India’s insurance regulator proposes new limits on motor payouts
India’s insurance regulator, IRDAI, has proposed capping remuneration for new-vehicle motor insurance at zero for third-party premiums and 5% for own-damage and related covers. The proposal is presented as a way to reduce costs and widen consumer choice, though the supplied material gives no implementation timetable.
The Insurance Regulatory and Development Authority of India has proposed new limits on remuneration for motor insurance sold with new vehicles, according to NDTV. Under the proposal, remuneration would be capped at nil for the third-party premium. For own-damage insurance and related covers, the proposed cap would be 5%.
The measure is presented as an attempt to reduce costs for vehicle owners and provide them with more choices when purchasing motor insurance. The available material does not explain how the proposed limits would affect insurers, vehicle dealers or insurance intermediaries. It also does not say whether the proposal has been formally adopted, when it would take effect or whether a consultation process is under way.
No response from insurers, dealers or consumer groups is included. The proposal would distinguish between the third-party portion of motor insurance and own-damage or associated covers. Third-party remuneration would not be allowed under the stated plan, while remuneration for the other specified covers would be limited to 5%.
Further details of the proposed rules, including enforcement arrangements and their effect on existing policies, were not provided in the supplied source material.
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