Insurers want no cap on discounts

MUMBAI: The general insurance industry is lobbying hard to ensure a completely free pricing regime. After the removal of tariffs in January this year, the insurance regulator — IRDA — had set a cap to limit the amount of discounts offered to customers to make sure the market did not witness a rampant slide in prices. While the cap on discounts for fire and engineering products was set at around 55%, the cap on discounts offered to customers purchasing the own damage motor insurance cover was set at 20%. If the regulator lifts the caps, players may well end up offering more discounts to customers. Heads of the general insurance firms are going to meet IRDA to discuss this on June 11. General insurers feel that instead of the regulator monitoring prices, it should only focus on monitoring the solvency of companies. Instead, companies should be allowed the freedom of fixing prices based on their individual claims experience and underwriting guidelines.
Source: Times News Network