Exposure Draft
|
Ref. No: IRDA/NL/MTP/2020-21/EXDRF |
Date: 05-03-2020 |
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Exposure Draft on Revision in Premium Rates for Motor Third Party Insurance Cover for the Financial Year 2020-21 |
1.
By virtue of powers vested
in the Authority under Section 14 (2) (i) of the IRDA Act, 1999, the Authority
has been notifying the premium rates applicable to Motor Third Party (TP)
Liability Insurance, every year, starting from 2011.
2.
The Motor Third Party rates
proposed by IRDAI for the year 2020-21 (ending 31st
March, 2021) for various categories of vehicles, which shall come into force from
the date to be notified, have been arrived at as follows:
I.
Data source and Data used:
1. The
data provided by the Insurance Information Bureau of India (IIBI) has been used
for arriving at the Motor TP premium rates.
2.
The claims paid data in respect of
each of the accident
years starting
from the year 2011-12 up to 2018-19 has been considered, taking into account the combination of 'Class Code'
and 'Vehicle CC/PCC/GVW' Code.
3.
Gross
Written Premiums for the FYs 2011-12 to 2018-19 have been considered.
II.
Basic Methodology
1. Paid claims data has been considered for
construction of cumulative paid claims triangle for each homogenous subclass
with Accident Year (AY) as origin year and Financial Year (FY) as development
year.
2. The ultimate claims cost for each accident
year has been estimated using the actuarial technique of Basic Chain Ladder
Method applied to cumulative paid claims data.
3. Age-to-Age-factors (ATAFs) for each Accident
Year (AY) and Development Year (DY) have been calculated. Development factors
were selected after considering various averages of ATAFs: simple average of
all years, volume weighted average, average of last 3 years, average of last 5
years and highest of all the averages.
4. The
oldest Accident year has eight years of development which is insufficient for
complete settlement of claims as Motor Third Party is long tailed liability
business. A tail factor has been assumed for all the categories of vehicles for
the complete run off of the claims paid. Losses for each AY are projected using
BCL and an assumed tail factor was applied to arrive at the Ultimate Claim
amounts.
5. The financial year-wise Gross Written Premium
has been converted to financial year wise Gross Earned Premium (GEP) by
applying the formula:

6. Ultimate Loss Ratio (ULR) for each Accident
year is calculated as Ultimate Claims/Gross Earned Premium

7. Average Premium from Data for each financial
year was calculated as Gross Earned Premium / Exposed Policies where, exposed
policies are derived from number of policies using a similar approach as under
the above para 5.
8. Burning Cost (BC) per policy for each
Accident year was computed by multiplying Ultimate Loss Ratio and Average
Premium as calculated under the above paras 6 and 7 respectively.
9. By considering the projected Burning Cost and
loading it with appropriate expenses, Premium rates for the FY 2020-21 have
been derived.
10. The actuarial rates have been arrived at
after factoring in the necessary assumptions and after smoothening, wherever necessary.
III.
As for the Vintage Cars segment, there
is no substantial data relating to the past experience. A discounted price of
50% of the proposed rate based on the erstwhile Indian Motor Tariff (IMT) has
been proposed for those private cars identified as Vintage Cars by the Vintage
and Classic Car Club of India.
IV.
A discount of 15% is proposed for Electric
Private Cars, Electric Two Wheelers, Electric Goods carrying Commercial Vehicles
and Electric Passenger carrying Vehicles. The proposed discount will incentivize
usage of environmental friendly Vehicles. The
rates for the Electric Vehicles are given in Tables V, VI, VII & VIII.
V.
A discount of 7.5% on Motor TP premium
rates for Hybrid Electric Vehicles is proposed. This will be an incentive to
use environment friendly vehicles.
3.
