IRDA Warns Insurers Against Refusal of Third Party Cover

Insurance regulator IRDA (Insurance Regulatory Development Authority) asked general insurance companies not to refuse third-party motor insurance.

According to the chairman of IRDA, private sector insurers are trying to avoid writing third-party motor insurance policies because of the high claim ratio in the commercial vehicle space. This is resulting risk for public sector companies as they are being hit the most.

Recently, IRDA revised guidelines on transferring risks to the newly formed declined risk pool for third-party motor policies. IRDA said that, the declined risk pool would apply to commercial vehicles for standalone third-party liability insurance but not for comprehensive motor insurance policy. The comprehensive policy will be out of the ambit of the pool.