Auto, health insurance to cost more from 1 April
27 March 2017
General insurance companies are set to jack up premiums for car, motorcycle and health insurance from 1 April with the Insurance Regulatory and Development Authority of India (Irdai) approving an upward revision in commission for agents and the introduction of a rewards system.
The Irdai (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016 comes into effect from 1 April 2017.
The increase will be in addition to the enhanced third-party motor insurance rates that will come into effect from 1 April.
The Irdai had, last week, proposed an increase of up to 50-per cent in the third-party liability premiums of motor insurance.
Third-part motor insurance premiums are revised on an annual basis by insurers citing increase in number of claims, with support from the regulator.
Irdai said while the revision in commission / remuneration rates and also the introduction of the reward system may be a trigger for insurers to revise product pricing, those who wish to do so may do so without filing any modification to the product under the Product Filing Guidelines.
Accordingly, they may change the premium rate by +/- 5 per cent of the existing rates of products / add-ons.
The price change should be limited to the extent of change in commission or remuneration, including the reward system resulting from the new regulations and should not involve any changes in other parameters, Irdai stated in a notification issued to insurance company heads.
Further, insurers will have to give a certificate that there is "no detrimental change" in premium rates or any other provision of policies already sold.