The details of proposed Motor TP premium
rates for the various classes of vehicles are tabulated below:
Table I
Category
|
Vehicle Type
|
Existing Rates
|
Proposed Rates
|
(Rs)
|
(Rs)
|
FY 2019-20
|
FY 2020-21
|
|
Private Cars
|
|
Not exceeding 1000 cc
|
2,072
|
2,182
|
Exceeding 1000 cc but not exceeding 1500 cc
|
3,221
|
3,383
|
Exceeding 1500 cc
|
7,890
|
7,890
|
|
Two Wheelers
|
|
Not exceeding 75 cc
|
482
|
506
|
Exceeding 75 cc but not exceeding 150 cc
|
752
|
769
|
Exceeding 150 cc but not exceeding 350 cc
|
1,193
|
1,301
|
Exceeding 350 cc
|
2,323
|
2,571
|
A1
|
Goods Carrying Commercial Vehicles (other than 3 wheelers) -
Public
|
|
GVW not exceeding 7500 kgs
|
15,746
|
16,092
|
Exceeding 7500 kgs but not exceeding 12000 kgs
|
26,935
|
28,288
|
Exceeding 12000 kgs but not exceeding 20000 kgs
|
33,418
|
35,139
|
Exceeding 20000 kgs but not exceeding 40000 kgs
|
43,037
|
44,342
|
Exceeding 40000 kgs
|
41,561
|
44,457
|
A2
|
Goods Carrying Commercial Vehicles (other than 3 wheelers) -
Private
|
|
GVW not exceeding 7500 kgs
|
8,438
|
8,607
|
Exceeding 7500 kgs but not exceeding 12000 kgs
|
17,204
|
17,549
|
Exceeding 12000 kgs but not exceeding 20000 kgs
|
10,876
|
11,094
|
Exceeding 20000 kgs but not exceeding 40000 kgs
|
17,476
|
17,827
|
Exceeding 40000 kgs
|
24,825
|
25,323
|
A3
|
Goods Carrying Motorized Three Wheelers and Motorized Pedal
Cycles – Public Carriers
|
|
except e-carts
|
4,092
|
4,489
|
A4
|
Goods Carrying Motorized Three Wheelers and Motorized Pedal
Cycles – Private Carriers
|
|
except e-carts
|
3,914
|
3,922
|
B
|
Trailers
|
|
Agricultural Tractors upto 6 HP
|
857
|
918
|
Other vehicles including Miscellaneous & Special Type of
Vehicles (Class-C),(For each trailer, for more please multiply by no. of
trailers)
|
2,341
|
2,507
|
Table
II
Category
|
Vehicle Type
|
Existing Rates (Rs.)
|
Proposed Rates (Rs.)
|
|
FY 2019-20
|
FY 2020-21
|
|
Basic Rate
|
Per Licensed Passenger
|
Basic Rate
|
Per Licensed Passenger
|
|
C1a
|
Four wheeled vehicles used for carrying passengers for hire or
reward with carrying capacity not exceeding 6 passengers
|
|
|
Not exceeding 1000 cc
|
5,769
|
1,110
|
6,370
|
1,226
|
|
Exceeding 1000 cc but not exceeding 1500 cc
|
7,584
|
934
|
8,375
|
1,031
|
|
Exceeding 1500 cc
|
10,051
|
1,067
|
11,099
|
1,178
|
|
C1b
|
Three wheeled vehicles used for carrying passengers for hire or
reward with carrying capacity not exceeding 6 passengers
|
|
|
except e-rickshaw
|
2,595
|
1,241
|
2,595
|
1,241
|
|
C2
|
Four or more wheeled vehicles used for carrying passengers with
carrying capacity exceeding 6 passengers for hire or reward
|
|
|
School Bus*
|
13,874
|
848
|
14,338
|
876
|
|
Other Bus
|
14,494
|
886
|
14,978
|
916
|
|
C3
|
Motorized three wheeled passenger vehicles used for carrying
passengers for hire or reward with carrying capacity exceeding 6 passengers
but not exceeding 17 passengers
|
6,913
|
1,379
|
6,913
|
1,379
|
|
|
|
|
C2
|
Three wheeled passenger vehicles used for carrying passengers
for hire or reward with carrying capacity exceeding 17 passengers
|
15,845
|
969
|
15,845
|
969
|
|
|
C4
|
Motorized Two wheelers used for carrying passengers for hire or
reward
|
|
|
Not exceeding 75 cc
|
861
|
580
|
861
|
580
|
|
Exceeding 75 cc but not exceeding 150 cc
|
861
|
580
|
861
|
580
|
|
Exceeding 150 cc but not exceeding 350 cc
|
861
|
580
|
861
|
580
|
|
Exceeding 350 cc
|
2,254
|
580
|
2,254
|
580
|
|
*School
Buses are those buses which are registered in the name of the School and are
used only for transporting students to or from a school or on school related
trips.
