The Insurance Regulatory and Development Authority of India (IRDAI) is planning to change norms on rural, social sector and motor third party obligations for the insurers.

In an Exposure Draft on IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, the insurance regulator proposed to keep gram panchayat as the unit for measurement of rural sector obligations.

For life insurers, number of lives under individual policies and under group policies will be considered while for general insurers, number of individual dwellings under fire segment and number of vehicles under motor insurance segment will be counted

As per the proposed norms, the minimum number of lives to be covered by all life insurers in all gram panchayats in the country shall be 30 per cent in each gram panchayat, subject to a minimum of 25,000 gram panchayats as driven by the lead insurer in the first year.

Objective

This increases to 40 per cent lives, subject to a minimum 50,000 gram panchayats and 50 per cent lives, subject to a minimum of 75,000 gram panchayats in year 2 and 3 respectively.

For general Insurance, the minimum number of dwellings under fire insurance and vehicles under Motor (Comprehensive and TP) to be covered by all general insurers in all gram panchayats in the country will be 30 per cent in each gram panchayat, subject to a minimum of 25,000 gram panchayats as driven by lead insurer in the first year.

Also read: IRDAI plans to remove prior approval norms for listing of shares of insurers

Explaining the rationale behind proposed changes, IRDAI said the aim is to “enhance the ease of doing business and also reduce compliance burden for stakeholders while also ensuring that interests of policyholders continue to be protected”. “It was viewed that a new strategy is necessary to achieve the objective of ‘Insurance For All’ by 2047,’’ the regulator said.

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