether HR renews the scheme with the same insurer. Brokers often evaluate TPA turnaround, hospital desk presence and claim query handling as closely as premium.
• Member data is a distribution job. The 2024 rules say insurers must get group member details from the master policyholder early so cashless works from the first day, and no claim can be denied because those details were missing. Intermediaries who handle onboarding of corporate clients should push clean, timely member files.
• Rejection letters. A repudiation must come with the specific policy clause relied on and must be approved by the insurer's Claims Review Committee. If a customer receives a rejection that cites no clause, the adviser should help them raise a grievance with the insurer and, if needed, approach the Insurance Ombudsman.
• Complaints can name the TPA. Under IRDAI's policyholder protection master circular, a policyholder can complain against the insurer, the distribution channel or the TPA, and can use Bima Bharosa to register and track it.

TPA and insurer: who does what