IRDAI forms motor insurance transparency panel


As per reports, a motor insurance transparency panel has been formed by IRDAI and this committed will be headed by a senior IRDAI official and comprise members from the automobile industry and insurance companies.

 

In what is being acknowledged as a key move, insurance regulator IRDAI announced the setting up of a seven member committee on Friday. This committee will be suggesting ways and means to bring about greater transparency in payouts made to automobile dealers by insurers for garnering motor insurance business. The committee will be spearheaded by a senior official of the Insurance Regulatory and Development Authority of India or IRDAI and this will comprise of members from the automobile industry and insurance companies.

 

The IRDAI has proposed this move to bring about greater transparency and clarity with regard to all payouts made to automobile dealers by insurers for getting motor insurance business and hence the setting up of the panel. This panel will be studying existing industry practices on payouts which are also sometimes labeled as infrastructure expenses that are made to motor dealers and will also examine any deviations from the prevalent norms. Alignment with the Insurance Act has also been sought along with guidelines on outsourcing and provisions for expenses of management. Other terms of reference for the committee include greater uniformity and transparency, designing of standard formats for dealer and insurer agreements and other recommendations on draft guidelines.

 

The committee will submit a report within a couple of months. As per reports, the Finance Ministry had issued summons to 16 insurance companies and was also investigating the agreement between insurers and car manufacturers for availing of CENVAT credit ranging between Rs. 1200 to 2500 crore. Investigations under summons against 16 insurance companies had been conducted by the Chennai Zonal Unit of the Directorate General of Central Excise Intelligence.

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