Chennai, July 3 (IANS) A key panel on the non-life insurance sector will be meeting in Hyderabad Wednesday to discuss the issue of an upward revision in health and motor insurance premium rates.
Members of the General Insurance Council of India will also chalk out a strategy to convince the Insurance Regulatory and Development Authority (IRDA) regarding its concerns on these and various other issues concerning the industry.
"A meeting of the General Insurance Council has been convened in Hyderabad tomorrow (Wednesday). Apart from other routine matters, the major issue that would be discussed at the meeting is the need for an upward revision in health and motor insurance premium rates at least to cover the inflation," an industry official told IANS, preferring anonymity.
At a time when the premium rates for all other insurance products have been detariffed or freed, it is still a wonder as to why the IRDA wants to retain a say in respect of health and motor third party insurance covers.
According to industry officials, the IRDA permits an insurer to revise its health insurance premium once in three years.
"While the annual medical inflation is around 15 percent, the insurers suffer from inadequacy of premium and in three years a product becomes unprofitable. At the macro level, the question is whether the health and motor insurance premium to be decided by administrative fiat of the regulator when it is market play in respect of other lines of business," the official remarked.
Similarly, in respect of motor third-party insurance, the companies start selling their policies with a premium deficit of around 40 percent while the loss ratio is more than 100 percent.
Despite repeated attempts by IANS, IRDA member (non-life) M.Ramprasad was not available for comment.