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Tuesday,17-June-2025
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Motor TP insurance: Administered price, long term cover vs deregulated price, one year cover

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 The Indian general insurance industry is divided on the aspect of long term versus one year motor third party risk cover and its pricing mode.

However, they are unanimous in their view that the third party insurance should be under them and not with the central government or administered as a pool.

Vehicle insurance policies are two parts — own damage (insurance for the vehicle against damage, theft) and third party liability (liability for third parties).

The third party insurance cover is mandatory whereas the insurance cover for vehicle damage is not mandatory. The premium is fixed by Insurance Regulatory and Development Authority of India (IRDAI).

The general insurer’s role in designing the risk cover, promoting it, and fixing the premium is almost zero.

“I am for the deregulation of the third party premium rates. The premium rate is not administered one in major countries,” Varun Dua, Managing Director and CEO, Acko General Insurance Limited, told IANS.

Like him, many CEO when asked by IANS agree for deregulation of premium rates but strangely that is not happening.

Even after two decades after liberalisation of the sector citing various reasons including reduction in premium, insurers seem to want the price to be administered with yearly upward revision and not as per their claims experience.

Nearly 40 per cent of the general insurance business is from the motor insurance vertical and a major portion of that from third party risk cover, insurers are not enthusiastic about any changes resulting in lower premium and investment income.

Contrary to the claims made by the general insurers that they are incurring huge losses under the motor portfolio, the numbers as per the Insurance Information Bureau of India (IIB) study shows the contrary.

In its annual report on motor insurance for the fiscal 2018-19, the IIB said a sum of Rs.35,519 crore of motor claims – towards vehicle damage (Rs.18,262 crore) and third party liability (Rs.14,257 crore) were settled during 2018-19- while the gross underwritten premium was Rs.64,522.35 crore.

According to the report, the average settlement amount for death claims during fiscal 2018-19 was Rs. 901,207 and for injury claims it was Rs. 251,094.

The industry players also claim that a large number of vehicles run on the roads without third party insurance.

However, they do not have any answer when asked how that impacts them as they pay claims only on those policies issued by them and it is for the police to penalise the violators.

Industry players say they bring in efficiency in third party loss management when queried about insurers being freed of third party insurance in favour of the central government or administered as a pool.

“The insurer is bringing in expertise and efficiency in loss administration and fraud control. At the same time, claims administration requires a lot of manpower and infrastructure which has already been set up and improved by various insurers,” Adarsh Agarwal, Appointed Actuary, Go Digit General Insurance told.

According to him, a policyholder decides on the mode of claim for vehicle damage – whether under own damage part or getting into an arbitration for a third party claim under a third party property damage clause- separating the two may put him into difficulty.

Unless there is a process advantage that speeds up the third party claims with the judiciary involved, Agarwal added.

“One cannot wish away the role of insurers. They ensure easy access, availability of such insurance products which cannot be replicated by an already overburdened government,” R. Raghavan, former General Manager of General Insurance Corporation of India (GIC Re) and founder CEO of Insurance Information Bureau of India (IIB) told IANS.

Insurers are well equipped to handle the stretched claims process in Motor Accident Claims Tribunals and subsequent litigation, he added.

Raghavan said, though IRDAI still keeps finalising the premium rates, the insurers supply necessary data for the actuarial pricing process.

On the point of long term motor third party policy Raghavan said: “It is in the interest of the society at large, for insurance terms to be longer in duration. It also helps insurers to balance their books towards making adequate provision for such long tail liabilities. Portability may effectively undo this equity and also lead to wild goose chase in pinning the right insurer for payment. An insurer with a multi year commitment will work on price efficiency too,” Raghavan said.

Differing on that Agarwal said: “Long term policies have a twofold problem. A customer is encouraged to stick to one company despite the service quality they get from the current insurer as changing the insurer has an inherent inertia mid-way. Secondly, accounting the spare portion and labour cost for a longer term, given the inflation, is tricky and not ideal for the general insurance industry.”

“If one makes non-life insurance a long-term contract, the capital needs, provisioning norms and others would kick in. How it would impact an insurer in the future as motor third party claims are long-tailed ones is not known now,” and industry official told preferring anonymity.

Locking in a policyholder for five long years with one insurer also makes the playing field anti-competitive and anti-policyholder.

“The vehicle dealers will have an upper hand. They will demand higher compensation from the insurers. Already dealers are selling only policies of those insurers from whom they get higher commissions and other perks,” an industry official told

Crime

Delhi: Govt official held for defrauding colleague of Rs 24 lakh with illegal UPI transactions

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New Delhi, June 17: The Delhi Police on Tuesday claimed to have cracked a sensitive cyber fraud case, involving two government officials, and made a recovery of over Rs 24 lakh, illegally transferred to a third person, by one of them.

A Kolkata-based individual named Sanjay Chakraborty and Prakash Singh, a government employee posted in the President’s Estate, have been arrested for committing UPI fraud and duping another government servant of Rs 24.40 lakh.

The Cyber police station of New Delhi began a probe into the case, after Surender Kumar, a 59-year-old government employee, working as Chief Household Assistant in Household Section, lodged a complaint about theft of Rs 24.40 lakh from his and his wife’s PNB accounts without their knowledge. He complained that the money was withdrawn from their accounts via illegal UPI transactions, though neither he nor his wife used any UPI app, including PhonePe, GooglePay or PayTm.

