IRDAI panel for introducing a new points-based Traffic Violation Premium
Traffic violations may soon become a costlier affair for vehicle owners with a working group of insurance regulator IRDAI recommending for introduction of a new section in motor insurance called Traffic Violation Premium.
It will be in addition to Own Damage, the mandatory Third Party, additional TP and compulsory personal accident premium. This section can be attached to any motor insurance cover being purchased, chiefly, OD or TP insurance, the Working Group’s report said. The Traffic Violation Premium will be linked to a system of penalty points accumulated by the vehicle for every traffic violation. It will come into play at the time of renewal of the insurance cover and not applicable for new vehicles. Whenever a motor insurance buyer approaches general insurers for cover, whether OD, TP or comprehensive package, he or she will be assessed for the traffic violation points and traffic violation premium that needs to be paid.
The premium will be “payable by the registered owner of the vehicle, whether an individual or an entity. Effectively this means that the owner will take full responsibility for the traffic violations caused by authorised vehicle driver,” the report said.
The working group, whose members were officials of Delhi Traffic Police, IRDAI, Insurance Information Bureau of India (IIB) and general insurance companies, came up with the recommendations in the backdrop of the Intelligent Traffic Management System proposed by the Centre. Among other aspects it considered international practices on linking motor insurance premium with traffic violations; the legal and regulatory framework governing motor insurance in the country; and types of traffic violations, penalties and its categorisation.
The recommendations, which include initiating a pilot project in Delhi that will also involve vehicles from other parts of the country in the national capital, are aimed to serve as a deterrent for reckless motor drivers. The report is based on the fundamentals of sharing of data. The IIB will coordinate with various States Traffic Police and National Informatics Centre to capture the traffic violation data, calculate violation points of each violating vehicle and make this information available to all general insurers through IT system integration with insurers. Placing the report in public domain, IRDAI has invited inputs from the stakeholders.
News source:-https://www.thehindu.com/news/cities/Hyderabad/higher-insurance-premium-on-cards-for-vehicles-violating-traffic-rules/article33603434.ece
