Page 9 - Insurance Times March 2016 Sample

Motor Insurance to be available through ATMs Insurers may need more

IRDAI plans to permit insurance com- cording to the latest data. While insur- time to revise JV clauses
panies to tie up with banks to provide ance is automatically bought at the
the mandatory motor third-party in- time of vehicle buying, owners fail to Insurers are likely to seek an exten-
surance through bank sion from the
ATMs, its Executive Di- renew it after the first IRDAI to rework
rector Sriram Taranikanti year. The regulator is of their joint venture
said. "There are seven the view that easy ac- agreements and
crore vehicles plying cess to purchase of insur- incorporate the
without insurance, cre- ance might ensure better Indian manage-
ating a huge social and compliance. ment controlled
economic hazard for victims of road clause as stipulated by the regula-
accidents, and this needs to be cur- As the premium rates for tor. IRDAI had issued guidelines in
tailed," the official said. third-party insurance are generally October 2015 defining "Indian-
fixed and uniform, there is no question owned and controlled" as mentioned
This also dilutes the safety net and has of much competition. The lowest pre- in the Insurance Laws (Amendment)
adverse impact on the compensation mium for third-party insurance is about Act, 2015.
available for the common man in case Rs. 500. On this basis, if all vehicles are
of any grievous injury arising out of use insured, it will generate a premium The IRDAI said "control" includes the
of uninsured vehicles. income of Rs. 3,500 crore. If one adds right to appoint a majority of the di-
up the higher premium for some rectors or control the management
The total number of registered ve- classes of vehicles, the combined pre- or policy decisions. This means the
hicles in the country are 15 crore, ac- mium income generation could be majority of directors, excluding inde-
around Rs. 5,000 crore. pendent directors, will have to be
nominated by Indian promoters or
IRDA working rigorously to implement e-motor insurance Indian investors.

The initiative of issuing e-motor insur- developing necessary protocols and According to the guidelines, even the
ance was first taken up by Telengana modalities to do this," he said. appointment of key management
government with a joint effort by IRDA, persons, including chief executive of-
IT department, Police and The entire process of data handling is ficer, managing director or principal
Transport department. Now being done by Insurance In- officer in the case of an insurance
the regulator wants to formation Bureau (IIB). Ac- broker, will have to be through them
launch it nationally. cording to IIB CEO R or the board of directors.
Raghavan, the Bureau is
In this regard, Sriram working with Madhya Experts say that all the current joint
Taranikanti, Executive Direc- Pradesh, Rajasthan, National venture agreements envisage a fair
tor, IRDA, told that the au- Capital Region, Kerala and bit of control for the foreign partner
thority is working on rolling out this in terms of appointment of indepen-
facility at the national level in a phased Karnataka for it. dent directors and key management
manner. positions in the insurance company
"We are in the proof of concept stage and these will have to be reworked.
"While Telangana is the first State to in these States. We need to collabo-
accept e-motor insurance policies, the rate and coordinate with transport, IT "Foreign partners have to let go of
Ministry of Road Transport and High- and police departments in each of a lot of historical rights that they
ways, Government of India, has agreed these States to roll this out. We expect held in the insurance company. They
to share vehicle data with us. We are to see some good progress by mid- have to renegotiate with the domes-
2016," he said. tic partners as they have to let go of
their control. There is a provision of
LIC decision on Third Gender approved by IRDAI asking an extension for six months
and I believe many insurers will ex-
LIC recently announced the decision to introduce the third gender option in its ercise this option," said Anuj Sah (As-
proposal forms. This is in line with the Supreme Court verdict in 2014. sociate Partner) with law firm
Transgender applicants can now opt for the 'third gender' category. Policy buy- Khaitan & Co.
ers until now had only two options 'male' and 'female'. This new form has re-
ceived the approval of the Insurance Regulatory and Development Authority of
India (IRDA).

The Insurance Times, March 2016 9