• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

R.Y. Narayanan

COIMBATORE, May 28

THE All-India Motor Transport Congress (AIMTC) has decried the insurance companies' decision to hike the premium for vehicles even as the recommendations of a committee headed by the General Insurance Corporation (GIC) is yet to be implemented.

AIMTC will be left with no option but to launch an agitation if its plea goes unheeded, said Mr P. Sengodan, President, AIMTC, which is the apex organisation of motor transport operators across the country.

He dubbed the decision of the insurance companies as "unilateral" since the Government was yet to take a decision on the report of the Tariff Advisory Committee (TAC), constituted by the Insurance Regulatory and Development Authority (IRDA) to study the issue of insurance premium following the opening up of the sector.

The hike in insurance premium comes into effect from June 1.

He said the move that comes at a time when the transport sector was facing recession would only cast an additional burden on it. Moreover, in some places insurance coverage has been denied for older models, he added.

The AIMTC President said his organisation had launched a strike against a similar move in 1998 and it was at the intervention of the Union Government that the decision had been kept in abeyance.

A committee, constituted under the GIC, recommended in October 1999 that as in the case of train and air accidents where a fixed sum was paid as third-party claim, in motor accidents too, a fixed amount should be paid to the victims. Mr Sengodan said if this was followed, then the loss suffered by insurance companies due to third-party claims could be avoided. The insurance companies also need not raise the premium amount to offset any loss due to such claims. The AIMTC has been pressing the Government to implement this recommendation but the Government was yet to do it.

The IRDA also constituted a TAC to study the insurance premium issue in which representation was given to the transport industry also. This committee met five times and has given its report to the Government.

But even though the Union Government's decision on the report was pending, the insurance companies have unilaterally and wrongly decided to hike the premium, he said.

He added the AIMTC representatives recently met IRDA officials and urged them that only after the committee's recommendations were implemented, should the vehicle insurance premium be increased in line with the TAC decision.

It had also voiced its protest against refusal of insurance cover to older vehicles and denial of third party insurance policy.

Send this article to Friends by E-Mail

Stories in this Section
IOC may go it alone on TN pipeline project

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line