Transporters drop strike call on Irda assurance on lower premium

New Delhi, Jan 22 | Updated: Jan 23 2007, 07:49am hrs
Transporters on Monday called off their proposed nationwide strike protesting against the steep rise in third party insurance rates as regulator Irda decided to substantially slash the increased premium rate.

The All India Motor Transport Congress called off its proposed nationwide 'Trade Bandh', earlier proposed for January 25, an official release said here.

Irda will partially roll back the hike in third party motor insurance premium from 150% to 70%. A 70% increase over the original premium would be effected... the notification in this regard will be announced tomorrow, Irda chairman C S Rao told PTI. With the announcement, the premium rate would come down to about Rs 5,000-Rs 6,000, compared with the earlier Rs 8,000-9,000, providing relief to transporters.

Beginning this year, the third party premium rate was increased by 126-150% and a common pool was created. The partial roll back decision was taken in a meeting of the transporters with representatives of the ministry of finance and ministry of surface transport on January 18.

Third-party insurance provides compensation to persons other than the owner of a vehicle and is a part of comprehensive motor scheme. The other component of motor insurance is own damage insurance which covers owner and vehicle. It has been detariffed from January 1 this year.

All India Motor Transport Congress called off the strike after finance minister P Chidambaram limited the increase of third party premium rates of commercial vehicles, the release said. Third Party Insurance has been a non-profit making business for insurers and with this partial roll back there would certainly be pressure on the company to compensate the loss from some other segment, said a senior official of Tata AIG General Insurance.