IRDA sets up panel on third-party motor insurance

The Insurance Regulatory and Development Authority (IRDA) on Friday set up a committee to look into issues related to third party insurance cover for motor vehicles.

The committee will be chaired by M Ramaprasad, member (non-life) and 12 other members, including representatives from the non-life insurance industry.

Third party insurance is a policy under which the insurance company provides cover for motor vehicles only to the extent of injuries or damage done to a third party.

The vehicle and its owner are not themselves covered.

"Offering motor third party liability cover to commercial vehicles has been a challenge for non-life insurers in view of the tariff controls prevailing and non-availability of credible data and statutory provisions," the IRDA said in an order.

It further said that since 2006, many issues relating to the adequacy of the premium charged for the cover and various alternatives to address the issue were brought to the notice of the insurance regulator.