NON-LIFE INSURERS MAY BE ALLOWED TO AMEND CLAUSES: IRDA CHIEF

Non-life insurance companies may soon be able to tweak the terms, conditions and wordings of their fire, engineering and motor insurance policies.While fire, engineering and motor insurance policies are no longer under tariff and insurers have the freedom to set their price, insurers still do not have the flexibility to change the clauses of the policies. Insurance contracts are currently worded based on the terms and conditions set by the Tariff Advisory Council.Mr C.S. Rao, Chairman, Insurance Regulatory and Development Authority, said that the insurers could now change the terms and conditions of their insurance contract and that any deviation from the existing clauses would have to be filed with the regulator on a case to case basis.“As far as terms and conditions are concerned, our view as of now is that insurers who want to deviate in any specific area must file those deviations and if we are comfortable, we can offer them that relaxation Initially, we may allow deviations case-by-case but ultimately whatever we agree on deviation will be uniform across various insurance companies,” said Mr Rao, speaking to reporters on the sidelines of a health insurance seminar organised by CII. Mr Rao said that this view had been communicated to the General Insurance Council which is the self-regulatory body for non-life insurers.The General Insurance Council had in fact submitted a report on ‘common market wordings’ a few months ago. “The report only rephrases the existing wordings created by the Tariff Advisory Council. We can look into the changes suggested by them.” On the performance of non-life companies in the free-price regime, Mr Rao said that the IRDA was still examining the results for April, when major renewals in insurance contracts are seen. “We hope to conduct inspections on companies and examine how underwriting is being done,” said the Chairman.Health Insurance Speaking at the seminar, Mr Rao said that health insurance had seen rapid growth in the past five years. It had grown from Rs 600 crore in 2003-04 to Rs 4,000 crore in 2007-08.“Health insurance now accounts for 16 per cent of the total premium, against 2-3 per cent earlier. This year, health insurance is expected to grow by 50 per cent,” Mr Rao said.TPAs The insurance regulator will now also look at the IT efficiency of Third Party Administrators (TPA) before granting them licences.“TPAs should deal with claims more effectively. If a hospital bill is supported adequately by evidence then the claim should be immediately paid off,” Mr Rao said. – www.hindubusinessline.com