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Title: Circular
Reference No.: IRDAI/NL/CIR/MOTP/158/09/2018
Date: 20/09/2018
To All General Insurers Carrying On Motor Insurance Business

GeneralRegulation (`GR`)-36 of India Motor Tariff(`IMT`), 2002 mandatesGeneral Insurance Companies carrying on motor insurance business to provideCompulsory Personal Accident (CPA) Cover for Owner-Driver under both LiabilityOnly and Package policies. The owner of Insured vehicle holding an `effective`driving license is termed as Owner-Driver for the purposes of thissection.The Coveris provided to the Owner-Driver whilst driving the vehicle including mountinginto/ dismounting from or traveling in the insured vehicle as a co-driver.


2. Currently, the Capital SumInsured (CSI) under this section for Motorised Two Wheelers and PrivateCars/Commercial vehicles is Rs. 1,00,000/- and Rs. 2,00,000/- respectively.However, a few General Insurers have been offering Add on covers under Packagepolicies with higher CSI over and above the stipulated CSI, on payment ofadditional premium at the option of the Insured. The GeneralInsurance Industry, through its Council, had also taken up the increase forhigher CSI under CPA Cover for Owner-Driver inJuly, 2017 for consideration of IRDAI.

3. Inthe meantime, the Hon’ble High Court of Judicature at Madras has, videits judgement dated 26th October, 2017 in the matter of CivilMiscellaneous Appeal No. 1428 of 2017 (United India Insurance Co Ltd Vs R.Rekha & Ors), issued directions to IRDAI which reads as under.


``Enhancethe Compulsory Personal Accident Cover from the existing Rs.1,00,000/- to atleast not less than Rs.15,00,000/- so that the amount of Rs.15,00,000/- willadd to some succor or solace to the victims of road accidents, who are theowner of the vehicle, who may incidentally sustain bodily injury or death.Further, an option can be given to the insured/owner of the vehicle to payhigher premium amount to get enhanced compensation over and aboveRs.15,00,000/- in case the owner of vehicle so desires to such enhancedcompensation in the event of any untoward motor accident which may result inbodily injury or death. ``

4. In accordance with the above directions of the Hon’ble High Court ofJudicature at Madras, the Authority, in exercise of the powers conferredby Section14 (2) (i) of the IRDA Act 1999 and in consultation with thestakeholders, hereby issues the following modifications to General Regulation(GR) -36 of India Motor Tariff,2002 on Compulsory Personal Accident Cover forOwner-Driver.

(i) AllGeneral Insurers carrying on motor insurance business shall provide CPA Cover forOwner-Driver under Liability Only, under Section III of Package Policies to all classes of vehicles and Bundled Covers wherever applicable.

(ii)A minimum Capital Sum Insured (CSI) of Rs.15,00,000/-shallbe provided under CPA Cover for Owner-Driver under Liability Only, underSection III of Package Policies to allclasses of vehicles and Bundled Covers whereverapplicable at the premium rate of Rs. 750/- per annum for annual policy.This rate will be valid until further notice.

(iii)A higher CSI may be provided over and above Rs.15,00,000/-through Optional Covers under Liability Only and under Section III of Package Policies/ Bundled Covers on payment of additionalpremium at the option of the Insured.

(iv) In view of the above changes, the current Add on coversoffering enhanced CPA Cover for Owner-Driver underSection III of Package Policies and BundledCovers up to CSI of Rs.15,00,000/-shall stand withdrawn. However, Insurerswilling to offer CSI over and above Rs.15,00,000/-may revise/file Add on cover under Liability only, Package Policies and Bundled Covers. It is suggested the higherCSI in such Add on cover may be in multiples of Rs. 1,00,000/-. or Rs. 5,00,000/-.

(v).As regards premium payable for CPA cover under long term motor policies,insurers may price them in line with their current approach for pricing. Shouldthe Authority find the pricing approach in variance from their general pricingphilosophy/approach and not in line with actuarial principles, suitable directionmay be issued by the Authority. Insurers maystart issuing such covers effective from the date of receipt of this circulareven while ensuring that the filing for these is done under File and UseGuidelines on or before 25th October, 2018.

(vii). All other extantprovisions applicable for Motor Third Party Insurance shall continue to apply.

This Circularshall come into effect immediately. Please acknowledge thiscircular and confirm having noted its contents.

This is issued with theapproval of the competent authority.



ChiefGeneral Manager (Non-Life)


CC: TheSecretary General, General Insurance Council, Mumbai

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