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Title: FINAL ORDER
Reference No.: IRDA/TPA/ORD/MISC/200/08/2014
Date: 26/08/2014
In the matter of M/s E-Meditek (TPA) Services Ltd.
This is based on the reply to Show Cause Notice dated 29th May 2014 and Submissions made during Personal Hearing Chaired by Sri M. Ramaprasad, Member (Non-Life), IRDA, on 1st July 2014 at 1430 hrs. at the office of Insurance Regulatory and Development Authority, 3rd Floor, Parishrama Bhavanam, Basheerbagh, Hyderabad.
Show Cause Notice on observed deficiencies in the functioning of licensed TPA namely, E-Meditek (TPA) Services Ltd. (E-Meditek TPA / TPA) was issued and in deference to the licensed entity’s request to hear them on the charges for which they had also filed written submissions, the undersigned during the course of the personal hearing heard the submissions of the TPA company represented by Mr. Gopal Verma, M.D., Mr. B.S. Kaintura, CAO and Ms. Charu Kochar Jain C.S., of E-Meditek TPA. On behalf of the Authority, Mr. M. Ramaprasad, Member (Non-Life), Mrs. Yegna Priya Bharath, Joint Director (Health) and Mr. Bhaskar Khadakbhavi, Assistant Director (Health – TPA), were present in the personal hearing.
The submissions made by the TPA in their written replies to the Show Cause Notice issued by the Authority and also those made during the course of personal hearing were taken into account.
The findings on explanation offered by E-Meditek TPA to the issues raised in Show Cause Notice and the decisions are as follows;
1. Charge No. 1:
Mr. Bijaya Singh Kaintura, (BS Kaintura) is the CAO of E-Meditek TPA and also a director in M/s. India Insurance Brokers Pvt. Ltd. (II Brokers). The said fact was not disclosed by E-Meditek TPA, in their undertaking to the Authority.
Reply of E-Meditek:
E-Meditek TPA submitted that M/s. II Brokers had neither applied for nor had even been rejected by the authority to operate as an insurance broker. In view of this we interpreted its status as non-conflicting and just shell company and as a company other than an insurance broking company.
2. Charge No. 2:
E-Meditek TPA had taken declaration from Mr. B.S. Kaintura about involvement in insurance or insurance related activity. Further, MR. B.S. Kaintura in his undertaking to E-Meditek TPA and before appointment on the post of CAO, had declared that, he was holding the position of non executive director of M/s. India Insurance Brokers Pvt. Ltd. as the Company did not accepted his resignation.
However, the said known fact was not disclosed by E-Meditek TPA to the Authority.
Reply of E-Meditek:
E-Meditek TPA submitted that, though, they had satisfied themselves, they agree that they should have disclosed the same to the Authority.
3. Charge No. 3:
E-Meditek TPA vide point no. 3 (i) of letter dated 15-04-2014, had submitted that Mr. B.S. Kaintura was holding the position of non-executive director of II Brokers. However, as per RoC records the designation of Mr. B.S. Kaintura is Director of II Brokers.
Reply of E-Meditek:
E-Meditek TPA submitted that, the website of MCA only depicts the designation as Director / Managing Director / Whole time director.
4. Charge No. 4:
E-Meditek TPA submitted that Mr. B.S. Kaintura resigned from the post of non executive director of II Brokers and submitted copies of resignation letter dated 28-07-2011 of Mr. B.S. Kaintura and certified copy of extract of the resolution passed in Board Meeting dated 04-10-2012 of II Brokers, about resignation of Mr. B.S. Kaintura.
However, as per RoC records, Mr. B.S. Kaintura, continues to hold the position of Director of M/s. II Brokers up till 06-05-2014 (last date of examination of RoC records).
Reply of E-Meditek:
E-Meditek TPA submitted that, due to an administrative lapse of part of II Brokers, the records about resignation of Mr. B.S. Kaintura were not updated in RoC.
