Laws and sections by number or title, due dates, pages, and updates.
The Insurance Regulatory and Development Authority of India clarifies rules for motor insurance policy renewals during the lockdown period from 25th March 2020 to 14th April 2020. Insurers apply the premium payment relaxation only to the Third Party Liability component of Motor Package policies and to Stand Alone Motor Third Party Insurance policies. Insurers do not apply any relaxation to the Own Damage component. Insurers recognise premium for renewals that fall from 25th March 2020 to 31st March 2020 as income during the financial year 2019-20 by debiting Outstanding Premium. Insurers also provide for corresponding liabilities such as Unearned Premium Reserve and claims provisioning in the financial year 2019-20.
What you must do
Key dates
Who is affected
Exceptions
Ask about this circular
[Image omitted. See the official document.]
Title:Circular
Reference No.: IRDAI/NL/CIR/MOT/081/04/2020 Date: 03/04/2020
Premium payment for renewal of Motor Third Party Insurance policies falling due during the lockdown period ( 25th March, 2020 to 14th April, 2020) as a result of COVID 19 situation
The Authority is in receipt of a few queries in respect of Circular Ref. IRDAI/NL/CIR/MOT/079/04/2020 dated 2nd April, 2020 on the captioned matter.
The queries and the responses thereto are given hereunder:
Q1. How is the relaxation in payment of premium to be applied for Motor Package policies?
A.1. As regards Motor package policies, the relaxation is applicable only for the TP Liability component. For the Own Damage component there is no relaxation.
Q.2. Is the relaxation in payment of premium only for Stand Alone Motor Third Party Insurance policies or is it for the TP portion of Motor Package policies also?
A.2. The relaxation is for both Stand Alone Motor Third Party Insurance policies and the TP portion (alone) of Motor Package policies.
Q3. How should the premium collected for the renewal of Motor TP policies that fell during the lockdown period from 25th March, 2020 to 31st March, 2020 be accounted?
A3. Premium for renewals that fell from 25th March to 31st March, 2020 shall be recognised as income during the FY 2019-20 by debiting Outstanding Premium. Further, corresponding liabilities on such premium such as UPR, Claims provisioning etc shall also be provided for in FY 2019-20.
(T.L. ALAMELU) MEMBER (NON-LIFE)
