Friday, July 12, 2013

Regulator trims non-life insurance premiums

Purchasing non-life insurance policies for fire, earthquake and other risks will be cheaper as the insurance regulator — Insurance Board (IB) — has slashed insurance premium rates for some policies.

According to the newly issued directive, premiums for fire and earthquake policies has been reduced by 10 per cent.

Likewise, premium for accident insurance policies that will cover damages caused by strikes, civil unrest and vandalism will also cost less to the insurance policy holder. For a policy of up to Rs one million, the premium will cost 10 paisa per Rs 1000 and for policies greater than Rs one million, the premium has been fixed at 25 paisa per Rs 1000.

Moreover, IB has revised the Fire Insurance Directive that has directed insurance companies to include earthquake insurance under the group of fire insurance. According to the directive, fire insurance policy will include policies for fire, earthquake, lightening and explosion of appliances.

The premium cut has been implemented by the regulator to ensure that policy holders will not be burdened much to pay extra for earthquake insurance. In addition, beneficiaries of earthquake insurance will have to share the cost of damage along with the insurer — 2.5 per cent of the insurance amount or Rs one million whichever is low.

Likewise, the insurance regulator has also directed insurance companies to reduce 10 per cent on insurance premium rate if an individual or an institution buys policy directly from the company without using any agent.

Source: THT

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