The Insurance Regulatory and Development Authority of India (IRDAI) may announce the premium rates for motor third-party cover from June, according to sources close to the development.

Last week, in a surprise move, the IRDAI extended the validity of the premium rates set for 2018-19.

“The IRDAI, hereby, extends the validity of premium rates set out in the aforementioned order beyond March 31, 2019, until further notice. In other words, insurers shall continue to charge the rates currently being charged for motor third-party liability insurance cover from April 1, 2019, onwards until further order,” it had said.

The move has surprised the industry, which has been expecting at least a 10 per cent hike in rates, in line with rising costs, though most general insurers are keeping silent on the issue.

“It is likely that the IRDAI requires more time to study the report on third-party motor costs for 2019-20, which was submitted some time back.

“Further, with general elections around the corner, it could be possible that it has chosen to hold back the new rates until June,” said a person familiar with the development. An executive with a general insurance company said that unlike in previous years, this year, the regulator has not shared the draft report on the new rates.

“There is an expectation that the new rates will be put into effect from June 1, as many companies are finding it difficult to break-even at the current rates,” he said.

Third-party insurance policies are mandatory by law and account for nearly 40 per cent of the general insurance market.

Last year, IRDAI had reduced third-party premium for small cars not exceeding 1,000cc, although it had increased rates for bikes with higher engine capacity.

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