The transport ministry will soon notify the rules specifying how it will fix the premium amount for each category of vehicle.
NEW DELHI: In a first, the road transport ministry will notify the third-party insurance premium for motor vehicles in consultation with the insurance regulator, IRDA. The change was introduced in the Motor Vehicle Act to ensure that consumer interest is protected and there is some check on the influence of insurance firms to increase the premium for mandatory third-party insurance, sources said.
“Earlier we used to fix the premium for third-party insurance cover. Once the rules are framed, this will be the task of the transport ministry. The amended law says that for the purposes of third party insurance related to either death of a person or grievous hurt, the central government shall prescribe a base premium and the liability of an insurer in relation to such premium for an insurance policy,” a senior functionary of Insurance Regulatory and Development Authority of India told TOI. Currently, IRDA has the authority to notify the premium amount for different categories of vehicles.
A government source said there had been complaints by transporters and owners of commercial vehicles that IRDA usually increases their third-party premium abnormally every year and this has been one of the reasons for transporters’ strikes in the past. He added that IRDA was reluctant to revise the rate even after meetings were held with officials from finance and transport ministry in 2017.
The transport ministry will soon notify the rules specifying how it will fix the premium amount for each category of vehicle. To ensure that insurance firms settle claims quickly, the Centre is likely to extend the mandatory submission detailed accident report by police to motor accident tribunals within one month of accident to all states. This will ensure quick relief to victims as the compensation payment will get expedited.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
