IRDAI Mulls Linking Motor Insurance Premium With Traffic Violations

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The nine-member working group will submit a report in two months with possible solutions and ways to implement the linkage

A working group has been established by the Insurance Regulatory and Development Authority of India (IRDAI) to explore the possibilities of linking motor insurance premiums with traffic violations. In the Delhi-NCR region, the insurance firms will be commencing a pilot project to implement a new set of rules according to IRDAI’s latest order revealed last Friday.

The working group comprises of nine members that include officials of IRDAI, Delhi traffic police, llBl and other related sectors. A time period of two months has been given to the working group to come up with implementable solutions and it comes on the back of the drastic increase in penalties levied for traffic violations and bad driving in a recent amendment.

If linking motor insurance premiums with traffic infringements come into existence, there will be a further surge in penalties. We would certainly welcome that in all respects. This comes as a part of the central government focussing on Intelligent Traffic Management System in the metropolitan and smart cities.

Indian Roads, Traffic & Bridges

IRDAI believes that such a combination of efforts could help in reducing road accidents and will force a change in driving habits. The working group will suggest different models for carrying such an implementation using the pilot project while a system will be suggested to access traffic violation history of each vehicle and transfer it to IIBI (Insurance Information Bureau of India) database for a quick assessment and immediate action.

Additionally, a new framework and methodology will be reported to link traffic violations and motoring insurance premium while international practices will be studied for coming up with the best possible recommendations. Moreover, the existing point system will also be assessed for further improvement.

It could include standardizing point systems for each violation and data fields will be developed as part of the rating factor. The Automated Traffic Enforcement and violations of the Motor Vehicles Act through e-Challan has also been enforced to take necessary action against registered owners or drivers involved.