Violation noted for above Charge Nos. 1 to 4:
Violation of Reg. 21 (1) to be read with Reg. 25 (3) of IRDA (TPA – Health Services) Regulation, 2001.
Decision (Charge No. 1 to 4) :
The licensed entity was granted license first in the year 2002 and has completed more than ten years of existence and has undergone the process of four renewals. The deficiencies pointed out by the Authority and concurred by the licensed entity could, very well, have been declared voluntarily or at least during submission of various requirements / undertaking needed to consider for renewal of their TPA license. Obviously, the company has failed, which only reflects the casual attitude while making submissions to the Regulatory Authority.
5. Charge No. 5:
E-Meditek TPA in the financial years 2010-11, 2011-12 and 2012-13, had rendered services for Pre-employment Health Check-up for the new employees joining to a Company.
Violation of Reg. 3 (2) of IRDA (TPA – Health Services) Regulation, 2001 to be read with Reg. 21 (2) (n) of IRDA (TPA – Health Services) Regulation, 2001 and the provisions of Authority circular no. IRDA/NL/CIR/HLTH/207/09/2011 dated 06-09-2011.
Reply of E-Meditek:
E-Meditek TPA submitted that it was a process lapse.
Decision:
The TPA for three financial years had engaged themselves in other business than TPA / Health Services.
6. Charge No. 6:
E-Meditek TPA, as per their web-site had offered services for Self-Funded Schemes of State Government.
Violation of Reg. 3 (2) of IRDA (TPA – Health Services) Regulation, 2001 to be read with Reg. 12 (e) of IRDA (Health Insurance) Regulation, 2013, and Reg. 21 (2) (n) of IRDA (TPA – Health Services) Regulation, 2001, and the provisions of Authority circular no. IRDA/NL/CIR/HLTH/207/09/2011 dated 06-09-2011.
7. Charge No. 7:
E-Meditek TPA, as per their web-site had offered servicing of CGHS Claims Audit.
Violation of Reg. 3 (2) of IRDA (TPA – Health Services) Regulation, 2001 to be read with Reg. 12 (e) of IRDA (Health Insurance) Regulation, 2013, Reg. 21 (2) (n) of IRDA (TPA – Health Services) Regulation, 2001 and the provisions of Authority circular no. IRDA/NL/CIR/HLTH/207/09/2011 dated 06-09-2011.
Reply of E-Meditek (for Charge Nos. 6 &7):
E-Meditek TPA submitted that; The said web page was last updated on September 4, 2011 and the servicing of Self-Funded Schemes of State Government / CGHS Claims Audit, was inadvertently remained on their web-site.
Decision (Charge No. 6 & 7):
E-Meditek TPA had given wrong / misleading information to general public through their web-site about TPA / Health Services. The rendering / offer to render / intent to render, services for Self-Funded Schemes of State Government and / or CGHS Claims Audit, is in contradiction of definitions of ‘Health Services’ and ‘TPA’ as defined in Reg. 2(d) and 2(e) of IRDA (TPA – Health Services) Regulation, 2001.
In view of (i) various violations of the Regulation / guidelines / circulars referred to at points 1 to 7 above and (ii) submission of incorrect information to the Authority as indicated at point no. 1 to 4 above, the Authority in exercise of powers vested under Section 102 of the Insurance Act, 1938, imposes a penalty of Rs. 5,00,000/- (Rs. Five lakhs only) on M/s. E-Meditek (TPA) Services Ltd.
The penalty amount shall be remitted within a period of 07 days from the date of receipt of this Order through a crossed demand draft drawn in favour of “Insurance Regulatory and Development Authority” and payable at Hyderabad, which may be sent to Ms. Yegna Priya Bharath, Joint Director (Health) at the Insurance Regulatory and Development Authority, 3rd Floor, Parisrama Bhavanam, Basheerbagh, Hyderabad 500 004.
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Place : Hyderabad
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M. Ramaprasad
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Date : 25-08-2014
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Member (Non-Life)
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