Financial Daily from THE HINDU group of publications
Friday, Apr 26, 2002
Money & Banking - Regulatory Bodies & Rulings
New motor insurance tariffs by mid-May
Mr N. Rangachary
CHENNAI, April 25
THE Insurance Regulatory and Development Authority of India (IRDA) is likely to announce the rationalised tariff structure for motor vehicles insurance by the middle of May, the IRDA Chairman, Mr N. Rangachary, told Business Line.
The rationalised tariff structure, evolved by the Ansari Committee, was to have been made effective from April 1, but t IRDA deferred it in order to bring in some refinements.
It is understood that three major modifications have been made to the committee's recommendations. First, the rates of depreciation that the insurance companies would be allowed to deduct from the `Insured's declared value' have been raised.
Second, the committee had recommended dividing the country into four zones, with different tariff structures applicable for different zones. Now, the modification contemplated here is to have only two zones. In effect, this would bring down the tariff rates in the top zone (Chennai and New Delhi).
Finally, some concessions have been allowed in the premium for vehicles which have anti-theft devices.
IRDA is also close to notifying the IRDA (Protection of Policyholders' Interests) Regulations, 2002. These regulations deal with the disclosures that are to be made at the `point of sale', stipulates what should be stated in life and non-life insurance polices and claims procedure in respect of life and non-life policies.
Further, the regulations mandate a 15-day free look period for life policies, within which period, the insured can decide whether he wants to take the policy or not.
The regulations also stipulate the time limits within which the insurance companies must act, under various circumstances. For example, it says that the insurance companies shall furnish to the insured a copy of the insurance proposal form within 30 days of the acceptance of the proposal.
Another example: "Any queries or requirement of additional documents, to the extent possible, shall be raised all at once and not in a piece-meal manner, within a period of 15 days of the receipt of the claim".
The regulations also say that "the life insurance company shall pay interest on the claim amount at a rate of which is 2 per cent above the bank rate prevalent at the beginning of the financial year".
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