The SAT(Securities Appellate Tribunal) has set aside the insurance regulator IRDAI’s order suspending the license of Delhi based E-Meditek Insurance TPA(Third Party Administrator) without notice and has asked the insurance regulator to pass a new order after providing an “opportunity of hearing’’ to the third party administrator as expeditiously as possible.
The SAT is a statutory body for hearing and dispose of appeals against orders passed by the capital market regulator Sebi, the insurance regulator IRDAI and pension fund regulator, PFRDA..
E-Meditek Insurance TPA is one of the large health insurance intermediaries in the country.
After E-Meditek Insurance TPA had gone on an appeal to SAT against IRDAI order, the Mumbai based appellate authority on Friday said,“We stay the operation of the impugned order forthwith with a direction to the member (non-life) to give an opportunity of hearing to the appellant as expeditiously as possible and pass such order as he deems fit,’’ said a SAT order signed by Justice J. P. Devadhar, Presiding Officer and Dr. C.K.G. Nair, member.
Reacting tpo the SAT's order on E-Meditek Insurance TP, the IRDA sources said the regulator has got two options- either abide by what SAT's order has instructed or go on appeal against it to the Supreme Court.
Earlier, on the basis of a whistle blower complaint, the insurance regulator IRDAI had suspended the certificate of registration of a Third Party Administrator (TPA) without notice.with immediate effect. PJ Joseph, member(Non-lIfe) while issuing order of suspension had mentioned that the violations observed in the inspection of the IRDAI against the E-Meditek TPA are of such serious nature that it is detrimental to the interests of policy holders and the insurers and allowing E-Meditek to continue their activities as TPA shall have adverse impact on the policyholders and insurers.
However, SAT order has countered IRDA’s stand by saying,“ on perusal of the impugned order it is seen that the officials of IRDAI inspected the books of account between13th to 17th November, 2017 whereas, the ex-parte order is passed after four months delay on 20th March, 2018. Very fact that IRDAI could wait for four months after conducting inspection clearly shows that immediate action as contemplated under Regulation 16(3) of the 2016 Regulations was not warranted in the present case.’’
“It is the case of the appellant that in the present case the whistleblower would be none other than Mr. Sunil Sharma who was Vice President (Claims) against whom and several others the appellant has filed criminal case for defrauding the company even before the inspection by IRDAI commenced. In these circumstances, assuming that there are some inconsistencies/irregularities noticed in the accounts maintained by the appellant during the course of inspection the proper course for IRDAI is to give an opportunity of hearing and pass appropriate order thereon’’ said SAT Order.
E-Meditek Insurance TPA had argued that IRDAI's action of suspending its license without notice was not justified as it didn't conform to the regulations as mentioned the IRDA Act,
E-Meditek Insurance TPA is operations since 21 Mar,2002. According to its websitethe company has over 7 million registered members and relationship with 24 insurers, 10000+ health providers and host of other partners and international alliances..
The Delhi based TPA comapny has over Rs 1000 crore business and is one of top ten TPAs in the country.