Lok Sabha Question No. 3893 (UNSTARRED), answered on 2017-03-24
Subject: Hike in Motor Insurance Premium
Ministry: FINANCE
Asked by: VIJAYSINH MOHITE PATIL, VINOD KUMAR BOIANAPALLI, JAYAKUMAR JAYAVARDHAN, SUPRIYA SADANAND SULE, DHANANJAY BHIMRAO MAHADIK

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 3893

TO BE ANSWERED ON FRIDAY, MARCH 24, 2017/CHAITRA 3, 1939 (SAKA)

## Hike in Motor Insurance Premium

3893. SHRI MOHITE PATIL VIJAYSINH SHANKAR RAO:  SHRI B. VINOD KUMAR:

DR. J. JAYAVARDHAN: SHRIMATI SUPRIYA SULE: SHRI DHANANJAY MAHADIK:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Insurance Regulatory and Development Authority of India (IRDAI) has proposed upto 50 per cent increase in insurance premium for cars, motorcycles as well as commercial vehicles and if so, the details thereof;
- (b) whether the Government has agreed to do away with the cap on third party liability of insurance companies in case of grievous injuries or death in road crashes and if so, the details thereof and the reasons therefor;
- (c) whether this move will hike the premium for third party motor vehicle insurance significantly and if  so,  the  details thereof along with the steps taken by the Government to protect the vehicle owner from steep hike;
- (d) whether the Government proposes to regulate the third party insurance components as it has done in the case of own damage cover and if so, the details thereof;
- (e)  whether  out  of  around  19  crore  registered  vehicles  in  the  country,  only  8.26  crore  had  third party insurance cover; and
- (f)  if so, the corrective steps taken/ being taken by the Government to motivate the vehicle owners to take third party insurance as a standalone product rather through comprehensive insurance policy?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

(a):  Based  on  the  actuarial  analysis  of  the  data  pertaining  to  the  experience  period  of  accident years from 2011-12 to 2015-16 in respect of gross written premium and amount of claims (paid up to March 31, 2016), Insurance Regulatory and Development Authority of India (IRDAI), has sought comments from various  stakeholders  on  an  Exposure  Draft  on  the  proposed  premium  for  cars, motorcycles as well as commercial vehicles, which is posted at www.irda.gov.in

(b): Ministry of Road Transport and Highways has informed that no such decision has been taken by the Government.

(c): In view of (b) above, the question does not arise.

(d):  In the proposed Motor Vehicles (Amendment) Bill, 2016, the definition of third party is being amended to include the drivers and co-workers of the transport vehicles to ensure coverage of payment of compensation.

(e): Out of around 19 crore registered vehicles in the country, around 8.26 crore have third party insurance cover, as per data provided by General Insurance Council.

(f): IRDAI has taken several steps like creating a platform called 'Vehicle Insurance Status Search system (VISS)' to ascertain the insurance status of a vehicle, promoting issuance of long term two wheeler insurance policies (upto three years), allowing issuance of motor e-policies and licensing new  channels  like  Customer  Service  Centre  (CSC),  Insurance  Marketing  Firm  (IMF),  Web aggregators etc. to facilitate the sale of motor insurance policies

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