The Hindu Business Line : <I>`Don't refuse third party motor policies'</I>

The Insurance Regulatory and Development Authority (IRDA) has directed the general insurance companies not to refuse third party motor insurance policies.

In a directive to non-life insurers, the IRDA Chairman, Mr C.S. Rao, has warned the insurance companies that, "Failure to comply with this direction will be taken serious note of and action will be taken against the insurer concerned."

According to Mr Rao, IRDA has been receiving increasing number of complaints stating that insurers were either refusing third party insurance cover, especially for commercial motor vehicles, or adopting dilatory tactics such as asking for a great deal of unrelated information or insisting on holding the documents relating to the vehicles for several days, which were mainly designed to make it difficult for the vehicle-owner to get cover.

Stating that insurers were entitled to ask for information relevant for insurance of the vehicle such as a completed proposal form, copy of the RC book, or operating permit or fitness certificate, Mr Rao said, it would be considered a dilatory action if information not related to the insurance was asked for.

The IRDA Chairman has also directed the general insurers that, "Issue of the certificate of insurance should not take more than one working day after the proposal together with information is received and premium is collected."

Apart from public sector insurers, certain newly registered private sector insurance companies were also refusing to entertain requests from commercial vehicle owners for motor third party insurance.

No matrix loading

Further, observing that the circular of the Tariff Advisory Committee (TAC) on loading of motor third party premium issued on June 20, 2003 was being misapplied and causing harassment to the vehicle owners, IRDA has decided to suspend with immediate effect the application of the matrix.

According to Mr Rao, the TAC had earlier issued the matrix for loading in premium at the request of the transport operators to avoid arbitrary loading. However, keeping in view the undesirable practices caused by the matrix, IRDA has issued new directives superceding all earlier circulars issued by TAC and IRDA on the subject of loading of motor third party premium.

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