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February 9, 2014
Vehicle owners are likely to have to pay higher premiums for third-party motor insurance from the next financial year which begins on 1 April. .
The Finance Ministry has asked the Insurance Regulatory and Development Authority of India (IRDAI) to allow a bigger annual increase than usual in such premiums in the wake of huge losses suffered by general insurance firms. The goal is to prepare the country’s four state-owned general insurers for better valuations for disinvestment purposes, reported the Indian Express newspaper. .
General insurance companies face losses of INR40 billion (US$645 million) to INR50 billion in third-party motor insurance business. The chairman of a general insurance company confirmed that after being briefed on the losses in this line, Finance Ministry officials took up the issue with IRDAI. .
The insurance regulator sets the third-party motor liability tariffs. Though non-life insurers ask for a higher hike in the tariffs every year, IRDA only allows a moderate increase.