The Insurance Regulatory and Development Authority (Irda) has informed all general insurance companies that 1 January is the new deadline for implementation of the free pricing regime. Free pricing refers to market conditions where insurers could determine the premium rates for products without any interference from the tariff advisory committee (TAC), which regulates rates, advantages, terms and conditions for general insurers. The earlier deadline was 1 November. “Irda has asked all non-life insurance companies to file their own premium rates before implementation of the non-tariff regime,” said C.S. Rao, chairperson of Irda. Since 1 January, insurers had only the partial freedom to price their motor, fire and engineering insurance policies but after January 2008, insurers would have complete freedom to price point their products.
According to the road map designed by Irda, the insurance industry was scheduled to be under no tariff rules by April. In addition, the date for the implementation of standard wording for insurance policies has been finalized—1 April 2008. Recently, the General Insurance Council, an umbrella organization for all non-life insurance companies, came out with guidelines for standard wording for fire, engineering and motor portfolios. Currently, companies follow the terms and conditions issued by TAC for insurance products.