A working group constituted by the insurance regulator has recommended the setting up of a non-profit company to reduce insurance losses arising from property and motor-related liabilities for the industry.
The ten-member committee headed by Irdai member T L Alamelu has recommended the regulator and industry participants to join hands in establishing this company.
The committee which has representations from the regulators, insurers, experts and brokers was constituted in December of 2019 to study various risks and losses suffered by companies insuring property and motor-related losses.
“The Company should liaise with Government and other relevant agencies to achieve its objectives” of minimizing losses and promoting safety, the committee report released on Tuesday said.
Irdai has asked industry stakeholders for suggestions on the recommendation before taking action on it, it said in a press release.
The proposed company could be mandated to capture experience and knowledge to capture various risk elements that contribute to insurance risks especially arising out of natural disasters, shipments, road mishaps among others.
“The Company may also set standards and benchmarks for various activities from the insurance perspective,” as per the report. However, the company cannot directly get involved in commercial activities such as risk inspection and management.
The committee has also suggested that the proposed company could subsequently also expand to the areas of health and general insurance as well, with a broader perception once the full-term effects of the pandemic also plays out.
“The Company should collaborate with bodies such as Insurance Information Bureau of India as well as with various academic institutions, bodies dealing with insurance education and build synergies,” as per the recommendation report.’
Source: Economic Times