The Hindu Business Line : Motor insurance pool faces technical glitches

Sources said that the deregulation of the motor insurance tariffs was slated to take effect from the beginning of 2007. The IMIP is to be implemented along with the migration to market-based pricing.

With just days left before the migration comes into effect, non-life insurers are hard pressed for time. The private sector insurers have better equipped IT platforms and are in position to comply the deadline.

The public sector insurers are yet to complete networking of their offices and computerisation, the sources said.

Major issue

Insurers said that the major problem now being faced by them was in the transfer of all third party risks to the pool. The problem was technical, since all the insurers have agreed to comply with the Insurance Regulatory and Development Authority's directive for accepting and sharing third party risks out of the pool.

The pool is to be administered by the General Insurance Corporation of India, the national reinsurer. The technical problem, insurers said, is that the GIC is insisting that all the non-life insurers use its software.

The IMIP is a fully computerised system independent of the underwriting insurers system. The system would be Web-enabled (through the world wide web with users restricted only to non-life insurers).

The pool programme would control the underwriting of third party risks, claims processing and settlement procedures. A central database of all the vehicles insured for the pool account would also be created and updated on a daily basis.

This is to create a real time data on the underwriting insurer. The programme would also enable import of the data into individual members accounting system through file transfer on a daily basis or at periodic intervals.

Insurers said that while these processes were welcome, the software to be used would have to be made compatible to the existing programmes. This was particularly so in the case of public sector companies where large investments have already been made for computerisation projects.

"Given this large investment, making a new programme would only imply additional expenditure, the sources said. "This will lead to glitches and delay the implementation of the pool," the sources said.

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