Third party motor policy’s turnaround

UNTIL RECENTLY general insurers would not issue third party motor polices in respect of commercial vehicles. While the private sector players bluntly said no, their public sector counterparts did so mostly covertly. This warranted designing a new mechanism to manage third party claims arising from insuring commercial vehicles. The insurer is permitted to retain 10% of the premium collected as service charges and the balance is credited to the said pool account. The smaller players are incentivised to underwrite more and more of these policies since their contribution to claim payout is lower on account of their lower market share.  Apart from hiking the insurance premium and raising the floor on the sum insured, insurers have placed a cap on doctor’s fee, room rent, reimbursement of expenses incurred towards anaesthesia, blood, oxygen, operation theatre, etc.  This led to the government banning futures trading in wheat and pulses.  Meanwhile, Indian Institute of Management (IIM), Bangalore commissioned by the Forward Markets Commission (FMC) to study the impact of futures trading on prices of agricultural commodities and other aspects of futures market has already come out with an interim report. 

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