With losses mounting in the motor insurance portfolio
loss and damage to vehicles and human beings
the Insurance Regulatory and Development Authority (IRDA)
has decided to set up two institutions. While one will
look into vehicle safety, including testing of auto models,
the other will involve in the assimilation and analysis
of data of motor accidents and losses, and insurance.
this at the valedictory session of the two-day workshop
on Vehicle Testing and Safety organised by
IRDA and Concert (Consumer Education, Research, Teaching,
Training and Testing) in Chennai, IRDA chairman N Rangachary
said: The organisational structure of the two institutions
will be finalised by April 2003 end. Perhaps the
new institutions would be funded out of the Rs 1,500-crore
budgeted by the central government towards building institutional
capability that ensures safe and secure automobiles.
this year, IRDA had formed a committee to draw the roadmap
for setting up these two institutions. The committee members
also visited the National Highway Transport Safety Authority
(NHTSA) and Insurance Institute of Highway Safety (IIHS)
both located in the US to study the way
these activities are done by them.
committee had viewed that the automobile and insurance
industry should have better cooperation and coordination
to minimise costs and losses. Both the sectors should
create an adequate data base. Currently the data remains
buried in insurers books and no effort is done to
analyse what the data actually mean, he added.
can have a market only when customers have confidence
in their products. Similarly insurers will provide risk
cover only when they feel the product is worthy of it.
The way to progress is that automobile manufacturers
and insurers should understand each other well,
delivering the inaugural address Venu Srinivasan, chairman
and managing director, Sundaram Clayton, said there should
be an independent authority to do complete tests of vehicles.
Many of the cars sold here would fail the US crash
tests. He also called for strict enforcement of
the activities of NHTSA, Mike Monk said: Our mission
is to reduce death rates, injuries and economic losses
due to motor accidents. Set up under the Highway
Safety Act, NHTSA is the statutory body that deals with
vehicle safety in the US. It conducts various kinds of
of the functions of NHTSA is to investigate defects in
a vehicle suo moto and based on a complaints
and take corrective measures. We interview
complainants, conduct field inspections, make peer vehicle
comparisons, review our data base and arrive at a conclusion,
colleague, Aloke Prasad, added that the safety standards
are set under three major heads: crash avoidence (like
brakes), crash worthiness (body shell) and fuel integrity.
We do crash tests static and dynamic
to check the components, interiors, protective gears and
other aspects of a vehicle.
the situation in the UK, where insurers own vehicle-testing
centres that focuses on cost-reduction and accidents,
Christopher Evans, founder, Consumer Research Associates,
UK, said his organisation purchases automobiles from the
market and tests them elaborately on the roads. Evans
is the consultant for IRDA for setting up the vehicle-test
new cars are tested with a new driver every second week
and the vehicle driven for a minimum of 8,000 km,
he added. The consumer faces the risks of safety, security,
operational costs, insurance and depreciation.
the vehicle manufacturers for having scant regard for
passenger and driver safety, Balraj Bhanot, director,
Automotive Research Association of India, said: We
are in the process of establishing test centres in Delhi