Insurance Irdai offers long-term car insurance. Check details By The Us Express News - December 8, 2022 0 1 FacebookTwitterPinterestWhatsApp The Insurance Regulatory and Development Authority of India (Irdai) has proposed to allow all general insurers to offer long-term motor insurance to provide policyholders with wider choice. The regulator proposed a three-year passenger car co-terminus policy with motor third-party liability coverage and a five-year two-wheeler co-terminus policy with motor third-party liability coverage. Under the draft, Irdai said, “Pricing of long-term policies should be made on sound actuarial principles, taking into account all relevant aspects of rating, including claims experience, lower anti-selection, less policy administration and acquisition costs given higher renewal rates, long-term discount, expected NCB level by the end of the policy period and applicable government taxes, etc. The cost-efficiency of policy management may also be taken into account when pricing additional and optional covers. See also People Moves: Danish insurer Tryg appoints Brammer as CEO, succeeding Hübbe; AXA XL appoints Cerquenich as Senior Risk Consultant, Marine, UK & Lloyd's The insurer must collect the premium for the entire term of the policy at the time of sale of the insurance. But the premium for the year is only recognized as income and the insurer must treat the remaining amount as a premium deposit or advance premium. All long-term policies would have standard cancellation/premium refund terms. For example, any long-term self-damage auto policy has a 30-day cooling-off period from the effective date of the policy to allow the policyholder to review the terms of the policy. The policyholder is entitled to a pro rata refund of the premium if the free cancellation is exercised. See also 1 Jan. Renewals: 'They're done'; Corrected carrier overreliance on reinsurers The motor vehicle insurance policy can be canceled during the term of the policy by a policyholder or by the insurer by cancellation. In that case, the refund of the premium is: 1. Future annual premiums – fully refundable 2. For the insurance year in which the insurance is terminated: a. If no damage is reported during the year – Restitution pro rata premium associated with the year of cancellation b. In case of damage reports during the year – No refund of premium 3. GST and other government taxes — refund to the extent permitted by relevant authorities, Irdai said. See also Legal & General's Wilson retires as CEO after ten years “The existing No Claim Bonus (NCB) grid as specified for 1-year Motor Own Damage policies would also apply to long-term policies, and the NCB applicable at the end of the policy term in the case of long-term policies would be the same as would be earned if such policies were renewed annually. In the case of stand-alone long term self-damage policies issued to terminate concurrently with motor third-party liability cover, 9 months term of the policy may be considered as a full year for NCB recognition during the year, said Irdai. Catch all business news, market news, major news events and latest news updates on Live TUSEN. Download the TUSEN News app to receive daily market updates. More or less .