The Insurance Regulatory and Development Authority of India (IRDAI) on February 06, 2024, issued the Exposure Draft on IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024.
The following are some of the major changes proposed in the said draft:
A. Rural Sector
• The unit for measurement of rural sector will now be gram panchayat.
• For life insurers, number of lives under individual policies and under group policies will be considered.
• For general insurers, number of individual dwellings under fire segment and number of vehicles under motor insurance segment will be counted.
• For general and SAHI companies, number of lives separately under health insurance and personal accident will be taken into consideration for achieving the obligations.
B. Social Sector
• The unit of measurement for the social sector continues to be a number of lives for all insurers.
• Since all insurers have been able to achieve the social sector obligations, the number of lives to be covered under the social sector has been increased to 20% in year 1 after notification.
• Insurance business pertaining to Government social security schemes such as Pradhan Mantri Awas Yojana, Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJY), etc. where total/ partial premium is paid by the Government, with/without any contribution from the members/ beneficiaries covered shall be considered for rural and social sector obligations.
C. Motor Third-Party Obligations
• With regard to motor third-party insurance, the obligations are specified for goods carrying and passenger carrying vehicles as nearly 50% of the vehicles in these 2 categories are uninsured. They are important segments of the motor insurance business and are exposed to third-party claims.
• Every general insurer is therefore required to underwrite at least a 20% increase over the total number of goods carrying and passenger carrying vehicles as compared to what was covered in the last financial year or 20,000 vehicles under these categories or 10,000 vehicles in each category, whichever is higher.
• Coverage of new Goods Carrying and Passenger Carrying vehicles shall not be counted towards Motor TP obligations.
D. Option to fulfil the obligations
• The insurers are allowed to buy and sell the obligations from out of the surplus to the extent of 20%.
• The insurer who has sold the obligations will continue to be the insurer and shall be responsible for servicing the insurance policy and settling a claim under it.
The views/comments of the various stakeholders and the general public are invited to the exposure draft. The comments/suggestions, if any, may be sent on or before February 27, 2024, to Mr. Vibhuti Prakash Srivastava at [email protected] with a copy to Mr. D.S. Murthy at [email protected] in the format as per Annexure B.
The exposure draft of the IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, is enclosed herewith as Annexure A.
Kindly find the Annexures attached to the document below.
