Insurance regulator IRDAI is proposing changes to rules that prescribe minimal rural, social sector and motor third-party obligations of insurers.
“A new strategy is necessary to achieve the objective of ‘Insurance For All’, the Insurance Regulatory and Development Authority of India (IRDAI) said, laying down new targets and changes to the specifications that are in force since 2016-17.
Placing Exposure Draft on IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, which is likely to replace the existing norms from April 1, in public domain for comments, the regulator said the changes proposed are part of the comprehensive review of regulations it has initiated. Enhancing ease of doing business levels as well as reducing the compliance burden for stakeholders while ensuring interests of policyholders are protected are drivers behind the review of the regulations, it said.
A fresh approach is needed, IRDAI said in a note on the proposed changes to rural, social sector and motor third-party obligations. It said among the major changes proposed are gram panchayat will be the unit for measurement of rural sector. For life insurers, the number of lives under individual policies and under group policies will be considered; while for general insurers, number of individual dwellings under fire segment and number of vehicles under motor insurance segment will be counted. For general and standalone health insurers, number of lives separately under health insurance and personal accident will be taken into consideration for achieving the obligations.
The proposals have been made following recommendations of the Regulations Review Committee of the insurance councils – IRDAI had sought their views. “The recommendations of the industry have been deliberated internally,” the regulator stated.
Fixing numerous annual targets for all times, basic and standalone well being insurers, the draft rules, on motor insurance coverage, stated protection of latest items carrying and passenger carrying autos won’t be counted in direction of Motor TP obligations. The obligation has to be met by renewal of the prevailing autos and uninsured autos which are insured offered the hole in insurance coverage is at the very least 30 days.
“Every new insurer granted certificate of registration will be required to underwrite a minimum of 10,000 goods-carrying and 10,000 passenger-carrying vehicles in the first financial year of operation. The number of vehicles to be covered by every insurer in first, second and third year shall be as prescribed from time to time. At no instance an insurer carrying on general insurance business shall refuse to underwrite the liability only motor policy covering motor TP insurance risk to any prospective policyholder,” the draft doc stated.
Insurance enterprise pertaining to authorities social safety schemes; insurance policies protecting lives issued to BPL, MNREGA and Ayushman Bharat cardholders; micro insurance coverage insurance policies in addition to these to be bought via Bima Vahaks, the ladies centric insurance coverage distribution channel proposed by IRDAI, can be counted in direction of the agricultural and social obligations.
