Technical glitches hit motor third party data transfer

Insurers have so far uploaded only 50% documents on to the pool

The India Motor Insurance Pool (IMIP) created by the 12 general insurance companies is faced with its acid test with the companies yet to complete transfer of data on third party risks.

The National Insurance Company Chairman and Managing Director, Mr V. Ramasamy, said: “There are problems due to inconsistencies in software between the IMIP and insurers, but these are being addressed.”

So far only one PSU and two private sector insurers have completed the data transfer to the IMIP, sources said. Only about 4 lakh documents have been uploaded on to the IMIP. This is less than 50 per cent of the actual number on third party risks.

The IMIP is created by public and private sector non-life insurers exclusively to take over all the third party motor risks. The share of each insurer in the pool is on the basis of gross direct insurance premium collected.

Software mismatch

The mechanism is to be administered by the national reinsurer General Insurance Corporation. The delays are caused by both technical and administrative problems. Technical problems relate to mismatch between the software used by the pool and insurers. The pool functions on a TCS supplied platform. Three of the PSU insurers work on GenSys Enterprise Management. One PSU insurer and almost all the private sector insurers work on their own proprietary systems.

The sources said, some operational mechanisms envisaged when the pool was created, was yet to be put in place.

The mechanisms involve settlement of claims directly by the pool. However, with the delay in data transfer, the claims settlement function is yet to become fully operational. As a result, settlements are being delayed. Faced with this situation, insurers are directly settling the claims.

Mr Ramasaamy said: “We settle the claims directly and reimbursement from the IMIP.”

But reimbursements already face delays. This is because all the members are expected to participate in the settlement process on a pro rata basis. The reconciliation delays have also prompted the pool manager to threaten penal levies of 11 per cent. But the pool glitches have now attracted the attention of the Insurance Regulatory and Development Authority.

IRDA’s stern action

The General Insurers Council Secretary-General, Mr K.N. Bhandari, said: “The IRDA has asked for explanations. They are doing this regularly to ensure the success of the pool.”

This time the regulator has taken stiff line. It has convened a meeting of all the chief executives from the non life insurance companies next week to break the logjam.

Source: C. Shivkumar for The Hindu Business Line