Page 309 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

Insurance Corporation is managing the funds received
from the insurers as their share of the premium to the
pool.

The administration of the underwriting and the claim
are managed by the respective insurers at all stages
including settlement. On settlement they are submitting
the details of the claims settled and recovering their share
of payment from the pool.

As the time line between claims reported and settled in
the case of TP Liability averages 5-7 years, a correct
picture on the functioning and success of the pool cannot
be ascertained at the present time. There is a provision
for reviewing the arrangement and the General
Insurance Council as the authority will convey its views
to the IRDA at the appropriate time.

Since the motor third party business is expected to run
on a 'no profit no loss' basis, there shall be no ceding
commission in respect of the business ceded to the pool
with effect from 1/4/2010.

It will be obligatory on the part of the insurance
companies to segregate funds on account of the pool
business in their accounts and invest them in a manner
as provided in the IRDFA's Investment Regulations.

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