De-Tariffication

As previously reported, the Indian general insurance market is in the midst of a transition from a tariff based regime to a more market driven system. To this end, the Indian insurance market regulator (IRDA) announced in December 2006 that rates for tariffed products would be freed as of 1 January 2007.

Under the original plan, the Tariff Advisory Committee mandated policy wordings (insuring clause, terms, conditions, clauses, warranties, etc) would have to be used until 31^st March 2008. After the date, the intention was for policy wordings to be freed as well.

Following de-tariffication, the first steep premium rises were seen in third party rates for motor policies. It was reported that transporters were being asked to pay 126-150% more for third party cover. Transporters threatened a nationwide strike and, on 23 January 2007, the IRDA stepped in to regulate the motor rates that could be charged by