Page 10 - Insurance Times JUNE 2022

cerned, insurers may follow a modular firm required to earmark a certain per- cial sector to 30% from 25% freeing up
approach using various permutations centage of their profit for the social- more money for investments in stocks
and combinations, leaving the choice security schemes for the workers," ac- and bonds in the sector.
to the proposer. cording to the report.
"The authority... permits all insurers to
"Certain standard products prescribed have exposure to financial and insur-
by IRDAI can be offered as modules, Motor insurers asked to ance activities up to 30 percent of in-
albeit with a restricted sum insured, vestment assets," IRDAI said in a circu-
stop ads displaying ser-
keeping the target segment in view," lar. The move also comes just before
vices not part of cover
the committee said, while recommend- Life Insurance Corp of India's (LIC) Rs
ing 14 standard modules and suggests IRDAIhas asked motor insurance pro- 21,000 crore IPO the largest from In-
the product may be sold by insurers ei- viders to discontinue advertisements dia.
ther on an individual or group basis. showing services, like free pick up and
Insurance executives welcomed the
drop of vehicle, which are not part of
While it is necessary to have identified move saying it will help them diversify
the insurance cover. General insurance
channels of distribution which have been their investment basket.
companies enter into service agree-
provided for in the MI Regulations, it
"Weightage of financial & insurance
ments with motor workshops/garages
might be a good idea to permit all other
for the purpose of providing motor in- companies in broader Indian market
channels also to chip in and widen the
surance claim services for repair of ac- indices has consistently gone up over
reach, it added.
cident vehicles. the last few years. Life insurance indus-
try had been seeking an increase in the
Call to set up unemploy- IRDAI said it is noticed that the service
current 25% sectoral limit on exposure
agreements in addition to claim ser-
ment insurance fund to the BFSI Sector.
vices, extend certain assistance services
Companies should consider building an not related to insurance claims such as
Third-party motor insur-
unemployment insurance fund during free pick up and drop of vehicle, body
periods of economic boom, which could wash, interior cleaning, inspection of ance premium hiked w.e.f
be utilised to financially support work- vehicle etc.
June 1: Check electric ve-
ers up to a limited period after re-
"While the bundling of (such) facilities
trenchment, according to the Reserve hicle premium rates
with insurance is left to the motor ser-
Bank of India's Report on Currency and The Centre approved the revised base
vice providers, the general insurers is-
Finance (RCF). premium rates for third-party motor
suing advertisements on the said ser-
"Labour reform with flexibility to hire vices, projecting them as benefits pro- vehicle insurance on Wednesday. From
June 1, 2022, these new rates will come
and fire workers can allow firms to ad- vided within the insurance cover is un-
into effect. These rates were last up-
just their workforce according to eco- acceptable," the Insurance Regulatory
dated for the 2019-20 fiscal year and
nomic cycles, thereby enabling them to and Development Authority of India
were stable during the COVID-19 pan-
use their resources more efficiently. (IRDAI) said in a circular.
demic. The Insurance Regulatory and
"This, however, could come only at the The main objective of service agree-
Development Authority of India (IRDAI)
cost of lower welfare/ social security of ments with motor garages/ workshops
notified the revised motor third-party
the workers. shall only be providing insurance ser-
insurance rates via a notification on
"One option here could be to build an vices for claims of accident vehicles and
May 26, 2022.
unemployment insurance fund...at the it cannot arbitrarily expand to include
Electric vehicle long term premium
firm level...," said RCF. scope of services which are not relevant
rates A new private electric vehicle (EV)
for insurance claims, it said.
Further, many of the social-security
with a power output of less than 30 KW
measures apply to firms having a cer- can be insured for three years for Rs
IRDA increases investment
tain minimum number of workers,
5,543. If the EV has a power output of
which creates incentives for firms to not limit in BFSI sector
more than 30 kW but less than 65 kW,
scale up.
The Insurance Regulatory and Devel- the three-year premium would be Rs
"To address this issue, a policy option opment Authority of India (IRDAI) has 9,044. Larger EVs with more than 65
could be universal access to social secu- increased the investment limit by insur- KW will be insured for three years for
rity, irrespective of firm size, with each ance companies to invest in the finan- Rs 20,907 each.
10 The Insurance Times, June 2022