The Insurance Regulatory and Development Authority of India (IRDAI) has constituted a task force to suggest solutions and guidelines, once general insurers are given freedom to price products such as third party (TP) cover in motor insurance whose tariffs are now pre-determined.
Signalling its intent, the regulator said it had examined the recommendations of a working group constituted to suggest a regulatory framework following the de-notification of the existing tariffs. Post de-notification, the conduct of general insurance will have to be guided by a principle based guidelines.
As de-tariffication requires de-notification of existing tariffs and publication in the gazette, it has been decided to constitute a Task Force under the chairmanship of Insurance Advisory Committee Member Rajendra Beri and consisting of representatives from six general insurance as well as one re-insurer and with Executive Director (NL) Randip Singh Jagpal as the member convener.
It will recommend principle based framework on matters to be addressed and suggest draft guidelines for de-notified lines of business, IRDAI said, setting a three week timeline for the taskforce to submit its recommendations.
Hailing de-tariffication as a progressive step, CBO and Head-Health Insurance of Policybazaar Amit Chhabra said besides TP component of motor insurance, there are some lines in property covers that are tariffed, or, whose premium is pre-determined. Most of the other products such as health policy are de-tarrifed.
This will be in line with the approach IRDAI has taken over the last few years to usher in reforms and allow insurers the freedom to file procedure for new products instead of seeking approval first.
Mr. Chhabra said allowing general insurers freedom to price products will make pricing more accurate in cases such as TP motor cover. A de-tariffed TP cover would help insurers decide the premium based on various factors, while for motorist-consumers it could mean cheaper cover, he said.