1. By virtue of powers vestedin the Authority under Section 14 (2) (i) of the IRDA Act, 1999, the Authorityhas been notifying the premium rates applicable to Motor Third Party (TP)Liability Insurance, every year, starting from 2011.
2. The Motor Third Party ratesproposed by IRDAI for the year 2020-21 (ending 31stMarch, 2021) for various categories of vehicles, which shall come into force fromthe date to be notified, have been arrived at as follows:
   • Data source and Data used:
     1. Thedata provided by the Insurance Information Bureau of India (IIBI) has been usedfor arriving at the Motor TP premium rates.
     2. The claims paid data in respect ofeach of the accidentyears startingfrom the year 2011-12 up to 2018-19 has been considered, taking into account the combination of ~Class Code~and ~Vehicle CC/PCC/GVW~ Code.
     3. GrossWritten Premiums for the FYs 2011-12 to 2018-19 have been considered.
   • Basic Methodology
     1. Paid claims data has been considered forconstruction of cumulative paid claims triangle for each homogenous subclasswith Accident Year (AY) as origin year and Financial Year (FY) as developmentyear.
     2. The ultimate claims cost for each accidentyear has been estimated using the actuarial technique of Basic Chain LadderMethod applied to cumulative paid claims data.
     3. Age-to-Age-factors (ATAFs) for each AccidentYear (AY) and Development Year (DY) have been calculated. Development factorswere selected after considering various averages of ATAFs: simple average ofall years, volume weighted average, average of last 3 years, average of last 5years and highest of all the averages.
     4. Theoldest Accident year has eight years of development which is insufficient forcomplete settlement of claims as Motor Third Party is long tailed liabilitybusiness. A tail factor has been assumed for all the categories of vehicles forthe complete run off of the claims paid. Losses for each AY are projected usingBCL and an assumed tail factor was applied to arrive at the Ultimate Claimamounts.
     5. The financial year-wise Gross Written Premiumhas been converted to financial year wise Gross Earned Premium (GEP) byapplying the formula:
     6. Ultimate Loss Ratio (ULR) for each Accidentyear is calculated as Ultimate Claims/Gross Earned Premium
     7. Average Premium from Data for each financialyear was calculated as Gross Earned Premium / Exposed Policies where, exposedpolicies are derived from number of policies using a similar approach as underthe above para 5.
     8. Burning Cost (BC) per policy for eachAccident year was computed by multiplying Ultimate Loss Ratio and AveragePremium as calculated under the above paras 6 and 7 respectively.
     9. By considering the projected Burning Cost andloading it with appropriate expenses, Premium rates for the FY 2020-21 havebeen derived.
     10. The actuarial rates have been arrived atafter factoring in the necessary assumptions and after smoothening, wherever necessary.
   • As for the Vintage Cars segment, thereis no substantial data relating to the past experience. A discounted price of50% of the proposed rate based on the erstwhile Indian Motor Tariff (IMT) hasbeen proposed for those private cars identified as Vintage Cars by the Vintageand Classic Car Club of India.
   • A discount of 15% is proposed for ElectricPrivate Cars, Electric Two Wheelers, Electric Goods carrying Commercial Vehiclesand Electric Passenger carrying Vehicles. The proposed discount will incentivizeusage of environmental friendly Vehicles. Therates for the Electric Vehicles are given in Tables V, VI, VII & VIII.
   • A discount of 7.5% on Motor TP premiumrates for Hybrid Electric Vehicles is proposed. This will be an incentive touse environment friendly vehicles.
3. The details of proposed Motor TP premiumrates for the various classes of vehicles are tabulated below:

   Table-I

   Category	Vehicle Type	Existing Rates	Proposed Rates
   		(Rs) FY 2019-20	(Rs) FY 2020-21
   	Private Cars
   	Not exceeding 1000 cc	2,072	2,182
   	Exceeding 1000 cc but not exceeding 1500 cc	3,221	3,383
   	Exceeding 1500 cc	7,890	7,890
   	Two Wheelers
   	Not exceeding 75 cc	482	506
   	Exceeding 75 cc but not exceeding 150 cc	752	769
   	Exceeding 150 cc but not exceeding 350 cc	1,193	1,301
   	Exceeding 350 cc	2,323	2,571
   A1	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Public
   	GVW not exceeding 7500 kgs	15,746	16,092
   	Exceeding 7500 kgs but not exceeding 12000 kgs	26,935	28,288
   	Exceeding 12000 kgs but not exceeding 20000 kgs	33,418	35,139
   	Exceeding 20000 kgs but not exceeding 40000 kgs	43,037	44,342
   	Exceeding 40000 kgs	41,561	44,457
   A2	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Private
   	GVW not exceeding 7500 kgs	8,438	8,607
   	Exceeding 7500 kgs but not exceeding 12000 kgs	17,204	17,549
   	Exceeding 12000 kgs but not exceeding 20000 kgs	10,876	11,094
   	Exceeding 20000 kgs but not exceeding 40000 kgs	17,476	17,827
   	Exceeding 40000 kgs	24,825	25,323
   A3	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Public Carriers
   	except e-carts	4,092	4,489
   A4	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Private Carriers
   	except e-carts	3,914	3,922
   B	Trailers
   	Agricultural Tractors upto 6 HP	857	918
   	Other vehicles including Miscellaneous & Special Type of Vehicles (Class-C),(For each trailer, for more please multiply by no. of trailers)	2,341	2,507

