QUESTION NO 707

NOTICE PAPER 418 OF 2021

FOR WRITTEN ANSWER

Date: For Parliament Sitting on 10 May 2021

Name and Constituency of Member of Parliament

Dr Tan Yia Swam, NMP

Question:

To ask the Prime Minister (a) whether there are any regulatory guidelines in classifying third party administrator costs in the financial returns lodged by accident and health insurance companies with MAS; and (b) if so, whether such costs are included in the returns as management expenses or gross claims settled.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1.     Some insurers offering health insurance appoint third party administrators (“TPAs”) to undertake a variety of claims administration services on their behalf.

2.     In their statutory submissions to MAS, insurers are required to classify TPA-related expenses directly related to claims paid, such as claims administration expenses incurred for each processed claim, as part of gross claims settled. They must classify other TPA-related expenses, such as ongoing panel management fees, as part of management expenses. External auditors check whether these requirements are met, and MAS will take action on any non-compliance.

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