Prelims level : Economics Mains level : GS-III Technology, Environment, Disaster Management, Economic Development
No Set Found with this ID

Why in News:

  • Insurance regulator IRDAI proposed an increase in third party (TP) motor insurance premium rates for various categories of automobiles from cars, two-wheelers and school buses to trucks.


  • The upward revision proposed for cars is in excess of 14% — for two-wheelers it is up to 21.11% and public goods carriers (trucks) over 11%. The increase recommended for school buses is 5.29% in basic rate and 5.34% per licensed passenger.
  • However, there will be no change in the long-term premium rates for new cars and two- wheelers — such covers come for three years in the case of new cars and five years for new two-wheelers. By issuing an exposure draft for the current fiscal (2019-20), the Insurance Regulatory and Development Authority of India (IRDAI) on Monday put to rest any expectations on continuing with the existing premium rates.
  • Usually, the new rates come into force on April 1. It is preceded by an exposure draft that is placed in the public domain seeking comments.
  • The revision proposed in the draft generally becomes the final tariff.


  • Insurance Regulatory and Development Authority of India or the IRDAI is the apex body responsible for regulating and developing the insurance industry in India.
  • It is an autonomous body. It was established by an act of Parliament known as the Insurance Regulatory and Development Authority Act, 1999.
  • IRDAI is headquartered in Hyderabad in Telangana. Prior to 2001, it was headquartered in New Delhi. The organization fought for an increase in the FDI limit in the insurance sector to 49% from the previous 26%.
  • The FDI cap was hiked to 49% in July of 2014.
  • Its primary purpose is to protect the rights of the policyholders in India.
  • It gives the registration certificate to insurance companies in the country.
  • It also engages in the renewal, modification, cancellation, etc. of this registration.
  • It also creates regulations to protect policyholders’ interests in India.
Share Socially