    

   Table-II

   Category	Vehicle Type	Existing Rates (Rs.)		Proposed Rates (Rs.)
   		FY 2019-20		FY 2020-21
   		Basic Rate	Per Licensed Passenger	Basic Rate	Per Licensed Passenger
   C1a	Four wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers
   	Not exceeding 1000 cc	5,769	1,110	6,370	1,226
   	Exceeding 1000 cc but not exceeding 1500 cc	7,584	934	8,375	1,031
   	Exceeding 1500 cc	10,051	1,067	11,099	1,178
   C1b	Three wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers
   	except e-rickshaw	2,595	1,241	2,595	1,241
   C2	Four or more wheeled vehicles used for carrying passengers with carrying capacity exceeding 6 passengers for hire or reward
   	School Bus*	13,874	848	14,338	876
   	Other Bus	14,494	886	14,978	916
   C3	Motorized three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 6 passengers but not exceeding 17 passengers	6,913	1,379	6,913	1,379
   C2	Three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 17 passengers	15,845	969	15,845	969
   C4	Motorized Two wheelers used for carrying passengers for hire or reward
   	Not exceeding 75 cc	861	580	861	580
   	Exceeding 75 cc but not exceeding 150 cc	861	580	861	580
   	Exceeding 150 cc but not exceeding 350 cc	861	580	861	580
   	Exceeding 350 cc	2,254	580	2,254	580

   *SchoolBuses are those buses which are registered in the name of the School and areused only for transporting students to or from a school or on school relatedtrips.

    

   Table-III

   Category	Vehicle Type	Existing Rates (Rs.) FY 2019-20	Proposed Rates (Rs.) FY 2020-21
   D	Special Types of Vehicles
   	i) Pedestrian controlled Agricultural Tractors with Horse Power rating not exceeding 6HP, Hearses and Plane Loaders	1,550	1,660
   	ii) Other Misc & Spl types of vehicles	6,847	7,332
   E	Motor Trade (Road Transit Risks)
   	i) Distance not exceeding 2400 kms	1,055	1,141
   	ii) Distance exceeding 2400 kms	1,268	1,371
   F	Motor Trade (Road Risks) (Excluding Motorized Two Wheelers) – (Named Driver or Trade Certificate)
   	1st named driver or certificate	1,345	1,455
   	For additional drivers/ certificates up to 5 (per driver/certificate)	651	704
   	For additional Drivers/ Certificates exceeding 5 but not exceeding 10 (per driver/ certificate)	419	453
   	For additional Drivers/ Certificates exceeding 10 but not exceeding 15 (per driver/ certificate)	363	393
   F	Motor Trade (Road Risks) (Motorized Two Wheelers) – (Named Driver or Trade Certificate)
   	1st named driver or certificate	515	515
   	For each additional Driver/ Certificate	257	257

   -

   -

   -

    

   Table-IV

   Category of Vehicle	Existing Rates (Rs.)	Proposed Rates (Rs.)
   	FY 2019-20	FY 2020-21
   New Private Car – Three year single premium
   Not exceeding 1000 cc	5,286	6,079
   Exceeding 1000 cc but not exceeding 1500 cc	9,534	10,149
   Exceeding 1500 cc	24,305	24,305
   New Two Wheeler – Five year single premium
   Not exceeding 75 cc	1,045	1,223
   Exceeding 75 cc but not exceeding 150 cc	3,285	3,845
   Exceeding 150 cc but not exceeding 350 cc	5,453	6,505
   Exceeding 350 cc	13,034	13,034

   -

   -

    

