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Report No. 190 Provisions relating to tariffs 9.1.12 Section 64U.- 64ULA of the Insurance Act, 1938 contained provisions that deal with the Tariff Advisory Committee (TAC) including its composition and powers. The Consultation Paper had sought to make detailed proposals in this regard. 9.1.13 There has been no response received either from the Central Government or the IRDA to these proposals. FICCI has categorically stated that "an administered tariff regime is antithesis of liberalisation and market must move to a detariffed regime". The private insurance companies would also favour a de-tariffed regime. In the context of liberalisation, insurance companies demand freedom to unburden themselves of loss making portfolios like motor vehicle insurance, for instance. On the other hand, the countervailing liability as presently found in the Insurance Act, 1938 is the obligation of insurers to rural and social sectors. These issues again throw up policy considerations. The questions that arise are: a. Do we want to detariff the entire insurance industry or retain tariff structures for certain types of insurance business? b. Should the detariffing, even in select types of insurance business, be done gradually or at once? c. What should be the precise role of the IRDA? 9.1.14 The above questions cannot possibly be attempted to be answered by the Law Commission of India. The answers to these questions have to come from the Government itself in consultation with the IRDA, the industry and other experts in the field. The change in the law in this regard has to be consequent upon the taking of such policy decision and not the other way around. Therefore, this is not taken up for action.    |
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