Date:30/08/2004 URL: http://www.thehindubusinessline.com/2004/08/30/stories/2004083002251300.htm

Back Motor detariffing process — Insurers flay `piecemeal approach'

Our Bureau

Chennai , Aug. 29

INSURERS have expressed a wish to see the current de-tariffing motor insurance exercise cover the entire range of issues instead of a piecemeal approach.

At a seminar in the city, organised by the South India Purchase Association, Mr G.K. Raman, Chairman of Royal Sundaram Alliance, said about 40 per cent of the general insurance business is from motor vehicles.

The former Chairman of the Insurance Regulatory and Development Authority, Mr N. Rangachary, reinforced the importance of the current exercise. He said that reform here would bring competition into the area with maximum public reach.

Given the importance of the de-tariff exercise, Mr Raman said it should be extended to all sections of motor insurance. The current exercise is limited to introducing free pricing in underwriting "own damage" of motor vehicles.

"Third-party liabilities" would continue to be subject to the government's tariff.

A piecemeal approach would make it difficult for private sector players to respond appropriately to the changed environment, said Mr Raman. He added that even nationalised general insurance companies would eventually be hurt by piecemeal changes.

Mr S.V. Mony, Vice-Chairman of MP Sanmar Life Insurance, said third-party liability affected people outside of insurance. Many members of a panel he chaired did not share the insurers' views on the need for free pricing in all segments of motor insurance business, he added.