In a major development, the Insurance Regulatory and Development Authority of India (IRDAI) has issued a notification for "Withdrawal of long term package cover offering both motor third party insurance and own damage insurance for three years of five years".

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

According to IRDAI, it has decided to withdraw long term package covers offered for 3 years or 5 years for new car and new 2 wheelers respectively with effect from 1st August, 2020.

As per the notification issued by IRDAI, "Pursuant to the decision of the supreme court in the matter of WP no. 295/2012 of Shri S. Rajaseekaran vs union of india and Ors, the authority issued circular ref: IRDAI/NL/CIR/MOT/13708/2018 dated 28th August, 2018, directing that all general insurers (except the stand-alone health insurers and the specialized insurers) shall offer only three year motor third party insurance policies for new cars and five year motor third party insurance policies for new two wheelers with effect from 1st September, 2018."

The notification adds, "The authority has reviewed the various options of long term and annual motor insurance covers now being offered to the prospects/policyholders pertaining to own damage."

Further, it says, "After a careful examination of the performance of the long terms package covers and the following concerns relating to its implementation since its introduction in September, 2018, the authority has decided to withdraw long term package covers offered for 3 years or 5 years for new car and new 2 wheelers respectively with effect from 1st August, 2020."

Earlier, on June 6,  the Insurance Regulatory and Development Authority of India (IRDAI) had asked insurers not to grant loan renewals or enhancements if the borrowers do not get the LEI code from the Legal Entity Identifier India Ltd. In a circular, IRDAI has asked insurers and others regulated by it to get the Legal Entity Identifier (LEI) code on or before July 31, 2020. The IRDAI also asked the insurers to advice their corporate borrowers having total exposure of Rs 50 crore and above to obtain LEI code on or before June 30, 2020 and provide the same.The Indian insurance regulator further said borrowers who do not obtain LEI code should not be granted loan renewals or enhancements and no new loans be sanctioned without the LEI code.