Monday, 6 March 2017

Irdai proposes 50 per cent rise in motor premium

Irdai proposes 50 per cent rise in motor premium

NEW DELHI: The Insurance Regulatory and Development Authority (Irdai) has proposed a 50 per cent hike in the insurance premium for mid-segment cars (1,000 - 1,500 cc), sports utility(उपयोगिता) vehicles (SUVs), sports bikes and super bikes (more than 350 cc), while maintaining a status quo for small cars (up to 1,000 cc) and two-wheelers, which will become effective on April 1, 2017. The regulator has also proposed to increase premium on e-rickshaws to Rs 1,125, while suggesting a 25 per cent discount in the premium for vintage cars. Third-party insurance is a legal requirement in India for all owners.  
Irdai undertakes annual revision of third-party insurance premium based on cost inflation and claim statistics. Data from Irdai show that premiums during the past five years have been raised. On Sunday, Irdai released the exposure (अनावरण) draft on premium rates for motor third-party insurance covers for FY18 and has invited stake holders’ comments till March 18.

“The proposal to increase premium again this year is to be seen on the back of the huge(विशाल) losses reported by auto insurance companies and also the rise of 5.57 per cent in the cost inflation index and data from the Insurance Information Bureau,” said H C Gupta, senior officer, National Insurance Corporation.

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