The Insurance Regulatory and Development Authority of India issued an order to revisit its 2015 regulation regarding the obligations of insurers to provide motor third-party liability insurance.
The regulation required insurers to underwrite a minimum percentage of insurance for motor third-party risks and also included a formula to calculate insurers' obligations under the regulation.
IRDAI formed a working group that will be in charge of reviewing the current framework and identifying areas of concern in the regulation. The review will also take note of new developments, including the Supreme Court of India's order in 2018 to mandate a long-term third-party liability cover of three years for new cars and five years for two-wheelers.
The working group will be comprised of IRDAI officials and executives from private and public insurers including United India Insurance Co. Ltd., National Insurance Co. Ltd. and ICICI Lombard General Insurance Co. Ltd.
The current formula used to calculate insurers' obligations takes into account factors including the company's total business and its share of motor insurance in the industry, The Hindu reported, citing sources.
Insurers demand that premiums for motor third-party liability insurance, which are not traditionally profitable for insurers, should be de-tariffed by IRDAI and that they should be allowed to decide the premium, according to the report.
