Irdai to review Motor Third Party obligations on insurers
New Delhi: A working group set up by insurance regulator Irdai will look at reviewing the regulations on formulae of current Motor Third Party obligations.
“The working group to revisit the IRDAI (Motor Third Party Obligation in respect of insurers), Regulations 2015,” the Irdai said.
Sec 32D of the Insurance Act, 1938 requires every insurer to underwrite a minimum percentage of insurance business in third party risks of motor vehicles as specified by the Regulations.
The Authority, vide Irdai (Obligations of insurers in respect of Motor Third Party) Regulations, 2015, June, has specified a formula for calculating Motor Third Party Obligations.
The demand of insurers has been that the IRDAI should de-tariff TP premium or allowing them to decide the premium. The demand of the insurers comes as they feel motor TP not being profitable for the companies.
Considering that around three years have elapsed from the issuance of the Regulation, and also in the light of the recent Supreme Court judgement on issuance of Long Term Motor Third Party (TP) policies as well as concerns raised by various insurers on the formula used for calculation of Motor TP Obligation, a review of the Regulations may be required, it said.
The Terms of Reference of the working group are to review the current framework and identify areas of difficulty/concerns including those relating to the formula in vogue and also the framework in light of new developments such as long-term TP products.
The group will make recommendations regarding modifications that may be required to the current framework.
It will submit a report within 12 weeks from the date of issuance of the order.