Third-Party Administrator (TPA)
Third-party administrators, also known as TPAs, are organizations that work in between the policyholder and the insurer. Because these organisations are not parties to the insurance contract, they are referred to as third parties. Insurers select these TPAs. Sometimes a single TPA works with different insurers.
The insurance regulator, IRDAI, regulates third-party administrators, who must follow its rules and guidelines. These third-party administrators provide services such as claim settlement, record keeping, etc.
Some insurers have also begun to have in-house claim settlement rather than relying on third party insurers, which simplifies the claim process.
So, before buying a health insurance policy, one should look at the claim settlement mechanism of the insurer and decide whether to go with an insurer that has a TPA or an in-house claim settlement team, along with all other insurance features.
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