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ANNUAL REPORT 2011-12
standards in core business activities, enhancing
customer service standards, maintaining market
discipline and development of non-life insurance
market in a healthy manner. Besides the above
mentioned activities, the Secretary General had from
time to time represented the non-life insurance industry
in conferences / seminars / meetings of various forums,
viz., Federation of Indian Chambers of Commerce and
Industry (FICCI), Confederation of Indian Industry (CII),
Associated Chambers of Commerce and Industry of
India (ASSOCHAM), Insurance Institute of India (III),
Insurance Brokers Association of India (IBAI) and other
public initiatives in different cities as well as on the
various Committees constituted by IRDA.
II.6.5 The Secretary General also represented the
Industry’s view point and opinion on various matters
referred to the Council by different Ministries, viz.,
Ministry of Finance (Insurance Division and Revenue
Division), Ministry of Road Transport and Highways,
and Central Board of Excise & Customs (CBEC).
II.6.6 The Sub-Committee on Insurance and Pensions
of the Financial Sector Legislative Reforms Commission
(FSLRC) sought the industry’s views on their
questionnaire from the Council and gave the Council
an opportunity to meet the Committee members and
present the industry’s views.
II.6.7 FSLRC was constituted by the Government
of India, Ministry of Finance, vide resolution dated
24 th March, 2011 under the Chairmanship of Justice
(Retd.) B. N. Srikrishna.
The remit of FSLRC, as contained in its Terms of
Reference (ToR), comprises the following:
Review, simplify and rewrite the legislations
affecting the fi nancial markets in India, focusing
on broad principles
Evolve a common set of principles for governance
of fi nancial sector regulatory institutions
Remove inconsistencies and uncertainties in
legislations/Rules and Regulations
Make legislations consistent with each other
Make legislations dynamic to automatically
bring them in tune with the changing fi nancial
landscape
Streamline the regulatory architecture of fi nancial
markets.
II.6.8 Motor
The motor segment, which constitutes the biggest
market share, both in terms of Premium and
Claims, witnessed signifi cant activity during the
year under review.
The negotiations with various Transporters’
Associations were fi nally concluded and revision
in the Motor TP premium for all vehicles was
notifi ed by the IRDA with effect from 25 th April,
2011. One of the key features of these negotiations
was incorporation of an automatic provision in the
IRDA Order on Motor TP premium revision based
on a formula. The Authority implemented this
formula and revised the TP premium for all
vehicles with effect from 1 st April, 2012.
Although the current levels of the TP premium is
well below the break-even level for the portfolio,
the industry has accepted the revisions with the
expectation that the Authority would review the
position from time to time.
The Authority considered the industry’s request
on revision in Compulsory Deductibles, reclassification
of miscellaneous vehicles in
Commercial Vehicle section and increase in TP
premium for covering drivers, conductors, and
cleaners as per Workmen’s Compensation Act
coverage favourably.
II.6.9 Indian Motor Third Party Insurance Pool
(IMTPIP)
One of the signifi cant measures taken by IRDA
during this year was dismantling of IMTPIP on a
clean cut basis. The Council was part of the Sub-
Committee which had gone into the process of
dismantling the Pool as well as formation of the
Declined Risk Pool with effect from 1 st April, 2012.
The representation made by the Council and the
various discussions that followed with the
Authority as well as IRDA Standing Committee
on Accounting Issues (SCAI), resulted in IRDA
providing relief in terms of deferred accounting of
IMTPIP Outstanding loss reserves and solvency
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