Page 41 - Life Insurance Today March 2016

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 in- incorporate the
without insurance, cre- surance might ensure Indian manage-
ating a huge social and better compliance. ment controlled
economic hazard for victims of road clause as stipulated by the regulator.
accidents, and this needs to be cur- As the premium rates IRDAI had issued guidelines in Octo-
tailed," the official said. for third-party insurance are generally ber 2015 defining "Indian-owned
fixed and uniform, there is no ques- and controlled" as mentioned in the
This also dilutes the safety net and has tion of much competition. The lowest Insurance Laws (Amendment) Act,
adverse impact on the compensation premium for third-party insurance is 2015.
available for the common man in case about Rs. 500. On this basis, if all ve-
of any grievous injury arising out of hicles are insured, it will generate a The IRDAI said "control" includes the
use of uninsured vehicles. premium income of Rs. 3,500 crore. If right to appoint a majority of the di-
one adds up the higher premium for rectors or control the management
The total number of registered ve- some classes of vehicles, the com- or policy decisions. This means the
hicles in the country are 15 crore, ac- bined premium income generation majority of directors, excluding inde-
could be 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- to share vehicle data with us. We are According to the guidelines, even the
ance was first taken up by Telengana developing necessary protocols and appointment of key management
government with a joint effort by modalities to do this," he said. persons, including chief executive of-
IRDA, IT department, Police ficer, managing director or principal
and Transport department. The entire process of data officer in the case of an insurance
Now the regulator wants to handling is being done by In- broker, will have to be through them
launch it nationally. surance Information Bureau or the board of directors.
(IIB). According to IIB CEO R
In this regard, Sriram Raghavan, the Bureau is work- Experts say that all the current joint
Taranikanti, Executive Direc- ing with Madhya Pradesh, venture agreements envisage a fair
tor, IRDA, told that the au- Rajasthan, National Capital bit of control for the foreign partner
thority is working on rolling out this Region, Kerala and Karnataka for it. in terms of appointment of indepen-
facility at the national level in a dent directors and key management
phased manner. "We are in the proof of concept stage positions in the insurance company
in these States. We need to collabo- and these will have to be reworked.
"While Telangana is the first State to rate and coordinate with transport, IT
accept e-motor insurance policies, the and police departments in each of "Foreign partners have to let go of
Ministry of Road Transport and High- these States to roll this out. We expect a lot of historical rights that they
ways, Government of India, has agreed to see some good progress by mid- held in the insurance company. They
2016," he said. have to renegotiate with the domes-
tic partners as they have to let go of
LIC decision on Third Gender approved by IRDAI their control. There is a provision of
asking an extension for six months
LIC recently announced the decision to introduce the third gender option in its and I believe many insurers will ex-
proposal forms. This is in line with the Supreme Court verdict in 2014. ercise this option," said Anuj Sah
Transgender applicants can now opt for the 'third gender' category. Policy buy- (Associate Partner) with law firm
ers until now had only two options 'male' and 'female'. This new form has re- Khaitan & Co.
ceived the approval of the Insurance Regulatory and Development Authority
of India (IRDA). 41

Life Insurance Today March 2016