IRDAI mulls idea to link your insurance premium to traffic violations
A High Powered committee has requested IRDAI to examine the establishing of a system of linking of motor insurance premium with traffic violations.
New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) is mulling idea to examine the issue of linking insurance premium with traffic violations.
This comes against the backdrop of a High Powered committee for traffic management in Delhi under chairmanship of Union Home secretary requesting the insurance regulator to examine the establishing of a system of linking of motor insurance premium with traffic violations.
IRDAI has now decided that a Working Group will be formed to implement the premium escalation formula.
The 9-member working group will headed by Anurag Rastogi, Chief Actuary & Chief Underwriting Officer, HDFC Ergo General lnsurance Co Ltd.
The terms of reference of the Working Group will be to recommend implementation framework and methodology to link insurance premium with traffic violations.
The working group will study international practices on the above subject and recommend best practices suitable to India. It will also evaluate the current point system for traffic violations implemented by states and evolve standard point system considering each traffic violations.
The working group will develop data fields required to implement traffic violations as rating factor in Motor insurance, suggest system of access to traffic violation history data of each vehicle and transfer of data from enforcement authorities to IIBI database; and suggest modalities for carrying out an immediate pilot project in Delhi.
IRDAI said that the working Group shall submit its report within two months.
ICICI Lombard Chief - Underwriting and Claims, Motor and Health, Amitabh Jain told Zee News, that several countries follow the pattern of linking insurance premium to one's driving. Jain said if rates of accidents come down, the rate of claim settlements by insurance companies will also reduce. This will benefit all the stake-holders, Jain said, adding that the insurance linkage should first begin with bigger cities.