Page 158 - Motor Insurance Ebook IC 72

The Insurance Times

Q 1. Discuss the affects of detariffing on Motor
insurance and narrate the "File & Use" guidelines
introduced by the Regulator:

Ans: Motor vehicle insurance in India was governed by a
Tariff till Dec. 2006. From Jan 2007 insurers were given
freedom to quote individual rates for the motor products
excluding Third party insurance. The Third Party
premium is being regulated by the IRDA, All other terms
conditions and rules of the erstwhile tariff were required
to be continued.

However, the rates they proposed to quote for Own
Damage section were required to be filed with the
regulator before introduction. The third party premium
is being regulated by the IRDA for the reason that being
a loss making portfolio on the one hand and being
compulsory insurance as per law on the other, freeing
the pricing would have led to spiraling of price to the
detriment of affordability of the policyholder.

The IRDA subsequently permitted insurers to file of
add-on covers to the main product from 1st April 2009
with the following caveats:

1 Insurers are permitted to the file variations in
deductibles from those prescribed under the erstwhile
fire, engineering IAR and motor OD tariffs subject

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