Page 7 - Insurance Times April 2022

According to the revised rates, private Insurers seek equal bond- for incorporation of validated mobile
cars with 1,000 cubic capacity (cc) will numbers in the insurance certificates.
attract rates of Rs 2,094. Similarly, ing with lenders for infra The rules, aimed at faster disposal of
private cars with 1,000 cc to 1,500 cc surety cases and quick disbursal of compensa-
will attract rates of Rs 3,416 while General insurance companies are seek- tions, have set the mandatory proce-
above 1,500 cc private cars will see a ing parity with banks and other lend- dure for investigation of road acci-
premium of Rs 7,897. Two-wheelers ers for them to be able to get into pro- dents, preparation of detailed accident
over 150 cc but not exceeding 350 cc viding surety bonds for contractors bid- reports (DARs), and fixing timelines for
will attract a premium of Rs 1,366 and ding for large projects. different stakeholders for quick settle-
for two-wheelers over 350 cc the re- ment of claims by the MACT.
vised premium is Rs 2,804. The Union Budget had said that bidders
for government projects could supply As per the notification, the police will
For public goods carrying commercial surety bonds instead of bank guaran- have to visit the accident spots, collect
vehicles, the premium will range from tees, which are much more expensive evidence and intimate to the MACT
Rs 16,049 to Rs 44,242 depending on thus improving the viability of their bid. about the accidents so that the pro-
the gross vehicle weight while for the
While in practice both surety bonds and cess starts quickly. The investigation
private ones the premium will range bank guarantees do the same job of officer (IO) will be duty bound to inform
from Rs 8,510 to Rs 25,038. compensating the issuer of the tender the victims or their legal representa-
Further, the draft notification has pro- for non-fulfilment, the challenge for the tives about their rights and claims. The
posed a 15 % discount for electric pri- insurer lies during the recovery. changes have been made following a
vate cars, electric two wheelers, elec- "Given surety bonds is an entirely new Delhi High Court order which had di-
tric goods carrying commercial vehicles line of business, insurance companies rected the Centre to adopt the model,
and electric passenger carrying ve- would need clarity on various aspects which has been successfully done in
hicles. The proposed discount is ex- such as pricing, the recourse available Delhi. This has drastically cut the time
pected to incentivise usage of environ- against defaulting contractors, reinsur- period for getting the compensation.
mentally friendly vehicles. Electric pri- ance options and global best prac-
vate cars will attract a premium of Rs tices," said ICICI Lombard General In- 3rd party premium hike
1,780 to Rs 6,712 depending on their surance MD & CEO Bhargav Dasgupta.
capacity expressed in kilowatts. Simi- not enough: Industry
larly, two-wheeler electric vehicles will "As an industry, we would urge the The much-anticipated upward revision
attract premiums in the range of Rs regulatory bodies to facilitate changes in third-party (TP) motor insurance
457 to Rs 2,383. Further, hybrid electric to laws such as the Indian Contract Act premiums, after almost three years,
vehicles will attract a discount of 7.5 % and the IBC and bring surety bonds on proposed by the insurance regulator in
on the motor third party premiums. par with bank guarantees regarding a draft notification a few days ago, has
recourse available to issuers. This will not enthused the general insurance
The three-year single premium for help the industry approach surety so-
new private cars and five-year single lutions with much more confidence, industry, given the hike proposed for
premium for new two-wheelers has but it will be even more a viable propo- the overall portfolio is in low single dig-
also been revised and will attract pre- sition for all stakeholders," he added. its - around 3 %.
miums in the range of Rs 6,521 to Rs While the proposed hike is marginal, it
24,596 and Rs 2,901 to Rs 15,117, re- Investigation of all road will bring some relief to insurers, who
spectively, depending on their cubic have, of late, seen award amounts
capacity. accidents must granted by courts go up significantly,
The insurance executives are not very The government has made it manda- impacting the profitability of their port-
enthused with the proposed revision tory for police to investigate all road folio, said industry experts.
and termed it as a pro-policyholder accident cases that occur on and after With no increase in two years and only
move. The claims burden in the motor April 1 and also ordered that cops will a single-digit increase in 2019, the ex-
segment had gone down because of have to intimate about accidents to pectation was that the regulator may
the pandemic but the increased claims Motor Accident Claim Tribunals propose a double-digit hike. In the
on the health segment more than off- (MACTs) and insurance companies past, the general insurance industry
set the dip in claims in the motor seg- within 48 hours. The road transport has seen TP premium increases in
ment, an insurance executive said. ministry has also made it mandatory double-digits for the blended pool. T
The Insurance Times, April 2022 7