Financial Daily from THE HINDU group of publications
Tuesday, Jul 02, 2002
Money & Banking - General Insurance
Logistics - General Insurance
Despite uncertainty due to HC stay Insurers implementing revised motor tariffs
Sarbajeet K. Sen
NEW DELHI, July 1
GENERAL insurance companies have started giving effect to the revised motor tariffs from Monday despite uncertainty over the impact of the stay granted by the Calcutta High Court on the implementation on the new tariff structure. The stay has been granted against a writ filed by the Asansol Mini Bus Association.
"As far as we are concerned, the Insurance Regulatory and Development Authority's (IRDA) directive that the revised rates would come into effect from July 1 stands," a senior executive of a public sector insurance company told Business Line.
He said that the company is currently in the process of forwarding the new rates formulated by the Tariff Advisory Committee (TAC) to its field offices for implementation.
Another insurance industry official said that the companies are bound to implement the revised rates as long as the IRDA does not officially declare that the new tariff structure should be kept in abeyance till the stay is vacated.
While the new motor tariffs have revised the insurance premia upwards for all category of vehicles, it has also brought in new categorisation of zones based on which the tariffs would differ from area to area.
Meanwhile, TAC officials are keeping their fingers crossed over the fallout of the legal tussle. They said that legal opinion sought by them suggests that if the final court order were related only to the reliefs sought in the prayers made by the Asansol association the applicability of the order would be limited to that body. This would allow the new tariffs to be made applicable to others.
However, they said that in the event the court passes a wider order, the new tariffs might have to be kept in abeyance. "We will have to wait for the final court order. We will do whatever the court orders tells us to do," a top TAC official said.
A section of the transport industry felt that the TAC is caught in a tricky situation. They said that even if the Calcutta High Court stay is given limited applicability, it could create problems for the implementation of the revised rates in other regions as well.
"It would be difficult for the IRDA and the TAC to implement the rates in other regions if there is a stay on its applicability on some of the transport operators since this would cause considerable disquiet among vehicle owners," a transport industry representative said.
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