With the enforcement of code of conducts, due to forthcoming general election, the insurance regulator IRDAI has deferred its annual revision of third party motor tariff, which is normally revised on Apr 1 of every year, for the time being.
The pricing of the third party motor tariff is the only segment which is still regulated by the IRDAI and a new rate is announced on Apr 1 of every year after consulting all the stake holders.
Yegnapriya Bharath, chief general manager(Non-Life), in a notification on Thursday, has said, “Insurers will continue to charge the rates currently being charged for Motor Third Party Liability Insurance Cover from 1st April, 2019 onwards until further orders.’’
The IRDAI, last had revised its motor TP premium on Apr 1, 2018 and for the last so many years, the insurance regulator has been revising the Motor TP premium upward in majority of the Motor TP segments.
Last year Irdai had reduced third party motor insurance rates for cars not excessing 1000 cc engine while raised for higher engine capacity vehicles. Also for bikes, the rates were raised.
However, the general insurers have always demanded higher premium in motor TP segment as it has been a hugely a loss making portfolio for them.
The average claim ratio for the general insurers in this portfolio is almost Rs 140 per cent which effectively means against a premium of Rs 100, the industry pays a claim of over Rs 140.