IRDAI cuts third party premium for some categories of vehicles

The Insurance Regulatory and Development Authority of India (IRDAI) on Monday reduced premium rates of motor third party insurance for some categories of vehicles for 2017-18.

According to the regulator, the new notification will override an earlier order issued by it on March 28, 2017, which notified rates with effect from April 1, 2017.

“The new premium schedule shall apply retrospectively with effect from April 1, 2017,” Yegnapriya Bharath, Chief General Manager—Non-Life, IRDAI, said in an order.

In the revised rates, there is significant reduction for goods-carrying vehicles — public carriers (other than three-wheelers). According to IRDAI’s March 28 order, the premium for goods-carrying vehicles was to go up by over 40 per cent with rates varying depending on the load.

For instance, the premium that was earlier in the ₹15,365-24,708 range was raised to ₹23,047-37,062.

However, the the latest order brings down the premium for different categories of vehicles from ₹21,511-36,120 (March 28) to ₹19,667-33,024 now.

It may be recalled that truckers in the South went on a strike for about 10 days from April 1, protesting against the steep hike in the mandatory motor third party rates and also held discussions with the regulator seeking reduction in rates. Similarly, premium has also been reduced for private cars exceeding 1,000 cc and 1,500 cc, agricultural tractors, special types of vehicles and two-wheelers.

The insurers will now have to return the additional amount collected for policies bought from April 1-17 on the basis of the previous notification to align them with the revised rates, said an IRDAI official.