The issuance of the licensing requirements for third party administrators (TPAs) represents an important move to enhance regulation of the health insurance sector in Oman, says the executive president of the Capital Market Authority (CMA), Abdullah Bin Salem Al Salmi.
TPAs play an important role in the ecosystem, by providing outsourced post-sales administrative services to insurance companies and by facilitating cost effective claims operations with high efficiency and quality, while ensuring a seamless consumer experience to policyholders, who seek covered treatment from health service providers.
Mr Al Salmi states that the issuance of regulations for TPA business will add to the readiness of the infrastructure of the Omani insurance industry, improve the quality of services related to health insurance and complete the legislative and regulatory framework of the health insurance scheme for private sector employees, expatriates residing in Oman and visitors.
He adds that the issuance of the regulations is in response to the growth in the health insurance market in the Sultanate. In 2019, health insurance topped insurance classes, contributing 35% of the total insurance market.
The health insurance sector witnessed considerable growth in the past five years of more than 25% a year, and the CMA expects that health insurance products will see more demand, thanks to increased public awareness of the role of insurance and the government's plan for compulsory health cover for private sector employees.
Mr Al Salmi outlines the key features of the regulations, including requirements for licensing of TPAs.
The regulations allow licensees to provide services for more than one insurance company at any time and outlines the framework for contracting health service providers. The requirements take into consideration investment by nationals and extent of Omanisation. Furthermore, the regulations promote workforce development through structured training and development.
TPAs will need to handle the required state-of-the-art technology to improve internal systems that will be integrated with the health insurance portal of the CMA, while ensuring privacy and security of data and information. The CMA's Dhamani portal will be the centralised health insurance exchange platform that will integrate and link regulators, insurers, TPAs, private health institutions, policyholders and all other stakeholders to seamlessly interact and conduct all transactions electronically, thereby improving efficiency and reducing administrative overhead costs.
TPA licensees are required to comply with regulatory procedures set out by the CMA such as adhering to the minimum capital requirement which is OMR200,000 ($520,000) and aligning their services with minimum overlap with the functions of brokers and agents. The TPAs are required to have a full-time manager who has to have a university degree in medicine, healthcare or insurance with no less than five years of experience in addition to having a full-time doctor with no less than five years of experience.
The regulations were issued after due consultation with stakeholders in the market including government entities, insurance companies and private health institutions.