The cyber cell of Delhi Police launched investigation into the financial trail and found that Rs 16.05 lakh from the account of the complainant’s wife was transferred to a Bank of Baroda account of Sanjay Chakraborty, a Kolkata resident while an additional Rs 4 lakh from complainants’ account was routed to another Bank of Baroda account, operated by the same individual.

When the police team apprehended Sanjay Chakraborty from West Bengal and grilled him over his involvement, he broke down and confessed to the crime. He admitted that he was receiving fraudulent money on behalf of his associate Prakash Singh, in exchange for a 2-3 per cent commission.

Following this, the police arrested him from Kolkata as well as 27-year-old government employee Prakash Singh, from Delhi.

The key accused, when questioned by police, also narrated his modus operandi. He said he had regular access to the victim’s mobile phone.

As the elderly colleague was unfamiliar with smartphone applications, he used to install PhonePe on the victim’s phone and fraudulently transfer money (Rs 1 lakh every time on every 3-4 days over the period of 3 months) without their knowledge. He would also delete transaction SMS messages and uninstall the app before returning the phone.

To mask his involvement, he used accounts of his friends, including Sanjay Chakraborty and others, who would retain a small commission and then send the remaining amount to his bank account.

The victim had purchased two Apple mobile phones, one motorcycle, one laptop, household things with fraudulent money and also spent it on travelling, informed the police.

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National

BJP, Congress engage in war of words over ‘caste’ census notification

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New Delhi, June 17: A day after the Centre notified the two-phased population census, the Congress and BJP are caught up in political bickering over former’s claims that caste clause have been given a miss.

Many Congress leaders questioned the government over ‘advertently’ dropping the caste clause from official notification on Census and also questioned its intentions behind the move, a charge strongly contested by BJP leaders.

Senior Congress leader and Odisha Congress in-charge Ajay Kumar Lallu commenting on the Census notification, questioned government’s intentions and demanded transparency.

“If the government is serious, then why is there a mismatch between its press releases and gazette notifications? The caste census remains pending. The Cabinet proposal appears more like an eyewash. We’ve always doubted the BJP-RSS regime’s intent on this issue”, said Lallu.

He also took a swipe at Uttar Pradesh Chief Minister Yogi Adityanath for rampant corruption in the state, said, “UP is the land of Baba Kashi Vishwanath, but CM Yogi is speaking lies from this holy land.”

Chhattisgarh Deputy Chief Minister Arun Sao, commenting on the issue, accused the Congress of historical betrayal and spreading deliberate misinformation.

Talking to media, Deputy CM Arun Sao said, “It is a well-known and historically documented fact who insulted Dr. Ambedkar, who conspired to defeat him in elections, and who denied him the Bharat Ratna. These are undeniable truths. The Congress should stop spreading lies.”

He further lashed out at the opposition for questioning the caste census notification. “They did nothing for 75 years except talk. Even now, when the government has officially notified the caste census for 2027, they continue to spread rumours and create confusion. But the people of this country are no longer unaware,” he added.

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disaster

Air India plane crash: 144 victims identified by DNA tests, recovery efforts intensify

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Ahmedabad, June 17: Four days after the devastating crash of Air India flight AI-171 en route from Ahmedabad to London, authorities have confirmed that 144 DNA samples have been successfully matched as of noon Tuesday, according to Gujarat Minister of State for Home, Harsh Sanghavi.

The identification process is being led by a combined team from the State Forensic Science Laboratory (FSL) and the National Forensic Sciences University, working around the clock to bring clarity to grieving families.

“This is a highly sensitive and emotional task. Every match is not just a technical confirmation, but a step toward giving closure to families waiting in anguish,” an official from the forensic unit said.

Emergency response teams remain stationed at the crash site in Meghaninagar, where investigators continue to recover personal belongings and body fragments amidst the wreckage.

Authorities have stated that all efforts are being made to ensure the dignity of the deceased and transparency in communication with the victims’ relatives.

Tata Group, which re-acquired Air India in 2022, has announced an ex gratia payment of Rs one crore to the families of each of the deceased from the AI‑171 crash near Ahmedabad. In addition, Air India has immediately released an interim relief payout of Rs 25 lakh per family — and to the lone survivor — to cover urgent needs.

The group will also cover all medical expenses for the injured and pledged financial support for rebuilding a damaged hostel at BJ Medical College. Chairman N. Chandrasekaran described it as “one of the darkest days in the Tata Group’s history.”

As of June 17, rescue and recovery efforts at the Ahmedabad crash site of Air India flight AI-171 remain intense and deeply coordinated. Over 300 firefighters, supported by 60 fire vehicles and 20 water bowsers from Ahmedabad, Gandhinagar, Vadodara, ONGC, and other nearby agencies, continue to clear debris and extinguish smouldering wreckage.

On the ground, three NDRF teams, 150 CRPF officers, Indian Army personnel, and teams from the CISF, BSF, and Western Railway Disaster Management are conducting systematic searches for remains and missing belongings.

Specialised sniffer dogs are aiding in the recovery of human remains, while Ahmedabad Police, responding to disturbing reports, have deployed animal rescue teams to safely relocate stray dogs scavenging at the crash site.

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