CU-BBA-SEM-III-Fundamentals of Insurance-Second Draft-converted

• He/she should have passed a specialisation subject related to life insurance. Currently, specialisation refers to a Specialist Application subject as put forth by the Institute of Actuaries in India. • A prospective candidate should have at least 3 years of post-fellowship experience pertaining to the annual statutory value of life insurers. • A minimum of 10 years’ experience in the life insurance industry, out of which, at least 5 years should be that of the post-fellowship experience. In the case of general insurance: • He/she should have passed a specialization subject related to general insurance. As per the Institute of Actuaries in India, currently, specialization refers to a Specialist Application subject. • He/she should have at least 1 year of post-fellowship experience pertaining to the annual statutory value of a general insurer. • A minimum of 7 years’ experience in the general insurance industry, out of which, at least 2 years should be that of the post-fellowship experience. In the case of health insurance: • He/she should have passed a specialization subject related to health or general insurance. Similar to the above two categories, as per the Institute of Actuaries of India, currently, specialization refers to the Specialist Application subject. • He/she should have at least 1 year of post-fellowship experience pertaining to the annual statutory value of a health or general insurer. • A minimum of 7 years of experience in the general or health insurance industry, out of which, there must be at least 2 years of post-fellowship experience. Apart from these, an individual can be eligible for the position of Appointed Actuary with any insurance company if they comply with the following criteria: • Should be an employee of an insurance company. • Is not already appointed as an actuary with any other insurance company in India. • Is not over the age of 65 years. • Possesses a Certificate of Practice from the Institute of Actuaries in India. 201 CU IDOL SELF LEARNING MATERIAL (SLM)

• Has not committed any professional breach or is not guilty of any other misconduct. Individuals satisfying the above criteria can be appointed as an actuary for insurance companies by the IRDA. Figure 12.1 Membership in IAI 12.5 DEFINITION: THIRD PARTY ADMINISTRATORS • TPA or Third Party Administrator (TPA) is a company/agency/organization holding license from Insurance Regulatory Development Authority (IRDA) to process claims - corporate and retail policies in addition to providing cashless facilities as an outsourcing entity of an insurance company. A Third-Party Administrator is a company that handles insurance claims that are covered by the Mediclaim program. In general, these managers are self-contained, but they may also serve as an agent for the insurer/s. Insurance Regulatory IRDAI issues licenses to these organizations. The number of insurers, insurance plans offered, types of health goods sold, and customers have all risen significantly over time. Finally, it became impossible to keep track of jobs, which resulted in poor service. As a result, IRDA produced the Third-Party Administrators. Since then, a TPA has been held accountable for: • High quality consistent services. • Processing voluminous health insurance claims 202 CU IDOL SELF LEARNING MATERIAL (SLM)

Role of TPA in Health Insurance A TPA plays a vital role in the total processing of health insurance claims. In the practical world of insurance, some of the jobs of a TPA may refer to the following kind: Issue the Health Cards to the Insured: A confirmation process is carried out for any policy given to the policyholder. It is achieved by the issuance of a valid health card. This card contains information about the policy number as well as the TPA in charge of claims processing. The insured will present this card at the time of admission to the hospital and notify the insurer or TPA of the claim's incidence. It's one of the most important documents for claim processing. Smooth Claim Processing and Settlement: It is the responsibility of a TPA to expedite the claim as soon as the insured informs them of it. Their job is to go through all of the records that have been submitted in support of the allegation. It may request as much information as is needed to double-check the data. The claim will be settled either cashlessly or on a refund basis. In any case, a TPA would be responsible for inspecting all records. The TPA will obtain the documentation from the hospital in the case of Cashless. In other situations, the TPA will request the policyholder's supporting documents and bills. Arrange for Value-Added Services: Apart from claim processing and card issuance, a TPA may also arrange for services such as ambulances, wellness programmes, and more. Helpline Facility: Both policyholders have access to details and other support when filing a claim by calling their TPA's helpline. Customer service is available 24 hours a day, seven days a week, and it can be reached from anywhere in India. Policyholders may also check the status of their claims by calling 1800-258-5956, which is a toll-free number. Hospital Networks are Strengthened: 203 CU IDOL SELF LEARNING MATERIAL (SLM)

