Declined motor risk pool deadline set for Jan '07

GENERAL INSURANCE INDUSTRY BRACES UP FOR DETERIFF REGIME

The Insurance Regulatory and Development Authority of India (Irda) is planning to advance the setting up of the declined motor insurance pool.

The proposed pool will typically ensure that no vehicle having a valid registration and permission to ply on the roads goes without an insurance cover.

This means that the pool will provide cover to those vehicles that have been denied insurance cover by insurance companies.

C S Rao, chairman of Irda, said, "Our earlier target for setting up the declined motor insurance pool was January 1, 2007. We would, however, like to advance it by a couple of months as we would also like to experiment with it."

He spoke to mediapersons on the sidelines of the K L N Prasad Memorial Lecture on Indian insurance industry - post-liberalisation landscape.

Based on the suggestion of the Irda, the general insurance council has created two sub-committees to monitor the preparedness of insurers to meet the challenges of a detariffed regime and to work out the modalities for creation of the declined motor insurance pool.

Meanwhile, the regulator also expects that another three to four life insurance companies to set up their operations in India, in this financial year. This will take the total number of life insurers in the country to around 18 from the present 15.

"India is viewed by many multinational insurance companies as a vast market waiting to be tapped. They have great expectations from the market and are willing to invest and wait for the returns to flow," Rao added.

This includes global insurers such as AXA and Sampo which have already initiated steps in this direction.