The Indian insurance sector is gearing up for a major overhaul as the Insurance Regulatory and Development Authority of India (IRDAI) lays the groundwork for greater pricing freedom for general insurers.
A special task force has been set up to draft a new set of guidelines aimed at reshaping the way motor insurance, particularly third party (TP) cover, is priced.
According to The Hindu, the strategic move comes as the IRDAI considers the proposals of a task force focused on drafting a new regulatory framework that will come into effect after the de-notification of existing tariff systems.
In anticipation of this change, the IRDAI task force, headed by Insurance Advisory Committee member Rajendra Beri, will develop principle-based guidelines to manage the transition. The panel, comprising members from six general insurance companies and one reinsurer, and headed by Randip Singh Jagpal, has been given three weeks to come up with its recommendations.
The imminent move to a deregulated regime is seen by industry experts as a welcome step towards more dynamic pricing models. It is also in line with IRDAI’s recent reform path, which promotes a more liberal environment where insurers can introduce new products through a simplified application process rather than seeking prior approval.
Elsewhere in the country, Zurich Insurance Group recently announced the proposed acquisition of a 51% stake in Kotak Mahindra General Insurance as part of a strategic collaboration with Kotak Mahindra Bank to enter the general insurance sector in India.
