Domestic general insurers have decided to slash their premiums in the 'own damage' motor insurance segment by 5-20% for existing and new customers who own private and commercial vehicles.
The move follows new regulations issued by the IRDAI that have led to a cut in the commissions offered by insurers to auto dealers which serve as insurance agencies, reported Indian Express.
In the IRDAI’s MISP (Motor Insurance Service Provider) circular, the regulator capped distribution fees payable to auto dealers at 22.5% for two-wheelers and 19.5% for four-wheelers and sports utility vehicles (SUVs). Previously, general insurers paid distribution fees in the range of 30-40%.
According to industry officials, this is the first time that almost all the general insurers, including New India Assurance, United India Assurance, Bajaj Allianz General Insurance, ICICI Lombard, Tata AIG and SBI General Insurance have revised their ‘own damage’ premiums on vehicles downward despite incurring higher claims.