Decision on motor insurance pool after discussions: IRDA

Private sector insurance players have been demanding abolition of the third party insurance pool, saying that the arrangement for sharing claims was denting their profits. Since the four public sector companies dominate the motor insurance market, private players lose out and at many times have to settle claims on their own

Hyderabad: The Insurance Regulatory and Development Authority (IRDA) on Tuesday said it will take a view on scrapping the third party motor insurance pool, used to settle claims of accident victims, after completing discussions with stakeholders, reports PTI.

“Considerable amount of interactions or discussion are to take place. Consultations have to take place. No time frame for that (scrapping third-party motor insurance pool),” IRDA chairman J Hari Narayan told reporters here.

Private sector insurance players have been demanding abolition of the third party insurance pool, saying that the arrangement for sharing claims was denting their profits.

Claims from the third party (TP) pool are settled according to the ratio of market share of an insurer. Since the four public sector companies dominate the motor insurance market, private players lose out and at many times have to settle claims on their own.

The general insurance industry is expected to incur losses to the tune of Rs3,500 crore on account of motor insurance claims in the current fiscal.

Mr Hari Narayan said the pool was created to strike balance between supply and demand when the motor insurance market was imbalanced.

“So the question now is whether going forward should we be recognising the fact that demand and supply are in balance or we should change the architecture for the betterment of the policy holders,” he added.

IRDA has been asking insurance companies to manage their claim settlement process judiciously to avoid losses.

Third-party insurance cover protects the vehicle owner from any financial liability in case of damage to life or property of a third person.

This insurance is mandatory and no vehicle can be taken out from a showroom without the third party insurance.

Replying to a query on IPO norms for insurance companies, Mr Hari Narayan said the IRDA has already received suggestions from the Securities and Exchange Board of India (SEBI) and could announce the guidelines anytime.

On concerns that ‘single premium products’ could harm the industry in the long run, he said the product has both advantages and disadvantages.

“As long as the balance between the single premium product and multi-pay products are maintained they should be no concerns,” he said, adding the IRDA does not have any plans to restrict the product.

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Cos raised Rs3,029 crore in September via IPOs, rights & debt issues

“During September 2011, Rs3,029.1 crore was mobilised in the primary market through 12 issues as compared to Rs3,865.7 crore mobilised through 11 issues in August 2011, a decrease of 21.6% over the month,” according to the latest ‘Capital Market Review’ by market regulator Securities and Exchange Board of India

Mumbai: The quantum of funds raised by India Inc through initial public offers and rights issues fell to Rs3,029.1 crore in September this year, a 21.6% decline in comparison to the month of August, reports PTI.

“During September 2011, Rs3,029.1 crore was mobilised in the primary market through 12 issues as compared to Rs3,865.7 crore mobilised through 11 issues in August 2011, showing a decrease of 21.6% over the month,” according to the latest ‘Capital Market Review’ by market regulator Securities and Exchange Board of India (SEBI).

Of the 12 issues in September, nine were initial public offerings (IPOs), one was public debt issue and two were rights issues.

Corporates raised a total of Rs3,865.7 crore through four debt public issues, four IPOs and three rights issues in August 2011.

SEBI also said no Qualified Institutional Placement (QIPs) took place in September.

In the previous month, there was a single QIP which raised Rs8 crore.

Preferential allotments also witnessed a decline in September 2011, with 25 such allotments raising a total of Rs499 crore. In comparison, 29 preferential allotments were executed in the primary market in August, which raised a total of Rs688 crore.

After a period of volatility, the stock market witnessed an upswing in September, with the benchmark Sensex gaining 8.9% during the month.

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Foreign Inflows: Grey, Not Black

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Americans camping near Wall Street have realised that the...

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