Insurer cannot refuse third party insurance: IRDAI
20 March 2015 12:10 AM GMT
The Insurance Regulatory and Development Authority of India (IRDAI) on Thursday said that no insurer can refuse to underwrite third party insurance.
"The regulations (of Insurance Laws (Amendment) Ordinance, 2014) stipulate just the minimum obligation of the insurer in respect of motor third party insurance business," IRDAI said in an
exposure draft.
"Notwithstanding this, at no instance the insurer shall refuse to underwrite the 'liability only' motor policy covering motor third party insurance risk coming to its office," it said.
This is a mandatory cover, along with the own damage cover, that a vehicle owner has to purchase.
This insurance cover is for any collateral damage to a third party, generally a human being, caused due to road accident.
The exposure draft said every insurer during a financial year should underwrite such minimum percentage of the 90 per cent of the overall motor third party insurance business premium of the industry for the immediate preceding financial year.
"The minimum percentage so decided should be equal to the simple average of insurer's share in total gross premium of the industry and that in total motor insurance premium of the industry, both in the immediate preceding financial year," it said.
Insurers are expected to submit their response on the exposure draft by March 25.
"The regulations (of Insurance Laws (Amendment) Ordinance, 2014) stipulate just the minimum obligation of the insurer in respect of motor third party insurance business," IRDAI said in an
exposure draft.
"Notwithstanding this, at no instance the insurer shall refuse to underwrite the 'liability only' motor policy covering motor third party insurance risk coming to its office," it said.
This is a mandatory cover, along with the own damage cover, that a vehicle owner has to purchase.
This insurance cover is for any collateral damage to a third party, generally a human being, caused due to road accident.
The exposure draft said every insurer during a financial year should underwrite such minimum percentage of the 90 per cent of the overall motor third party insurance business premium of the industry for the immediate preceding financial year.
"The minimum percentage so decided should be equal to the simple average of insurer's share in total gross premium of the industry and that in total motor insurance premium of the industry, both in the immediate preceding financial year," it said.
Insurers are expected to submit their response on the exposure draft by March 25.
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