Irdai seeks to revise formula for fixing insurers' obligation for Motor TP

The regulator has asked for comments from stakeholders, which they have to submit by January 25

The insurance regulatory and development authority of India (Irdai) has come out with an exposure draft that seeks to revisit a 2015 regulation that fixes obligations for general insurers with respect to motor third party (MTP) business to achieve the larger goal of increasing MTP insurance penetration.

The reason behind revisiting the regulation is because the present formula does not indicate or monitor the penetration i.e. percentage of insured vehicles to total vehicles plying on the road. Further, it does not ensure increase in penetration under each category of vehicles and also does not address the treatment of long-term motor