annual report 2008-09 - IRDA

ANNUAL REPORT 2008-09
PART II
REVIEW OF WORKING AND OPERATIONS
(i) Regulation of Insurance and re-insurance
companies
a. Collection of information pertaining to premium,
claims offices of general insurance companies
In order to undertake meaningful analysis of the
functioning of the general insurance companies and
improve off-site monitoring, the IRDA prescribed the
following formats for submission by the companies:
quarterly submission of a) state-wise gross direct
premium, b) claims reported, c) channel-wise gross
direct premium, d) segment wise Incurred claims, e)
claims performance f) ageing of claims, and g) office
details.
b. One Page Motor Policy
As part of the steps taken by the Authority to improve
efficiency in the general insurance business and to
reduce administrative costs, the Authority permitted
insurers to issue a one page Motor policy without
attaching detailed terms and condition subject to the
following conditions:
1. motor certificate of insurance/ cover note shall
continue to be used in physical form as stipulated
in the Motor Vehicles Act
2. A one page motor policy in physical form can be
issued to a policyholder who explicitly agrees to
receive such a policy
3. every insurer shall have a robust web-site
enabling access to policyholders who wish to
know the terms and conditions.
4. as and when standard terms and conditions
placed on the web-site are allowed to be
modified, the earlier version(s) shall also be made
available on the web-site for access.
5. where an insured requires a complete set of
policy in physical form, he shall be issued a
complete set with all the clauses and conditions
attached, free of cost.
6. where the coverage terms are in any manner
different from the standard terms and conditions
placed on the web-site, the policy shall be issued
in full physical form only.
7. notwithstanding the standard conditions placed
on their web-site, insurer shall abide by the
provisions of Indian Stamp Act.
c. Revision in limits on payment of commission
or brokerage on general insurance business with
effect from 1 st October 2008
The Authority revised the commissions and brokerage
payable to agents and brokers consistent with the
market developments after detariffing. It directed the
general insurers that the percentage of premium paid
by way of commission or brokerage on a general
insurance policy shall not exceed the percentages of
premiums as set out below:
S. No. Class of Business Maximum percentage of premium
payable as agency commission or brokerage
(% of final premium excluding service tax)
Agency Commission Brokerage
1. Fire, IAR and Engineering insurances
i. General 10% 12.5%
ii. Risks treated as large risks under
para 19(v) of File & Use Guidelines 5% 6.25%
2 Motor insurance business (OD portion), WC/EL
& statutory Public Liability Insurance 10% 10%
3 Motor Third Party insurance Nil Nil
4 Marine Hull insurance 10% 12.5%
5 Marine Cargo business 15% 17.5%
6 All other businesses 15% 17.5%
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