Case Code : CLMISC007
Publication date : 2008
Subject : Miscellaneous
Industry : -
Length : 03 Pages
Price : Rs. 100
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Insurance Regulatory Authority of India (IRDA), General insurance, Detariffing, Cross subsidization, Customized policies, Insurance coverage, Engineering Insurance, Fire insurance, Motor Insurance, Foreign Direct Investment, Free Pricing, Health Insurance, International ratings, Non-Life Insurers, Insurance premiums, Price wars, Premium anomalies, Partial detariffing, Reinsurance placements, Risk Management, Solvency ratios, Tariff Free Regime, Tariff advisory Committee (TAC), Rule-based underwriting
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In 2005, the Insurance Regulatory Development Authority of India (IRDA) had announced that general insurance products (non-life insurances) would be brought under a tariff-free regime with effect from January 2007. Detariffing would allow companies to fix the premiums for the insurance products they offered based on their own analysis and perception of the risk involved in each case, without governmental regulation. This caselet discusses the possible impact of detariffing on the different segments in the general insurance sector, like motor insurance, engineering insurance, fire insurance and workmen compensation insurance. It was expected that detariffing would lead to better risk management practices and eliminate cross subsidization in the industry. The different advantages of detariffing to the insurance companies and the customers are discussed in the caselet. The caselet also talks about some of the hiccups the insurance industry could witness before a tariff free regime becomes the norm.
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