Insurance regulator IRDAI has constituted a 16-member committee to examine motor third party insurance pricing aspects and make recommendations on the premium rates for 2019-20.
This is for the first time the Insurance Regulatory and Development Authority of India has formed such a committee, an official familiar with the development said. Apart from examining the third party cover pricing aspects, including data related ones, the committee has been tasked to revisit the classification of vehicles, in view of the development in the industry. Its term will be till December 31, IRDAI said in an order constituting the committee, recently.
The composition of the committee, with IRDAI Member - Non Life P.J. Joseph as chairman, is diverse from a stakeholder perspective. Besides two others from the authority, the panel will have a senior official each from the Centre’s Department of Financial Services as well as the Ministry of Road Transport and Highways as members.
Five of the members have been drawn from general insurance companies.
Figuring in the committee, on behalf of users, are All India Motor Transport Congress president S.K. Mittal (as main member) and AIMTC vice president Mukesh Dave (as alternate member), additional secretary of Bus Operators Confederation of India D.R. Dharmaraj Bala, and president of the Federation of India Automobile Associations Nitin G. Dossa.
Others on the committee are Chief Operating officer of ‘Consumer Voice’ S.P. Chakraborty, Head-Technical of General Insurance Council Arvind Shenoy and Motor Vertical In-charge of Insurance Information Bureau of India (IIBI) Jacob Thomas.
The regulator’s decision to form the committee comes in the backdrop of a cargo transporters strike to highlight various demands, one of which is for a roll-back in the third party premium hike. As per the new rates notified by IRDAI in March for 2018-19, the increase in the premium has been over 25% for certain category of goods carrying public carriers (other than three wheelers).
IRDAI, however, was unlikely to discontinue the existing practice of arriving at the premium rates based on data provided by the IIBI and those pertaining to the claims paid and gross written premiums. The committee’s recommendations, sources said, was expected to provide newer insights while deciding on the premium rates.
On classification of vehicles as a terms of reference, sources said the committee would look at the categorisation of cargo vehicles, in terms of their GVW rating, to explore the possibility of merging certain categories.