The Hindu : IRDA warns general insurers for breaching norms

Online edition of India's National Newspaper
Thursday, Oct 10, 2002

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IRDA warns general insurers for breaching norms

By Our Special Correspondent

NEW DELHI OCT. 9. The Insurance Regulatory and Development Authority (IRDA) has warned general insurers of stringent action if they breach the norms by hiking motor insurance premium by over 100 per cent.

In an internal communique to heads of general insurance companies, the IRDA Chairman, N. Rangachary, has said that the chief executives of companies had already been requested to fall in line with the directives issued by the Authority and the Tariff Advisory Committee (TAC).

"Any infringement will result in action being taken against the insurers,'' Mr. Rangachary has said. The IRDA has lately been receiving complaints of breaches in motor tariff charges by insurers, some of whom are charging 300 to 400 per cent higher tariff .

According to the new directive of the IRDA, general insurance companies are allowed to charge an additional tariff in excess of the basic tariff only on a case-to-case basis and after studying the individual claim profile of the insured vehicle.

The IRDA also gave the option to insurers for fixing a maximum 100 per cent in the first year depending on the performance of the insured and increase it by another 100 per cent in the second year in case the bad performance continues. However, the All-India Confederation of Goods Vehicle Owners' Association has alleged that a public sector insurer was charging 100 per cent higher tariff across the board. The IRDA too has obtained reports of 300-400 per cent hike in premium.

"Breaches of tariff in terms of instructions issued have been reaching the IRDA and the TAC," Mr. Rangachary has said

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