CAG Flags Underutilisation of PSU Insurers' TPA HITPA; RTI Leaves Action on Allocation Unclear

The news

More than four years after the Comptroller and Auditor General (CAG) flagged the underutilisation of Health Insurance TPA of India Ltd (HITPA), a third-party administrator promoted by four public-sector general insurers, accountability over the business allocated to it remains elusive. A 2022 CAG report found that HITPA had adequate capacity and performance parameters comparable to leading TPAs, yet received only a fraction of the business handled by its promoter insurers. Responses to Right to Information (RTI) applications filed with the four insurers do not establish whether allocations have increased significantly or what action has been taken on the audit recommendation.

New India Assurance and Oriental Insurance declined to disclose information sought across the questions, invoking Section 8(1)(d) of the RTI Act, which exempts commercial confidence and trade secrets where disclosure could harm competitive interests. Section 8(2), however, permits disclosure where public interest outweighs the protected interests. United India Insurance and National Insurance provided some operational information available on their websites but withheld financial and performance-related details. None of the four insurers furnished a clear account of action taken on the CAG's recommendation to revisit business allocation to HITPA.

HITPA's FY2024-25 annual report, the latest available on its website, shows a profit after tax of ₹15.03 crore. It earned around ₹73 crore in servicing fees and ₹17.24 crore in other income, servicing premiums worth approximately ₹2,543 crore and covering 30.1 lakh lives. HITPA's leadership did not respond to queries on business allocation, capacity utilisation, technology investments, claims-processing performance, reported system disruptions, employee attrition or the status of its IRDAI registration renewal. Its website lists the registration as valid until June 5, 2026.

What did the CAG find and what was promised?

HITPA was incorporated on August 14, 2013, as a joint venture of New India Assurance, United India Insurance, Oriental Insurance and National Insurance, with state-owned reinsurer General Insurance Corporation of India (GIC Re) also holding a stake. It was registered with the Insurance Regulatory and Development Authority of India (IRDAI) in June 2014. According to the CAG, HITPA had paid-up capital of ₹120 crore as of March 31, 2021, with each of the four insurers contributing ₹28.50 crore and GIC Re holding the remaining ₹6 crore. HITPA had approached the General Insurance Public Sector Association (GIPSA) in March 2018, seeking at least 10-15% of health insurance claims-processing work. GIPSA's governing board agreed in September 2018 to transfer 10% of the work handled by the five largest TPAs to HITPA, but the decision was not implemented.

Why did insurers resist and what do they say now?

The insurers attributed the low allocation to HITPA's limited geographical presence, competition from established TPAs and reluctance among group clients. The CAG rejected these explanations, pointing out that HITPA had adequate capacity and a presence in 10 major cities, including all four metros. Asked about follow-up action, National Insurance said, "The matter related to the cited report is under review, therefore, the information does not exist at present." United India said, "The subject matter is under process, information sought does not exist as on date."