Table
III
Category
|
Vehicle Type
|
Existing Rates
(Rs.)
FY 2019-20
|
Proposed Rates
(Rs.)
FY 2020-21
|
D
|
Special Types of Vehicles
|
|
i) Pedestrian controlled Agricultural Tractors with
Horse Power rating not exceeding 6HP, Hearses and Plane Loaders
|
1,550
|
1,660
|
ii) Other Misc & Spl types of vehicles
|
6,847
|
7,332
|
E
|
Motor Trade (Road Transit Risks)
|
|
i) Distance not exceeding 2400 kms
|
1,055
|
1,141
|
ii) Distance exceeding 2400 kms
|
1,268
|
1,371
|
F
|
Motor Trade (Road Risks) (Excluding Motorized Two Wheelers) –
(Named Driver or Trade Certificate)
|
|
1st named driver or certificate
|
1,345
|
1,455
|
For additional drivers/ certificates up to 5 (per
driver/certificate)
|
651
|
704
|
For additional Drivers/ Certificates exceeding 5 but not
exceeding 10 (per driver/ certificate)
|
419
|
453
|
For additional Drivers/ Certificates exceeding 10 but not
exceeding 15 (per driver/ certificate)
|
363
|
393
|
F
|
Motor Trade (Road Risks) (Motorized Two Wheelers) – (Named
Driver or Trade Certificate)
|
|
1st named driver or certificate
|
515
|
515
|
For each additional Driver/ Certificate
|
257
|
257
|
Table
IV
Category of Vehicle
|
Existing Rates (Rs.)
|
Proposed Rates (Rs.)
|
FY 2019-20
|
FY 2020-21
|
New Private Car – Three year single premium
|
Not exceeding 1000 cc
|
5,286
|
6,079
|
Exceeding 1000 cc but not exceeding 1500 cc
|
9,534
|
10,149
|
Exceeding 1500 cc
|
24,305
|
24,305
|
New Two Wheeler – Five year single premium
|
Not exceeding 75 cc
|
1,045
|
1,223
|
Exceeding 75 cc but not exceeding 150 cc
|
3,285
|
3,845
|
Exceeding 150 cc but not exceeding 350 cc
|
5,453
|
6,505
|
Exceeding 350 cc
|
13,034
|
13,034
|
Table
V
Rates for Electric
vehicles – Non passenger carrying
Category
|
Vehicle Type
|
Existing Rates
|
Proposed Rates
|
(Rs)
|
(Rs)
|
FY 2019-20
|
FY 2020-21
|
|
Private Cars
|
|
Not exceeding 30 KW
|
1,761
|
1,855
|
Exceeding 30 KW but not exceeding 65 KW
|
2,738
|
2,876
|
Exceeding 65 KW
|
6,707
|
6,707
|
|
Two Wheelers
|
|
Not exceeding 3 KW
|
410
|
430
|
Exceeding 3 KW but not exceeding 7 KW
|
639
|
654
|
Exceeding 7 KW but not exceeding 16 KW
|
1,014
|
1,106
|
Exceeding 16 KW
|
1,975
|
2,185
|
A1
|
Goods Carrying Commercial Vehicles (other than 3 wheelers) -
Public
|
|
GVW not exceeding 7500 kgs
|
-
|
13,678
|
Exceeding 7500 kgs but not exceeding 12000 kgs
|
-
|
24,045
|
Exceeding 12000 kgs but not exceeding 20000 kgs
|
-
|
29,868
|
Exceeding 20000 kgs but not exceeding 40000 kgs
|
-
|
37,691
|
Exceeding 40000 kgs
|
-
|
37,788
|
A2
|
Goods Carrying Commercial Vehicles (other than 3 wheelers) - Private
|
|
GVW not exceeding 7500 kgs
|
-
|
7,316
|
Exceeding 7500 kgs but not exceeding 12000 kgs
|
-
|
14,917
|
Exceeding 12000 kgs but not exceeding 20000 kgs
|
-
|
9,430
|
Exceeding 20000 kgs but not exceeding 40000 kgs
|
-
|
15,153
|
Exceeding 40000 kgs
|
-
|
21,525
|
A2
|
Goods Carrying Motorized Three Wheelers and Motorized Pedal
Cycles – Public Carriers
|
|
e-carts
|
2,859
|
3,136
|
A3
|
Goods Carrying Motorized Three Wheelers and Motorized Pedal
Cycles – Private Carriers
|
|
e-carts
|
3,204
|
3,211
|
Table VI
Long
term rates for electric vehicles – Private Cars and Two wheelers:
Category of Vehicle
|
Existing Rates (Rs.)
