With the growth of private voluntary insurance in the unregulated healthcare market, costs of healthcare are likely to go up. Managed care organisations in many developed countries play important role in containing costs. The Insurance Regulatory and Development Authority (IRDA) has paved the way for insurance intermediaries such as third part administrators (TPAs) which are going to play pivotal role in setting up managed care systems. TPAs have been set -up with the objective of ensuring better services to policyholders and mitigate some of the negative consequences of private health insurance. However, given the demand and supply side complexities of private health insurance and health care markets, insurance intermediaries face challenging tasks to achieve these objectives. Right in the early stages of its development IRDA has defined the role of TPAs to manage claims and reimbursements. Their role in controlling costs of health care and ensuring appropriate quality of care remains less defined.