Motor third party insurance premium rates will go up over 20 per cent from April 1.
The Insurance Regulatory and Development Authority (IRDA) on Tuesday notified the revised rates for various categories of vehicles.
The rates were revised by annually adjusting them by a special formula announced last year.
The formula takes into account the cost inflation index and other parameters such as claim amounts, frequency and expenses involved in servicing the third party business. ' “Insurers are advised to be mindful of the concerns expressed by the vehicle-owners about the rates and availability of insurance,’’ T.S. Vijayan, Chairman, IRDA, said in an order. As the motor third party insurance is mandatory, the authority would treat any complaint of non-availability of insurance or method to deny/delay the provision of cover ‘seriously’, he added.
Last month, IRDA notified an exposure draft with the proposed hike in premiums. It received responses, from 67 stakeholders, which were examined.
Though the draft proposed steep hike in many cases, the actual hike notified today is much lower. “Looking into sudden and adverse impact on the policyholders, and after considering the comments on the exposure draft, the authority decided to moderate the rates,’’ Vijayan said.
Reforms move
IRDA had brought in significant reforms in the motor third party insurance segment by disbanding motor third party pool from April 1, 2012 and setting up a decline pool in its place in view of the mounting losses for the general insurers.
This will be the first year review of premium rates in the new set-up.