Page 10 - Insurance Times April 2023

The proposed amendments to these it will be introduced in the House or or a union territory that has to be nur-
two laws are part of the Centre and approved by Parliament", Panda said. tured by the same insurer.
IRDAI's overall efforts to enhance in-
The vehicle insurance issue was dis-
surance penetration, encourage prod- IRDAI asks insurer to talk cussed in the two-day conclave of in-
uct innovation and diversification so as dustry CEOs and the IRDAI which con-
to state govts to provide
to achieve the goal of 'insurance for all'
cluded recently. The regulator has
by 2047. mandatory cover for unin- worked out strategies to be imple-
With all industry and stakeholder feed- sured vehicles mented by the insurers to achieve full
back now received by the department, insurability of the nation by 2027 in
With almost 57 per cent of the vehicles
the DFS is understood to have for- some segments, including motor.
plying on Indian roads uninsured, IRDAI
warded the proposals to the Law Min-
has asked the general insurers to talk The new strategy will benefit state gov-
istry for further action before sending
to transport authorities of 28 states and ernments and general insurers as col-
the draft Bill to the Cabinet for ap-
eight union territories to provide man- lecting fines will be a huge source of
proval.
datory covers for the uninsured vehicles. income for state governments from the
"Entire exercise has been completed defaulting vehicle owners and insurers
The Insurance Information Bureau of
from DFS end. It is now for the process will get more business from insuring
India has reported that uninsured ve-
to move forward. No timeline can be such vehicles.
hicles still remain, an area of grave con-
given as the processes now are outside The new drive is expected to kick off in
cern in India with 57 per cent vehicles
the control of the DFS", sources said. a month's time and complete the pro-
on road being uninsured with 17 states
On the anvil are a slew of big reforms reporting more than 50 per cent unin- cess by FY2023-24, according to an offi-
including introduction of concept of sured vehicles. cial source.
"composite insurance license"; captive
According to Vahan, the tech platform
insurers; differential minimum capital Refuse fuel to uninsured
designed by the Ministry of Road Trans-
requirements after opening up registra- port and Highways, total vehicles reg- vehicles, suggest insurers
tion to various classes, sub classes and
istered till date were 33.68 crore. This The insurance industry has proposed
types of insurers; allowing services to
means over 19 crore vehicles on Indian that uninsured vehicles should not be
insurers that are incidental or related
roads are not insured. allowed to refuel at oil pumps, looking
to insurance business; and allowing in-
"Using Vahan and IIB data, the IRDAI to raise penetration of automobile in-
surers to distribute other financial prod-
has asked us to take up the defaulting surance, industry executives familiar
ucts as specified by IRDAI.
cases with the state governments for with the development said.
The latest proposals - which had been covering all vehicles,'' said the CEO of a The proposal was part of the presenta-
exposed by the Department of Finan- general insurance company. The IRDAI tion made during 'Bima Manthan',
cial Services in the Finance Ministry for
had earlier developed a scheme, where organised by insurance regulator, the
comments by December 15 - are in- each insurer has been assigned a state IRDAI, earlier this month.
tended to among other things facilitate
entry of more players in insurance mar- As part of new EoM norms, IRDAI to remove cap on
ket leading to economic growth and
commission to agents
employment generation and enabling
Insurance Regulatory and Development Authority of India (IRDAI) has removed
ease of doing business.
the cap on commission payments to agents, aggregators and brokers. Accord-
Asked about the status of the Insurance ing to new rules the earlier cap on commission payments is now replaced with
Amendment Bill, Debasish Panda, an overall cap on expenses of management of insurers.
Chairman, Insurance Regulatory & De-
“The IRDAI regulatory changes are good for customers and the insurance
velopment Authority of India (IRDAI),
industry, i.e., the revised Expenses of Management (EOM) and Commission
said that the date (December 15 last limits for the industry. We firmly believe that the shift from product level com-
year) by which public comments were missions to a company-wide limit of expenses, as proposed through the pro-
sought by government have now posed regulations, will ensure parity across varying business models while ren-
closed. "It (Bill) should be in the offing, dering greater flexibility in managing expenses for insurers," said Tapan Singhel,
but I cannot give a timeline as to when MD & CEO, Bajaj Allianz General Insurance.

10 April 2023 The Insurance Times