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Ref. No:IRDA/NL/NTFN/MOTP/060/03/2015 Date:28-03-2016
Premium Rates for Motor Third Party Liability Insurance Cover for FY 2016-17
The Authority hereby refers to its notification no. IRDA/NL/NTFN/MOTP/066/04/2011 dated 15th April 2011 whereby the Authority decided to review the premium rates for motor third party insurance covers annually using the specified formula:
 
P (t) = C1 (t) * CII (t-1) + C2 (t)
Where,
P (t) is the motor TP premium applicable to the financial year‘t’,
CII (t-1) is the Cost Inflation Index for the year ‘t-1’ as notified by CBDT, and
C1 (t) and C2 (t) are the parameters applicable to the financial year ‘t’ whose values shall be determined and notified by the Authority in each financial year based on the experience measured in terms of average claim amounts, frequency and expenses involved in servicing the motor TP business. The values of the parameters C1 (t) and C2 (t) may vary according to the class of vehicle.
 
It is observed that the cost inflation index (CII) has increased by 5.57% over the previous year, i.e. from 1024 in FY 2014-15 to 1081 in FY 2015-16.
 
Accordingly, the Authority issued an Exposure Draft on 04th March 2016 on revision of premium rates for motor third party insurance covers for the FY 2016-17 inviting comments on the proposed rates from all stakeholders concerned. The exposure draft published data provided by Insurance Information Bureau ((IB) of India which includes number of policies, number of claims paid and amount of claims outstanding as on 31st March 2015 for each underwriting year and for each class of vehicle. The methodology used in estimating premium rates and also the various factors considered in moderating the actual derived premium rates were also explained briefly in exposure draft. 
 
The Authority examined the comments/ suggestions received from various stakeholders on the draft exposure. Some stakeholders expressed the view that minimum increase in the premium rates should be the increase in Cost Inflation Index (CII) over the year. However, the Authority decided not to increase the proposed premium rates in such cases and keep the premium as proposed in the exposure draft.
After examining the comments, the Authority decided to revise the premium rates as proposed in the exposure draft in the following classes:
a.    Private Cars – Not exceeding 1000 cc
b.    Private Cars – Exceeding 1000 cc but not exceeding 1500 cc
c.    Special Types of Vehicles – Other Miscellaneous & Special types of vehicles
 
In accordance with the above, and in exercise of the powers vested in the Authority under Section 14 (2) (i) of the IRDA Act 1999, the Authority hereby notifies the premium rate applicable to the Motor Third Party Liability Insurance covers with effect from 01st April 2016 as given in the Annexure “A”.
 
Insurers are advised to be mindful of the concerns expressed by vehicle owners about both the rates and availability of insurance. Considering the mandatory nature of motor third party insurance, insurers are advised to ensure that motor third party insurance is made available at their underwriting offices and through all available channels of distribution. The Authority will treat any complaint of non-availability of insurance or use of methods to deny/ delay the client seeking the insurance cover, seriously.
 
Insurers are not permitted to cancel the current insurance policies and issue fresh policies to effect new premium rates. This notification as well as enclosed schedule of premium rates shall be prominently displayed on the Notice Board of every underwriting office & the website of the Insurers where it can be viewed by the public. This notification is issued in supersession of the Authority, earlier notification ref: IRDA/NL/NTFN/MOTP/054/03/2015 dated 31st March 2015.
 
 
 
 
Suresh Mathur
Senior Joint Director

 
 
 
 
 
 
Annexure "A"
Motor Third Party Insurance Premium with effect from 01st April 2016
 
 
Premium with effect from 01st April 2016 (Rs.)
 
