Requirements for becoming a TPA :
A person can act as a TPA only with a valid licence issued by IRDA to perform the functions of a TPA. The requirements for obtaining a licence are as follows:
(a) Entity: The person applying for a licence shall be an entity which is a Company under the Companies Act, 1956
(b) Primary object: The main object as per the Memorandum and Articles of Association shall be to carry on business in India as TPA in the health services. Further engaging in any business other than TPA is prohibited
(c) Minimum paid up capital: Rupees One crore and maintenance of working capital of Rs.1 crore at all times.
(d) One of the Directors to be registered with Medical Council: One of the directors of the TPA shall be a qualified medical doctor registered with Medical Council of India
(e) Foreign equity restricted to 26%: TPA entity shall not have foreign holdings in excess of 26%
(f) Transfer of shares in excess of 5%: Prior approval of IRDA necessary before effecting any transferof shares in excess of 5% either through direct transfer or through issue of fresh equity shares to new or existing shareholders
(g) Fee: A processing fee of Rs.20,000 shall be payable alongwith the application. A further sum of `30,000 shall be payable as licence fee before the licence is issued
A licence granted under these Regulations shall be valid for 3 years, after which, upon payment of a renewal of `30,000, may be renewed for a further period of 3 years.