Page 52 - Insurance Times JUNE 2022

Sheet and Analytical Ratios etc. as mandated in the of accident vehicles. It is noticed that the service agree-
captioned circular in the newspapers. However, they ments in addition to claim services, extend certain as-
may continue to publish a true and accurate abstract sistance services not related to insurance claims such
of the various returns for the purpose of publicity on a as free pick up and drop of vehicle, body wash, interior
voluntary basis pursuant to provisions of section 25 of cleaning, inspection of vehicle etc.,
the Insurance Act, 1938.
2. While the bundling of the above facilities with insurance
3. Stewardship Returns and Public Disclosure by FRB and is left to the motor service providers, the general in-
Lloyd’s India: surers issuing advertisements on the said services, pro-
jecting them as benefits provided within the insurance
Traditionally, the FRBs and Lloyd’s India do not invest in
cover is unacceptable. The main objective of service
equity instruments and they mainly invest in G Sec and
agreements with motor garages/workshops shall only
Debt markets. Based on the investment exposures of
the Branches of Foreign Reinsurers and Llyod’s India are be providing insurance services for claims of accident
granted following exemptions - vehicles and it cannot arbitrarily expand to include scope
of services which are not relevant for insurance claims.
The entities, whose investment policy does not permit
the investment in equity are exempted from the appli- 3. A perusal of advertisements issued by a few general in-
cation of Common Stewardship Code, disclosure surers showing discounts up to certain percent, saving
in the premium etc., and the illustrations provided
i. requirements and returns. The Public Disclosure
therein, reveals that the features or benefits are appli-
may, accordingly, be shown as ‘Not Applicable’.
cable under extreme or exceptional scenarios as defined
ii. The entities, whose investment policy allows equity
under Regulation 3 (g) (xiv) of IRDAI (Insurance Adver-
investment but have not made any investment in
tisements and Disclosure) Regulations, 2021 dated 7th
equity – the Code is applicable. However, a NIL re-
April, 2021. The discounts in certain advertisements are
turn will be a sufficient compliance for the same.
not shown objectively on filed rates but expressed in
iii. Other entities have to comply with the prescribed comparison to rates of erstwhile tariff. This is not to be
requirements. done.
4. Public Disclosure of Form - 40 on underwriting perfor- 4. Considering that the quoting of motor premium rates
mance by the General Insurers, FRBs and Lloyd’s India is dependent upon multiple factors and a variety of risks,
The Authority has received concerns regarding the up- the contents of the said advertisements which may be
loading of NL-40 - Segmental Underwriting Performance applicable under extreme or exceptional scenarios
on the respective website of the insurers under Public would make a large number of prospective customers
disclosures. Taking note of the same, it has been de- vulnerable to wrong understanding.
cided to discontinue the uploading of NL-40 as pre-
5. In view of the above, in terms of Regulation 12 (iii) of
scribed under the Public Disclosures. However, the above
IRDAI (Insurance Advertisements and Disclosure) Regu-
Insurers are advised to file the said format to the Au-
lations, 2021 dated 7th April, 2021, the insurers are
thority by e-mail at finance-nonlife@irdai.gov.in.
advised;
5. This circular is issued under section 14(2)(e) of the In-
(a) to discontinue the advertisements in respect of the
surance Regulatory and Development Authority Act,
services not related to insurance claims as may be
1999.
provided by motor garages/workshops.
Mamta Suri (b) to stop displaying discounts with reference or com-
Executive Director parison to rates of erstwhile tariff.
(c) to ensure that the discounts and saving in the pre-
Motor Insurance advertisements by Gen-
mium which may be applicable only under extreme
eral Insurers
or exceptional scenarios shall not be displayed as
IRDAI/NL/CIR/MISC/100/05/2022 examples.
Date: 13th May, 2022 Please acknowledge this circular and confirm having noted
its contents.
1. General Insurance Companies enter into service agree-
ments with motor workshops/garages for the purpose Yegnapriya Bharath
of providing motor insurance claim services for repair Chief General Manager (Non-Life)

52 The Insurance Times, June 2022