Page 9 - Insurance Times April 2019

18% GST on premium is IRDAI rules out dismantling of third party motor tariff
IRDAI has ruled out dismantling the third party motor tariff. IRDAI had, way back
brutal: Nilesh Sathe,
in 2007, deregulated the pricing of the entire range
IRDAI member of insurance products except the third party motor
The levying of an 18% tax on insur- premium. Every year by March 1, the IRDAI unveils
ance pre- the new third party motor pricing for the year.
miums is When asked about any possibility of removing the
detrimen- third party motor segment from tariff regime, S C
tal to im- Khuntia, chairman, IRDAI, said, "Often general insurers complain us that tariff
p r oving was not adequate and they are bleeding due to the loss making portfolio. How-
the pen- ever, if it is detariffed, a cut- throat competition will begin." "We are looking at
etration of various options on the issue," he said.
insurance
in the Premium Rates for Motor Third Party Liability insurance
coun tr y remains unchanged
and should be rolled back, said
Cover Reference is drawn to Order of the lnsurance Regulatory and Develop-
Nilesh Sathe, member(life) IRDAI.
ment Authority of lndia (lRDAl) bearing Ref:IRDA/NL/
"With low social security provisions NTFN/MOTP/053t03t2018 dated 28th March, 201 8 on
happening or possible in India, Premium Rates for Motor Third Party Liability
charging premiums at 18 per cent lnsurance Cover for FY 2018-19.
GST (goods and services tax) is bru-
It is hereby notified that by virtue of powers vested
tal," Sathe said in his keynote ad- in the Authority under Section 14 (2) (l of IRDA Act,
dress. "Do you think increasing pen-
1999, the IRDAI hereby extends the validity of premium rates set out in the
etration in India is the responsibility
aforementioned Order beyond 31st March, 2019, until further notice. ln other
of IRDAI or insurance companies words, insurers shall continue to charge the rates currently being charged for
only? It is the responsibility of every Motor Third Party Liability lnsurance Cover from lst April, 2019 onwards until
stakeholder, including the govern- further orders.
ment," he said, adding that IRDAI
had informed the government that IRDAI suggests changes in norms for Insurance surveyors
most other countries, including de- A Working Group of the IRDAI has suggested modifications in the norms for
veloped markets, "do not charge any
surveyors and loss assessors for speedy settlement of claims.
tax on insurance premiums".
On timelines for submission of survey report, the panel said
The government must also allow that within seven working days of the claim intimation, "inform
separate tax breaks for pension insurer/claimant of the essential documents and other require-
products of insurance companies, in ments that the claimant should submit in support of the claim."
line with Rs. 50,000 separate head Where documents are available in public domain or with a
made for the new pension scheme, public authority, the surveyor should obtain them, it added.
he said. Sathe encouraged e-com-
The survey should start immediately and in an interim report the physical de-
merce firms to enter the insurance
sector, saying it would improve the tails of the loss should be submitted to the insurer within 15 days from the date
of first visit. "Submit final survey report to the insurer within 30 working days
awareness and penetration of insur-
from date of submission of last relevant and necessary document by the in-
ance products.
sured," the group said. The panel suggested that the requirement of practical
"Let the Amazons and the Flipkarts training may be done away with as it does not seem to serve the purpose that
come into insurance. I am sure there was envisaged.
will be more and more people who
"It is recommended that instead of training requirements, examination of high
will appreciate and buy insurance as quality based on relevant syllabus with proper testing that has a quantitative
its penetration and density is low...
and practical orientation that will ensure that surveyors have the required
There is a lot of market," he said. wherewithal to carry out survey and loss assessment," the report said.
The Insurance Times, April 2019 9