Having a TPA is a must if you want to get the most out of your health insurance policy. It also establishes a strong network of hospitals where policyholders can receive care. The TPA wants to enlist the best hospitals who can easily set up cashless payments and allow for rate negotiation. How TPA helps Policyholders? A third-party administrator (TPA) serves as a link between the insurance provider and the policyholder. Their role is to make the claim process for health insurance plans as simple as possible. As we all know, there are two forms of claims: a) Cashless and b) Reimbursement claims. The policyholder goes to the hospital as soon as he or she requires medical or emergency care. A claim becomes admissible if the person is asked to stay in the hospital for at least 24 hours (for diseases that are not otherwise specified, such as cataracts). In this situation, the policyholder will notify the TPA or insurer of the admission and the need for care. If necessary, the TPA would ask the hospital to set up a cashless facility. Otherwise, the reimbursement demand would be processed. If cashless is accepted, the hospital will send all bills to the TPA after the treatment is completed. If not, the policyholder would be required to send the documents at a later date. The TPA's authorities will examine the bills and other records before allowing the claim to be settled. If you don't have any cash, you'll have to pay the hospital. However, the policyholder may be reimbursed for his or her costs by the insurance provider. 12.6 SUMMARY • • Uunderwriters are responsible for selecting the individuals the insurance company can insure from among those submitting proposals, and also the price it can insure them for, based on their risk profile. • Insurance underwriters asses the risk of insuring a home, car or driver. They also assess individuals who are applying for life insurance policies. Insurance underwriters determine if the contract is profitable for the insurer. • Insurance underwriters are insurance professionals. They understand insurance risks and how to avoid them. They use their risk assessment to decide if they will insure someone and under what terms they’ll provide a policy. 204 CU IDOL SELF LEARNING MATERIAL (SLM)

• Surveyors and Loss Assessors are service providers to a general insurance company, usually at the time of a fire or motor insurance claim. They carry out claim surveys and estimate the quantum of loss. • Surveyors are professionals who assess the loss or damage and serve as a link between the insurer and the insured. They usually function only in non-life business. Their job is to assess the actual loss and avoid false claims. • An actuary is a professional who specializes in the field of analyzing financial risks by implementing statistical, financial and mathematical theories. In insurance, actuaries aid in assessing risks which help companies in the estimation of premiums for their policies. • To be appointed as an actuary with any insurance company, an individual has to fulfil the following criteria, as put forth under regulations: • He/she should be a resident of India. • Should be a fellow member as per the Actuaries Act, 2006. • TPA or Third Party Administrator (TPA) is a company/agency/organization holding license from Insurance Regulatory Development Authority (IRDA) to process claims - corporate and retail policies in addition to providing cashless facilities as an outsourcing entity of an insurance company. • A TPA plays a vital role in the total processing of health insurance claims. 12.7 KEYWORDS • Surveyors - are professionals who assess the loss or damage and serve as a link between the insurer and the insured • Loss Assessors - conduct claim surveys and calculate the amount of damage • Actuaries - is a specialist who specialises in using statistical, financial, and mathematical theories to analyse financial risks • Third party Administrators - act as middlemen between the insurance company and the policyholder, and their primary role is to process and resolve claims • LIC ACT -The Life Insurance Corporation Act, 1956 205 CU IDOL SELF LEARNING MATERIAL (SLM)

12.8 LEARNING ACTIVITY 1. List out the details of how to become an actuary in Life insurance stream ___________________________________________________________________________ ____________________________________________________________________ 2. List out the details of how to become an actuary in General insurance stream ___________________________________________________________________________ ____________________________________________________________________ 12.9 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define the role of underwriter? 2. Who can be Appointed as Actuaries for Insurance Companies? 3. How TPAs helps Policy Holders? 4. What are the various opportunities available to sell insurance products? 5. How surveyors and Loss assessors help to assess the risk of the insurance? Long Questions 1. Explain the various career opportunities available in insurance sector? 2.. Explain the process of underwriting? 3.Define the role of Actuaries in insurance company? 4. Define the role of TPAs in Health insurance? 5. How TPAs helps Policy Holders? Explain B. Multiple Choice Questions 1. ----------- asses the risk of insuring a home, car or driver a. Underwriters b. Insurer 206 CU IDOL SELF LEARNING MATERIAL (SLM)

c. Insured Person d. Bank 2. ---------------are service providers to a general insurance company to assess the loss. a. Surveyors and Loss assessors b. Underwriters c. Bancassurance d. Agents 3. ------------ should be a fellow member as per the Actuaries Act, 2006. a. Actuary b. Underwriter c. Surveyors and Loss assessors d. Agents 4. Surveyors come into the picture when estimated losses are in excess of ---------- for a motor insurance claim. a. Rs.50,000 b. Rs.1 Lakh c. Rs.25000 d. None of these. 5. ------------ is a company/agency/organization holding license from Insurance Regulatory Development Authority (IRDA) to process claims. a. Third Party Administrators b. Insurance company c. GIC Re 207 CU IDOL SELF LEARNING MATERIAL (SLM)

d. LIC Answers 1-a 2-a 3-b 4-b 5-a 12.10 REFERENCES Text Books: • IC – 38 – Insurance Institute of India. Reference Books: • Sethi, Jyotsna and Bhatia, Nishwan, “Elements of Banking and Insurance” • Emmett J.Vaughan and Therese Vaughan “Fundamentals of Risk and Insurance” • Agarwal, O.P “Banking and Insurance” • Periasamy,P; Veeraselvam,M., “Risk and Insurance Management”, Tata Mc Graw Hill 208 CU IDOL SELF LEARNING MATERIAL (SLM)