Private Cars 
 
Not exceeding 1000 cc
2,055
 
Exceeding 1000 cc but not exceeding 1500 cc
2,237
 
Exceeding 1500 cc
6,164
 
Two Wheelers 
 
Not exceeding 75 cc
569
 
Exceeding 75 cc but not exceeding 150 cc
619
 
Exceeding 150 cc but not exceeding 350 cc
693
 
Exceeding 350 cc
796
A1
Goods Carrying Vehicles Public Carriers (other than 3 wheelers) 
 
GVW not exceeding 7500 kgs
14,390
 
Exceeding 7500 kgs but not exceeding 12000 kgs
15,365
 
Exceeding 12000 kgs but not exceeding 20000 kgs
22,577
 
Exceeding 20000 kgs but not exceeding 40000 kgs
24,708
 
Exceeding 40000 kgs
25,800
A2
Goods Carrying Vehicles Private Carriers (other than 3 wheelers) 
 
GVW not exceeding 7500 kgs
7,849
 
Exceeding 7500 kgs but not exceeding 12000 kgs
11,528
 
Exceeding 12000 kgs but not exceeding 20000 kgs
9,390
 
Exceeding 20000 kgs but not exceeding 40000 kgs
12,821
 
Exceeding 40000 kgs
16,655
A3
Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Public Carriers 
 
except e-carts
5,680
 
e-carts
3,969
A4
Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Private Carriers 
 
except e-carts
4,200
 
e-carts
3,438
B
Trailers 
 
Agricultural Tractors upto 6 HP
510
 
Other vehicles including Miscellaneous & Special Type of Vehicles (Class-C), (For each trailer, for more please multiply by no. of trailers)
1,307
 
 
Premium with effect from 01st April 2016 (Rs.)
D
Special Types of Vehicles 
 
i)   Pedestrian controlled Agricultural Tractors with Horse Power rating not exceeding 6HP, Hearses and Plane Loaders 
897
 
ii) Other Misc & Spl types of vehicles
3,822
 
 
 
E
Motor Trade (Road Transit Risks) 
 
i)   Distance not exceeding 2400 kms
1,088
 
ii) Distance exceeding 2400 kms
1,308
 
 
 
F
Motor Trade (Road Risks) (Excluding Motorized Two Wheelers) – (Named Driver or Trade Certificate) 
 
1st named driver or certificate
985
 
For additional drivers/ certificates up to 5 (per driver/certificate)
476
 
For additional Drivers/ Certificates exceeding 5 but not exceeding 10 (per driver/ certificate)
307
 
For additional Drivers/ Certificates exceeding 10 but not exceeding 15 (per driver/ certificate)
266
 
 
 
F
Motor Trade (Road Risks) (Motorized Two Wheelers) – (Named Driver or Trade Certificate) 
 
1st named driver or certificate
530
 
For each additional Driver/ Certificate
264
 

 
 
 
Premium with effect from 01st April 2016 (Rs.)
 
 
Basic TP Premium (A)
Premium (per licensed passenger) (B)*
C1a
Four wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers 
 
Not exceeding 1000 cc
6,396
1,230
 
Exceeding 1000 cc but not exceeding 1500 cc
8,408
1,035
 
Exceeding 1500 cc
11,144
1,183
 
 
 
 
C1b
Three wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers 
 
except e-rickshaw
1,733
829
 
e-rickshaw
1,125
538
 
 
 
 
C2
Four or more wheeled vehicles used for carrying passengers with carrying capacity exceeding 6 passengers for hire or reward
10,294
629
 
 
 
 
C3
Motorized three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 6 passengers but not exceeding 17 passengers
4,155
829
 
 
 
 
C2
Three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 17 passengers
10,294
629
 
 
 
 
C4
Motorized Two wheelers used for carrying passengers for hire or reward  
 
Not exceeding 75 cc
702
473
 
Exceeding 75 cc but not exceeding 150 cc
702
473
 
Exceeding 150 cc but not exceeding 350 cc
702
473
 
Exceeding 350 cc
1,615
473
{*: TP Premium is the total of a basic Amount (A) plus an amount derived by multiplying the Licensed carrying capacity by the amount in (B)}
 
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