The Insurance Regulatory and Development Authority on Wednesday warned third-party administrators (TPAs) on not settling health insurance claims in time and said rules will be tightened to ensure prompt payment.

"We can take action against those TPAs and the insurers can terminate them (in case they break the rules)," IRDA Chairman C S Rao said on the sidelines of the global

conference of actuaries, organised by Ficci in New Delhi.

Asked whether IRDA would amend rules to ensure prompt settlement, Rao said: "Definitely, we will tighten the rules."

"The onus for settling claims is on insurers. If it is not done by TPAs, it has to be settled by the insurers," he said, adding that the regulator was discussing with insurers and TPAs the growing incidents of default in settling health insurance claims in the country.

The IRDA chief admitted that insurers and TPAs were facing 'initial hiccups' as the volume of business grew more than they had expected.

Many of them were increasing their investments to meet the growing demands, he said.

IRDA was also in the process of building a database for health insurance to assess the premium and settlement ratios.

It would be ready in six months.