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ICICI Lombard Expert Blog
 

General Insurance Premium to Increase from April 1

March 26 2017
General Insurance Premium to Increase

You may be aware that enhanced third party motor insurance rates will come into effect from April. Now, thanks to a go-ahead from Insurance Regulatory and Development Authority of India (IRDAI), premiums for motorcycle, car and health insurance will also increase from April 1.

This increase in price is because of the approval given by IRDAI to insurers for revision in commission to agents. However, the changes in premiums will not be more than +/- 5% of the existing rates for products/add-ons. The IRDAI (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016, will come into force from April 1, 2017, and is also a step towards the introduction of a rewards system.

The approval from IRDAI will act as a trigger for insurance companies to revise product pricing. The insurance authority also specified that, for companies who wish to revise product pricing, can do the same without making any modifications to the product under the Product Filing Guidelines. In a notification sent to the top brass of insurance companies, IRDAI stated that modifications should only be limited to the changes in commission and the reward system, with all other parameters being the same as before.

Adding to the instructions already mentioned, the insurers will also be required to furnish a certificate which says that “there is no detrimental change” in premium rates or any other provision of policies that are already accounted for. The notification makes it clear that the certificate in question should be signed by the CEO and appointed actuary stating that, "It is certified that there is no other change in approved F&U and U&F application and other documents apart from changes mentioned therein."

Also Read:

Healthcare to Grow by 14% in Next Five Years, Says ICRA
Health Cover of ₹1 Crore Is the New Norm in the Industry

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