IRDAI (Insurance Regulatory and Development Authority) will be launching a pilot project in a move to drive awareness campaign. IRDAI chairman S C Khuntia said that the upcoming project will help the insurance companies in improving their premium collections. IRDAI has also roped in four state governments for this project. "We are working with four state governments on a pilot project on how to contact the owners of the motor vehicles that are not insured and send communication to them that they come and renew," Khuntia said the inaugural session of an insurance and pension sector event organised by CII.
He, however, did not mention the names of the four states. It is mandatory under the Motor Vehicle Act to have third party insurance. Traditionally, motor vehicles have been a segment which used to give about one-third of the premium but this year there is a little bit of difficulty as there has been concerned about the sale of automobiles, he said. "I hope with the government support the automobile sector will also improve its sales in the near future," Khuntia said. On DHFL case, he said insurance companies have been allowed to be part of Inter Creditor Agreement (ICA).
He said the life and general insurance subsidiaries of DHFL do not have solvency issue. "We will ensure that the solvency is right. If solvency is not right then we will have to take regulatory action. As of now, there is issue with the solvency margins," he said. Troubled DHFL has two insurance subsidiaries - DHFL Pramerica Life insurance and DHFL General Insurance. The general public must be made aware about the benefits of pure term insurance. "People mix term insurance product with savings product and compare with products like mutual funds or fixed deposits in the banks. We need to create awareness of the nature of this product," he added.