Order issued by IRDAI in compliance with the direction of the Madras High Court Order in WP Nos. 64

• The matter shall be considered in its entirety and shall not be viewed in isolation, and any decision on the petition will have far reaching consequences on all the vehicles of the country that have issued such insurance policies.

• There are two distinct sections in a motor vehicle insurance policy:

There are two distinct sections in a motor vehicle insurance policy:

a. Third Party insurance (TP) (mandatory) covering liability to third parties.

b. Own Damage insurance (OD) (optional) covering damage, theft and loss to the vehicle itself.

• Section 146(1) of the Motor Vehicles Act, 1988 (“Act”) mandates the motor third party insurance for all motor vehicles.

Section 146(1) of the Motor Vehicles Act, 1988 (“Act”) mandates the motor third party insurance for all motor vehicles.

• As prescribed under Section 147(2) of the Act, only the Central Government can prescribe any modifications in such policies in consultation with IRDAI.

As prescribed under Section 147(2) of the Act, only the Central Government can prescribe any modifications in such policies in consultation with IRDAI.

• The coverage and pricing of third-party insurance is determined and notified only by the Central Government which did not provide any relaxation or variation in premium rates during the lockdown period.

The coverage and pricing of third-party insurance is determined and notified only by the Central Government which did not provide any relaxation or variation in premium rates during the lockdown period.

• Own damage losses can occur even when a vehicle is parked or stationary, and such damages are covered under own damage insurance policies.

Own damage losses can occur even when a vehicle is parked or stationary, and such damages are covered under own damage insurance policies.

• Any incidental or unauthorized uses of such vehicles could have happened, and insurers would still settle claims in such cases. Further, it is impossible to determine the actual uses of vehicles during such a period, while the buses may have been requisitioned by the authorities for any other purpose.

Any incidental or unauthorized uses of such vehicles could have happened, and insurers would still settle claims in such cases. Further, it is impossible to determine the actual uses of vehicles during such a period, while the buses may have been requisitioned by the authorities for any other purpose.

• In the Motor Insurance Policy premium is considered for entire period of motor insurance, irrespective of the level of risk, which may fluctuate during the entire duration of the policy.

In the Motor Insurance Policy premium is considered for entire period of motor insurance, irrespective of the level of risk, which may fluctuate during the entire duration of the policy.

• Insurance is a contract governed by its terms, and any refund or premium adjustment must align with those terms. During the COVID-19 lockdown, insurers received and settled claims, including for school bus losses, and continued to cover catastrophic events like floods and cyclones without charging additional premiums.

Insurance is a contract governed by its terms, and any refund or premium adjustment must align with those terms. During the COVID-19 lockdown, insurers received and settled claims, including for school bus losses, and continued to cover catastrophic events like floods and cyclones without charging additional premiums.

• Insurance products are designed to cover uncertain future events. Since neither the events nor their frequency can be known in advance, revising pricing based on these factors after the coverage period is neither possible nor appropriate.

Insurance products are designed to cover uncertain future events. Since neither the events nor their frequency can be known in advance, revising pricing based on these factors after the coverage period is neither possible nor appropriate.