Page 313 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

was administered by the national reinsurer, General
Insurance Corporation.

The pool was intended to provide a mechanism for
containing the high claims ratio. Till 2007, the losses from
commercial vehicle third party liabilities were entirely
borne by the public sector. The high losses, in turn,
resulted in the underwriting business being in the red.
The pool mechanism had cut the losses to some extent
as the risk was shared among all the 19 companies.

However, the pool is now faced with mounting
opposition from the private sector insurers. The private
players want to return to the old system. Such a system
would result in the private sector underwriting risks
on only private motor vehicles, where the third party
losses were below 100 per cent. The losses in the
commercial vehicles segment were high, with the
claims being upwards of 150 per cent.

Though the IMTPIP remained functional for almost three
years, it was yet to put data in place for claims and losses.
The Insurance Regulatory and Development Authority
had sought this data as a precondition for motor vehicle
liability premium revisions. The pool functions as an
exclusive reinsurance agency for third party motor
insurance losses.

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