Transporters have demanded an immediate rollback of the more than 70% rise in third-party insurance premium that came into effect from April 25. Close to 70 lakh truck and bus operators have threatened to go on strike if the Insurance Regulatory and Development Authority (Irda) fails meet their demand within a week.
Third-party insurance is one in which the insurance company agrees to indemnify the insured person if he is sued or held legally liable for injuries or damage done to a third party.
The insurance regulator had issued a notification on April 15, increasing the premium charged by general insurance companies for providing third-party insurance policy to motor vehicle owners. The hike was made to offset losses caused to insurance companies due to frequent claims by transporters.
While the hike in premium was first in last five years, the regulator said that from now on premium would be revised every year based on insurance claims and general inflation rate.
In response to the hike, All India Motor Transport Congress (AIMTC), which has 70 lakh unorganised truck and bus operators and 1.6 lakh transport companies under its fold, has asked Irda chairman J Hari Narayan to review the decision.
Referring to discussions with Irda officials on the subject before the notification was issued, AIMTC president GR Shanmugappa said in a letter to Narayan that ?we had represented the consent (of transporters) to see if any loss can be compensated by reasonable and judicious raise in the premium, but it seems this has been overlooked while releasing this notification?. He added that ?on the face of it the hike is unacceptable?.
?The increase in premium rates will cause a financial outgo of close to R1,000 crore to transporters. To avoid this, we have demanded an immediate call back of the Irda decision. If our demand is not accepted within a week, we will go on a nation-wide strike,? Shanmugappa told FE. ?The step was not required at this point as private insurance firms are already making huge profits on motor vehicle insurance,? he alleged.
AIMTC representatives also met senior officials in road transport and highway ministry on April 21, demanding it to take the issue to finance ministry. ?We are aware of the issue and have assured the transporters of appropriate action from our side,? a senior official in road ministry said.