IRDAI extends validity of the rates beyond March 31
Motor third party insurance premium rates will remain unchanged for now with insurance regulator IRDAI extending validity of the existing rates beyond March 31.
All insurers shall continue to charge the rates currently being charged for the cover from April 1 onwards until further orders, the Insurance Regulatory and Development Authority of India (IRDAI) said on Friday.
In an order, Chief General Manager (Non-Life) Yegnapriya Bharath said the validity of premium rates for Motor Third Party Liability Insurance Cover for 2019-20 stands extended beyond March 31.
What this means for vehicle owners is that a revision in the rates, primarily an increase for several category of automobiles, IRDAI had proposed for 2020-21 will not be implemented until further notice.
The rates for the third party cover, which is mandatory for all automobiles, are decided by IRDAI, while the rate for Own Damage, another key component of motor insurance, is de-tariffed or in other words insurers decide that.
The third party rates are reviewed by the regulator for every financial year, a process that kicks off with an exposure draft on the new rates in March seeking comments from the stakeholders.
While Friday’s decision of IRDAI extending validity of the rates would mean no change for now, there always is the possibility of the regulator asking insurers to recover the differential amount later from those who buy the cover in the interim.
The exposure draft, on the rates for 2020-21, had mooted an increase in the MTP premium rates for cars, two-wheelers, good carriers, buses, including school buses. The increase mooted was upwards of 5%, with only a few sub-segment of automobiles spared.
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