Page 303 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

The more profitable private car and two wheeler
business was targeted by the private insurers and the
commercial vehicles was left to the public sector
insurers, who could not refuse to insure against TP risks
as they were mandated to insure in terms of the MV
Act. They thus opposed detariffing.

Motor TP outstanding liabilities were bleeding the
insurance industry and the fear that de-tariffing would
result in public sector insurers going under due to this
was also a grave possibility.

Arising out of the need to see the development of the
insurance market in India and ensuring that policyholder
rights were not compromised by such developments,
the IRDA mandated the creation of a Motor TP Pool in
December 2006. The pool is applicable only for
Commercial Vehicles wherein an arrangement is made
to share losses in proportion to the market share of the
insurers.

Q. 2. Describe the Pooling Procedure? Also explain the
Ans. IRDA directives of participation in Motor TP Pool.
Participation in pooling arrangement: Every insurer
registered to carry on general insurance business
(including motor insurance business) or general
reinsurance business shall automatically participate

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