   Table-V

   Rates for Electricvehicles – Non passenger carrying

   Category	Vehicle Type	Existing Rates	Proposed Rates
   		(Rs) FY 2019-20	(Rs) FY 2020-21
   	Private Cars
   	Not exceeding 30 KW	1,761	1,855
   	Exceeding 30 KW but not exceeding 65 KW	2,738	2,876
   	Exceeding 65 KW	6,707	6,707
   	Two Wheelers
   	Not exceeding 3 KW	410	430
   	Exceeding 3 KW but not exceeding 7 KW	639	654
   	Exceeding 7 KW but not exceeding 16 KW	1,014	1,106
   	Exceeding 16 KW	1,975	2,185
   A1	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Public
   	GVW not exceeding 7500 kgs	-	13,678
   	Exceeding 7500 kgs but not exceeding 12000 kgs	-	24,045
   	Exceeding 12000 kgs but not exceeding 20000 kgs	-	29,868
   	Exceeding 20000 kgs but not exceeding 40000 kgs	-	37,691
   	Exceeding 40000 kgs	-	37,788
   A2	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Private
   	GVW not exceeding 7500 kgs	-	7,316
   	Exceeding 7500 kgs but not exceeding 12000 kgs	-	14,917
   	Exceeding 12000 kgs but not exceeding 20000 kgs	-	9,430
   	Exceeding 20000 kgs but not exceeding 40000 kgs	-	15,153
   	Exceeding 40000 kgs	-	21,525
   A2	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Public Carriers
   	e-carts	2,859	3,136
   A3	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Private Carriers
   	e-carts	3,204	3,211

   -

    

   Table-VI

   Longterm rates for electric vehicles – Private Cars and Two wheelers:

   Category of Vehicle	Existing Rates (Rs.)	Proposed Rates (Rs.)
   	FY 2019-20	FY 2020-21
   New Private Car – Three year single premium
   Not exceeding 30 KW	4,493	4,493
   Exceeding 30 KW but not exceeding 65 KW	8,104	8,627
   Exceeding 65 KW	20,659	20,659
   New Two Wheeler – Five year single premium
   Not exceeding 3 KW	888	1,040
   Exceeding 3 KW but not exceeding 7 KW	2,792	3,268
   Exceeding 7 KW but not exceeding 16 KW	4,635	5,529
   Exceeding 16 KW	11,079	11,079

    

   Table-VII

   Rates for Electricvehicles – Passenger carrying

   Vehicle type	KW Segments	Proposed Basic TP premium (Rs.)	Proposed Premium per licensed passenger (Rs.)
   C1a (Four wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers)	Not exceeding 30 KW	5,414	1,042
   	Exceeding 30 KW but not exceeding 65 KW	7,119	876
   	Exceeding 65 KW	9,434	1,001
   C1b (Three wheeled vehicles used for carrying passengers with carrying capacity not exceeding 6 passengers)	e-rickshaw	1,685	806
   C2 (Four or more wheeled vehicles used for carrying passengers with carrying capacity exceeding 6 passengers for hire and reward)	School Buses	12,187	745
   	Other than School Buses	12,731	779
   C3 (Motorised three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 6 passengers but not exceeding 17 passengers)	-	5,841	1,165
   C2 (Three wheeled vehicles used for carrying passengers for hire and reward with carrying capacity exceeding 17 passengers)	-	13,388	819
   C4 (Motorised Two Wheelers used for carrying passengers for hire or reward)	Not exceeding 3 KW	732	493
   	Exceeding 3 KW but not exceeding 7 KW	732	493
   	Exceeding 7 KW but not exceeding 16 KW	732	493
   	Exceeding 16 KW	1,916	493

    

   Table VIII - Quadricycle

   Category	Vehicle Type	Existing Rates (Rs.)		Proposed Rates (Rs.)
   		FY 2019-20		FY 2020-21
   		Basic Rate	Per Licensed Passenger	Basic Rate	Per Licensed Passenger
   Quadricycle	Private Car	2,072	N/A	2,182	N/A
   	Electric private Car(Not exceeding 30 KW)	-	-	1,855	N/A
   	Commercial Vehicles not exceeding 500 CC	2,595	1,241	2,595	1,241

   Long term rates – Three yearssingle premium:

   Category	Vehicle Type	Existing Rates (Rs.)	Proposed Rates (Rs.)
   		FY 2019-20	FY 2020-21
   Quadricycle	New Private Car	5,286	6,079
   	New Electric private Car (Not exceeding 30 KW)	4,493	5,167

4. Allstakeholders are invited to provide their comments on this exposure draft. Thecomments should reach the Authority either physically or through e-mailaddressed to janita@irdai.gov.inwith a copy to sagar.bangal@irdai.gov.in, on orbefore 20th March 2020.

(Yegnapriya Bharath)

Chief General Manager (Non-Life)