Various
General Insurance Companies had requested for allowing them to introduce
First Loss cover particularly in the Householders' policies sold by
them. The matter was also taken up in the General Insurance Council
by the Insurers. The Council in their meeting decided to refer the matter
to Tariff Advisory Committee as Fire Insurance part is under Tariff.
The TAC after examining the matter have recommended that the insurers
can include Householders' policies on first loss basis covering fire
insurance of building and contents under Householders Package Policies.
It has been agreed in consultation with Tariff Advisory Committee that
insurers can now go ahead with the introduction of such insurance polices.
Householders Package Policies issued on First loss basis shall include
besides item no. 1 at least combination of one or more sections as mentioned
or the insurers can add other sections before filing the product with
the Authority:
1. Fire Insurance of (a) building and (b) contents
2. Burglary, housebreaking, larceny and theft insurance
3. All risks insurance of jewellery and valuables
4. Accident insurance of fixed plate glasses
5. Breakdown insurance of domestic appliances
6. Breakdown insurance of TV, VCR, VCD, DVD etc.
7. Insurance of pedal cycle 8. Insurance of travel baggage
9. Personal Accident insurance
10. Public liability & W.C. Liability
While item no.1 under the above Package Policy continues to be under
Tariff, the rest of the items fall in the non-tariff category. It is
expected that the respective insurers at the time of filing such products
shall charge a rate which is not less than 0.50 per mille on TSI for
item no.1(a), and rates not less than the following in respect of item
no.1 (b), namely contents:-
Schedule
|
Selected
percentage of full value cover
|
Charging
percentage of full value premium
|
|
Up to 25%
|
50% of 0.50
per mille
|
|
Upto 50%
|
70% of 0.50
per mille
|
|
Upto 65%
|
85% of 0.50
per mille
|
|
Upto 75%
|
90% of 0.50
per mille
|
|
Beyond 75%
|
0.50 per mille
|
Please
note that the maximum sum insured for contents item no.1 (b) can be
pegged at maximum Rs.50 lacs, and will be subject to the condition of
partial average wherein first loss insurance shall be restricted up
to the percentage of full value cover as stated in column no.1 at the
schedule above, accordingly the following condition may also form part
of Schedule mentioned above, in respect of every product filed with
IRDA.
"It is hereby declared and agreed that this policy is issued as
the First Loss Insurance up to _____% of the contents of the insured's
household (100%) as limits in the schedule attached to and forming part
of the policy.
It is further declared and agreed that in the event of the total value
of contents at risk at the time of loss being greater than the total
value declared for purpose of this insurance and incorporated in the
schedule, the insured shall be considered as being his own insurer,
for the difference, and shall bear a rateable share of the loss accordingly."
The above policy w.e.f 1st June 2003.
(R.C.Sharma)
Member