IRDAI Reduces Third Party Insurance Rates

The Insurance Regulatory and Development Authority (IRDAI) has on Monday reduced premium rates of motor third party insurance for some categories of vehicles for 2017-18. According to a notification issued by the regulator, the new notification will override an earlier order issued by it on March 28, 2017 which notified rates with effect from April 1, 2017.

"The new premium schedule shall apply retrospectively with effect from April 1, 2017,’’ Yegnapriya Bharath, Chief General Manager- Non-Life, IRDAI said in an order. As per the revised rates, significant reduction is in the goods carrying vehicles – Public carriers (other than three wheelers). According to IRDAI’s order dated March 28, 2017, the premium for goods carrying vehicles went up by over 40% with varying rates depending on their load.

For instance, the premium that was earlier in the range of Rs15,365- Rs. 24,708 had gone up to Rs. 23,047-Rs 37,062. However, the revised rates as per the latest order bring down the range of premium for different categories of vehicles from Rs. 21,511 – Rs. 36,120 to Rs. 19,667-Rs 33,024.

It may be recalled that truckers in the south went on a strike for about 10 days from April 1, protesting against the steep hike in the mandatory motor third party rates and also held discussions with the regulator seeking the reduction in rates.

Similarly, the premium has also been reduced for private cars exceeding 1000 cc and 1500 cc, agricultural tractors, special types of vehicles and two-wheelers. The insurers will now have to return the additional amount collected for policies bought from April 1 to April 17, 2017on the basis of previous notification to align them with revised rates, said a IRDAI official.