|
Proposed Rates (Rs.)
|
FY 2019-20
|
FY 2020-21
|
New Private Car – Three year single premium
|
Not exceeding 30 KW
|
4,493
|
5,167
|
Exceeding 30 KW but not exceeding 65 KW
|
8,104
|
8,627
|
Exceeding 65 KW
|
20,659
|
20,659
|
New Two Wheeler – Five year single premium
|
Not exceeding 3 KW
|
888
|
1,040
|
Exceeding 3 KW but not exceeding 7 KW
|
2,792
|
3,268
|
Exceeding 7 KW but not exceeding 16 KW
|
4,635
|
5,529
|
Exceeding 16 KW
|
11,079
|
11,079
|
Table VII
Rates for Electric
vehicles – Passenger carrying
Vehicle type
|
KW Segments
|
Proposed Basic TP
premium (Rs.)
|
Proposed Premium per
licensed passenger (Rs.)
|
C1a (Four wheeled
vehicles used for carrying passengers for hire or reward with carrying
capacity not exceeding 6 passengers)
|
Not exceeding 30 KW
|
5,414
|
1,042
|
Exceeding 30 KW but
not exceeding 65 KW
|
7,119
|
876
|
Exceeding 65 KW
|
9,434
|
1,001
|
C1b (Three wheeled
vehicles used for carrying passengers with carrying capacity not exceeding 6
passengers)
|
e-rickshaw
|
1,685
|
806
|
C2 (Four or more
wheeled vehicles used for carrying passengers with carrying capacity
exceeding 6 passengers for hire and reward)
|
School Buses
|
12,187
|
745
|
Other than School
Buses
|
12,731
|
779
|
C3 (Motorised three
wheeled passenger vehicles used for carrying passengers for hire or reward
with carrying capacity exceeding 6 passengers but not exceeding 17
passengers)
|
-
|
5,841
|
1,165
|
C2 (Three wheeled
vehicles used for carrying passengers for hire and reward with carrying
capacity exceeding 17 passengers)
|
-
|
13,388
|
819
|
C4 (Motorised Two
Wheelers used for carrying passengers for hire or reward)
|
Not exceeding 3 KW
|
732
|
493
|
Exceeding 3 KW but
not exceeding 7 KW
|
732
|
493
|
Exceeding 7 KW but
not exceeding 16 KW
|
732
|
493
|
Exceeding 16 KW
|
1,916
|
493
|
Table VIII -
Quadricycle
Category
|
Vehicle Type
|
Existing Rates (Rs.)
|
Proposed Rates (Rs.)
|
FY 2019-20
|
FY 2020-21
|
Basic Rate
|
Per Licensed Passenger
|
Basic Rate
|
Per Licensed Passenger
|
Quadricycle
|
Private Car
|
2,072
|
N/A
|
2,182
|
N/A
|
Electric private Car(Not exceeding 30 KW)
|
-
|
-
|
1,855
|
N/A
|
Commercial Vehicles not exceeding 500 CC
|
2,595
|
1,241
|
2,595
|
1,241
|
Long term rates – Three years
single premium:
Category
|
Vehicle Type
|
Existing Rates (Rs.)
|
Proposed Rates (Rs.)
|
FY 2019-20
|
FY 2020-21
|
Quadricycle
|
New Private Car
|
5,286
|
6,079
|
New Electric private Car (Not exceeding 30 KW)
|
4,493
|
5,167
|
4. All
stakeholders are invited to provide their comments on this exposure draft. The
comments should reach the Authority either physically or through e-mail
addressed to janita@irdai.gov.in
with a copy to sagar.bangal@irdai.gov.in, on or
before 20th March 2020.
(Yegnapriya Bharath)
Chief General Manager (Non-Life)
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