Chennai, Sep 6 (IANS): The plans of four government-owned general insurance companies to float a company for processing healthcare claims have hit the Competition Commission of India (CCI) hurdle, which ordered a probe into the move.

According to CCI's latest news letter, the fair trade regulator has ordered an investigation by its director general against General Insurers' (Public Sector) Association of India (GIPSA) and other public sector non-life insurers for alleged anti-competitive practices.

It was alleged the four companies - New India Insurance, Oriental Insurance, United Insurance and National Insurance - selling health insurance policies were not allowing Third Party Administrators (TPAs- claims processing agency) to function independently.

On the contrary, they have created in-house TPA to settle any insurance claims.

"The aforesaid conduct of the opposite parties was against the prevailing world wide practice to keep TPAs independent from the insurance companies," the CCI newsletter stated.

It was also alleged that the GIPSA - an unregistered body - is providing a platform to the insurance companies to share sensitive information with each other, which not only affects competition in the market, but also provides space to them for exchanging information regarding claims ratio, marketing efforts, terms and condition of TPAs etc.

The commission, after considering the matter, was prima facie satisfied that a was a case.

According to CCI, the four companies have floated in house TPA to reduce their claim ratio, which may potentially result into rejection of claims on ad-hoc basis.

"The said practice was found by the commission to not be in alignment with prevailing global practices where the TPAs and insurers are operating independently," CCI said in the newsletter.

As per Insurance Regulatory and Development Authority (IRDA), there are 33 licensed health insurance TPAs in the country.

Several non-life insurers and also standalone health insurance companies do not outsource the health insurance claims processing.

Health Insurance TPA of India, the common health insurance claims processing company floated by four public sector non-life insurers and the General Insurance Corporation of India. The company is yet to get the TPA licence from IRDA.