IRDAI Panel For Separate Payments Of Vehicle, Insurance Premium

IRDAI Panel For Separate Payments Of Vehicle, Insurance Premium

New Delhi: The Insurance Regulatory and Development Authority of India (Irdai) had issued MISP guidelines in 2017 with the intention of streamlining the process and bringing the practices of vehicle insurance, being sold by automotive dealers under the provisions of the Insurance Act, 1938.

Buyer of a new vehicle may have to pay the cost of vehicle and insurance premium through separate cheques, if the recommendations of a committee to review MISP guidelines are accepted by the insurance regulator Irdai.

The Insurance Regulatory and Development Authority of India (Irdai) had issued MISP guidelines in 2017 with the intention of streamlining the process and bringing the practices of vehicle insurance, being sold by automotive dealers under the provisions of the Insurance Act, 1938.

Motor Insurance Service Provider (MISP) refers to an automobile dealer appointed by the insurer or the insurance intermediary to distribute and/ or service motor insurance policies of automotive vehicles sold through it.

In June 2019, the regulator had set up a committee to review the MISP guidelines. The panel has submitted a report in which it has made various recommendations for the orderly conduct of motor insurance business through MISP channel.

Among other issues, the panel examined the current practice of collecting the premium payment from the customer while soliciting the motor insurance policy.

Under the present system, it said there is a lack of transparency in the cost of insurance premium when the customer buys the vehicle for the first time through the automotive dealer and makes the payment through one single cheque.

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