IRDA institutions to monitor vehicle safety, data collection

Venkatachari Jagannathan
24 March 2003

Chennai: 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.

Announcing 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.

Earlier 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.

The 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.

Manufacturers 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,” Rangachary said.

Earlier, 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 traffic regulations.