A panel of the Insurance Regulatory and Development Authority (Irda) has recommended setting up a self-regulatory body for health insurance, called Health Insurance Development Council.

"Irda has been in favour of creating a separate regulatory body for health insurance. The health insurance market has been booming and there are issues that need to be addressed. This council will be the first step towards that," an Irda official said.

The 14-member panel, headed by S B Mathur, secretary general of Life Insurance Council, set up for evaluation the performance of third party administrators (TPAs), has recommended setting up of the council as one of the most critical requirements for the industry.

"Creation of a common health insurance industry body is one of the most relevant and critical recommendations of this committee. It will be required for the implementation of many other recommendations of the committee as well," the report said.

Key responsibilities of the body will be to bring in standardisation of procedures and data management. The body will also be responsible for enforcing regulations for tackling fraudulent claims and misuse of health insurance. It will be responsible for taking steps to bring about uniformity in the processes of handling pre-authorisation and health claims.

The idea is to ensure that customers are provided with a health insurance cover with high service standards. The council will also help the industry formulate common forms, processes and definitions and monitor compliance to ethical and efficiency standards.

"This body could also be a mechanism to resolve the differences between insurers and TPAs. It will create a common platform for interaction with other stakeholders that are part of the health insurance system, including hospitals," the report said.

The panel said the body could be set up with representations of life insurers, non-life insurers, TPAs and hospitals, collectively, servicing the health insurance business. Apart from creating a separate body, the committee has also recommended that TPAs should be provided with adequate working capital and that the paid-up capital for a TPA start-up should be raised to Rs 2 crore.

To ensure best practices, the committee suggested adopting common wording of MoUs with hospitals, standard list of documents to be enclosed with the claim form and standard billing formats.