There is a bad news for vehicle owners. The Insurance Regulatory Development Authority (IRDA) has decided to review the premium rates for Motor Third Party Insurance Cover. An order in this regard has already been issued by IRDA on March 28, 2016.
The worst hit are owners of small and medium segment cars who own vehicle of less than 1500 cc. The proposed third party premium hike in this segment is 40 percent. The cars above 1500 cc would have to shell down 25 percent extra premium. The owners of vehicles with upto 1000 cc would have to shell down Rs. 2055 against existing Rs. 1468. Similarly for cars above 1000 cc upto 1500 cc, the new premium rates are Rs. 2237 against existing Rs. 1598.
In case of two wheelers upto 350 cc, 15 to 25 percent hike has been proposed. However, those having two wheelers of above 350 cc, would pay 10 percent less premium than earlier.
In case of goods carrying vehicle also, the rates are unchanged for vehicles having carrying capacity upto 12000 kgs but for vehicles above 12000 kgs, the hike is 15 to 30 percent. In the category of vehicles with carrying capacity of 12000 to 20000 kgs, the new premium rates are Rs. 22577 against existing Rs. 19632.
The IRDA cautioned the insurance companies against refusal of accepting third party insurance cover. The IRDA order stated “Considering the mandatory nature of motor third party insurance, insurers are advised to ensure that motor third party insurance is made available at their underwriting offices and through all available channels of distribution. The Authority will treat any complaint of non-availability of insurance or use of methods to deny or delay the client seeking the insurance cover, seriously.”
The IRDA order further stated that insurers were not permitted to cancel the current insurance policies and issue fresh policies to effect new premium rates.
The members of All India Motor Transport Congress (AIMTC) have condemned the hike and have demanded an immediate rollback.
A release of AIMTC stated that a meeting was held with Chairman – IRDA on March 21, 2016 against annual increase of Third Party Premium at the behest of insurance companies.
During the meeting it was appreciated by the Chairman that the members of the AIMTC need accurate data used to arrive at the percentage increase of TPP across various categories and illustrations thereof. Inspite of repeated emails the officials choose to remain silent on the same and instead clamoured about the working methodology only. It was also transpired in the meeting held with the Chairman that TPP premium for Commercial Vehicles (Cargo & Passenger) will not be increased without final meeting with the AIMTC and justifying the increase with transparent data.
It was very surprising and appalling to note that in a haste to notify the hike the IRDA officials have issued the notification without honoring the words given by its Chairman, AIMTC release stated.