Page 401 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

Q 28. Is there any need to amend Motor Vehicle Act?
Suggest the de-risking model for profitability in
motor insurance.

Ans: There is need to amend the Motor Vehicle Act. Currently
there is no timeframe for making claims under the Act,
moreover, claims can be made by approaching Courts
in any part of the country. The insurance companies
have large number of claims in different courts.

The problems relating to third party claim can be
overcome only if there is cap on the limit of liability.
Apart from the unlimited liability in the third party claims
the motor insurance is currently bogged down with some
problems regarding the rates and the manner in which
claims are handled.

De-tariff in general is inevitable in a highly competitive
environment. It is a fact that in the transition stage, the
insurance companies may come under severe pressure,
as they have to compete with each other. However the
TAC would not allow any company to suffer from the
initial transitional problems.

De-risking model for profitability: Taking advantage
of softening of premium rates in the international
markets, Indian companies with large industrial asset
are purchasing Mega Risk policies, an umbrella cover

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