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Sunday, May 12, 2002

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Transporters allege tariff norms breach by insurers

Sarbajeet K. Sen


AMIDST confusion during the changeover to a new motor tariff structure, there are complaints against general insurance companies, which are allegedly overcharging clients even at the risk of violating the tariff orders of the Insurance Regulatory and Development Authority (IRDA).

During the past week, IRDA has heard out complaints by transporters alleging large-scale violation by insurance companies of the regulatory cap on loading (hike in premium during renewal) as well as several instances of denial of exclusive third party liability (TPL) cover to transporters.

The transporters have pointed out that even the normally pliant public sector companies are flouting IRDA's stipulations despite protests by the vehicle owners.

IRDA had recently told the insurance companies that they cannot deny exclusive third party cover if sought and also that third party tariff rates can be loaded up to a maximum of 100 per cent depending on individual clients' claims experience. Instances of violations were brought to the notice of IRDA in separate meetings during the week by two leading bodies representing transporters, the All India Motor Transport Congress (AIMTC) and the All India Confederation of Goods Vehicle Owners' Associations (ACOGOA).

When contacted by Business Line, an IRDA official confirmed that complaints had been received. He said that IRDA would look into the allegations and issue suitable instructions to the insurance companies soon. "If found true, we can order the companies to refund the excess amounts collected," the official said.

Transporters claim that the insurance companies are taking advantage of the loose wording of IRDA's clarification to flout the norms. "Terms such as `claims profile' and `adverse claims experience' have not been explained properly. IRDA should clearly explain these terms,'' Mr Chittaranjan Dass, Vice-President, ACOGOA, said.

Mr Dass said that the association had received several complaints of loading of premium by up to 400 per cent and discrimination in issuing TPL cover from Gujarat, Maharashtra, Karnataka and Tamil Nadu.

"IRDA is yet to assert itself. We have urged the regulator to issue a public notice of the directions given to the insurance companies and also make it available on its Web site,'' Mr Dass said.

AIMTC has also communicated to IRDA similar overcharging by the insurance companies. In his written communication to IRDA, Mr P. Sengodan, President, AIMTC, has pointed out that while insurers are denying third party cover in places such as Chennai, Vellore and Karur, they are also jacking up the renewal premium by 300 per cent or more.

"Third party insurance is a mandatory legal requirement. We have requested IRDA to again issue appropriate instructions to the insurance companies. We have also pointed out to them that the insurers cannot increase premium arbitrarily till the Ansari Committee's report is approved by IRDA," Mr J.M. Saksena, Secretary-General, AIMTC, said.

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