If the new rates turn out to be high, insurers run the risk of incurring losses | Photo credit: PTI
The general insurers are concerned about the delay in notification of the third-party engine rates of third parties (TP) for the current financial year 2025-26. Due to the non -notification of the revised rates, insurers are currently collecting premiums announced in the last year. If the new rates turn out to be higher, insurers run the risk of incurring losses, while if the rates are lower, it will be a loss for customers who already buy the cover.
The coverage rates of third -party mandatory engines are announced annually through a joint consultation between the Authority of Regulatory and Insurance Development of India (IRDAI) and the Ministry of Transportation on the road, Government of India.
“Current financial year rates were supposed to be announced before March 31, 2025. Business line.
Around the last five years, the increase in third -party premium rates has been in the range of 2 to 4 percent on average. “In the context of increasing claim costs and third -party awards rates, the industry is incurring losses. This will also affect solvency relations. We expected the announcement in the first week of this month, but it did not happen,” he added.
In view of the increase in cases of traffic accidents, it is even more important to guarantee the financial health of the industry, while the concerns about the social security of the victims are equally important, their agreement.
According to the Motorized Vehicle Law, third -party car insurance provides financial protection for the injured or whose property is damaged in an accident. Ensures that victims receive compensation for their injuries and property damage.
The industry also sees an urgent need to increase premiums for certain categories of segments of goods/commercial vehicles, where there has been no increase in the last three years, said a senior official or a public sector insurance.
Posted on April 21, 2025