3rd party insurance gets more expensive from April 2017

Third-party insurance has become more expensive with the start of the new fiscal year (April 1, 2017). This comes after the Insurance Regulatory and Development Authority (IRDA) proposed a hike of up to 50% in 3rd party insurance premium rates. In addition to this rise in premiums, the third-party insurance packages have also become costly.

The IRDA has also given a go-ahead to insurers to revise commissions of their agents, as part of the IRDA (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016. This has put a financial burden on the insurance providers, who have increased the premium rates of Motor Vehicle Insurance to offset this rise in expenditure. However, IRDA has advised insurers to ensure that the increase in premium due to the new regulations is limited to +/- 5% of the previous rates.

The insurers have also been asked to submit a certificate to IRDA to ascertain that no detrimental changes have been made on premium or any other provision of insurance policies that have already been sold, prior to April 1, 2017.

Source: Financial Express and Livemint