General Insurers can Sell Auto Cover via Dealers

In a bid to offer more choices to customers, regulator Irdai (Insurance Regulatory and Development Authority) has allowed all general insurers to sell motor cover policies through auto dealer networks by offering differential pricing.

The move, under the new guidelines will offer customers choices in terms of pricing apart from increased competition among insurers to offer best price to customers.

Earlier, it was mandatory for customers to buy an auto insurance from an insurer with whom the auto dealer already has an exclusive arrangement. Also, insurers were not allowed to offer differential pricing which would reward good customers and ensure higher premium for bad customers.

An August 31 Irdai circular recognised the role of auto dealers in distributing and servicing of motor policies along with a regulatory oversight over their activities connected to insurance.