This long-standing demand has been prompted by the tardy tariff revision process and sluggish introduction of new products. Sources in the sector said the need for a revision has been felt for a long time. The tariff committee lacks initiative to introduce cover policies under the general insurance scheme, they said.
The panel employs obsolete methods and does not incorporate any new insurance covers, insurance sources said. Companies have shot off several letters to the committee, suggesting the various cover schemes that could be introduced, butm there has been no response.
According to reports, the tariff management committee had in 1987 announced that tariffs on insurance would be reviewed every five years, but nothing was done about it.
Old tariff rates continue to exist and no new policies were formulated. As a result, tariff rates in India is 200 per cent higher than the rest of the world. The total premium income generated in the country has been $2 billion. And it is not expected to grow beyond $ 5 billion, if tariff rates are not changed soon, sources said.
Insurance companies want the tariffs reduced and the number of risks covered to improve premium incomes.
This will lower claims ratio as the risk will be spread. The general insurance companies have asked for representatives of users to be inducted into the board of tariff committee to make services more effective.
The general insurance sector wants the tariff panel to introduce an all-risk policy.
This, along with other covers like the catastrophe insurance cover, omnibus insurance cover, the high deductibles cover and the first loss cover, have not been considered by the panel. Neighbouring countries like Sri Lanka, Bangladesh and Pakistan possess comprehensive risk policies.
Besides India, Rwanda and Burundi are the only other countries that have not introduced any reforms in the insurance sector, with most sections still controlled by the government.
Officials said the tariff committee has failed to serve the purpose for which it had been set up
