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The protest against the steep hike in motor third-party insurance premium for goods carrying vehicles is set to intensify.
Irked by the refusal of the Insurance Regulatory and Development Authority of India (IRDAI) to roll back the hike in premium even after six days of the truckers’ strike in South India, transporters are gearing up for a nationwide strike from April 8.
“The hike in premium has been decided on the basis of a certain well-defined formula after proposing the same in an exposure draft before notifying the final rates. The regulator is not willing to roll back the hike now,” a senior IRDAI official told BusinessLine here.
The representatives of the All India Motor Transport Congress (AIMTC), South India Motor Transport Association (SIMTA) and All India Confederation of Goods Carrying Vehicle Owners Association had met the IRDAI team on Monday to seek a reduction in premium, but in vain.
As there are many stakeholders in the mandatory motor third-party cover, a decision on roll-back cannot be forced by strikes. “This has been conveyed to the transporters,” the official said.
According to the new rates which came into effect from April 1, the premium for goods carrying vehicles went up by over 40 per cent with varying rates depending on their load. For instance, the premium that was earlier in the range of ₹15,365-24,708 had gone up to ₹23,047-37,062.
Why the hike According to Puneet Sahni, Head — Product Development, SBI General Insurance, hike in motor third-party cover premium was necessary due to a variety of factors.
“While it is true that the hike is substantial, it is unavoidable as the category has a claims ratio of 150 per cent. Even after the hike, the losses will be around 100 per cent,” he told BusinessLine.
Further, there has been an annual increase of 14-15 per cent in the awards being given by the motor accident tribunal, which is causing higher payouts from the insurers. Protests over hike in third-party premium rates are not new. Three years ago, there were similar protests by truckers in Chennai and Coimbatore when the premium rates were proposed to be hiked. But now that the new premium rates have already come into effect, it is unlikely the IRDAI will heed to pressure, say experts.
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