The Madras High Court recently issued notice to the Insurance Regulatory Development Authority of India (IRDAI) on a PIL seeking refund/ adjustment in the motor vehicle premiums paid by the insurance holders, pursuant to the nation-wide lockdown.

The petition was heard by a division bench of Justice R. Subbiah and Justice Krishnan Ramasamy on July 3, 2020 and notices have been issued to IRDAI and the Ministry of Road Transport and Highways, returnable in two weeks.

The petition has been filed by Advocate G. Rajkumar, stating that the authority should be directed to take appropriate policy measures to give relief to insurance holders, who could not use their vehicles during the lockdown period.

He has contended that the subsequent lockdown notifications issued by the Union Ministry of Home Affairs resulted in an unprecedented and unorthodox situation, drastically restricting traffic across the country. This in turn, he submitted, immensely benefited the insurance industry as there were fewer accidents leading to fewer claims.

"The premiums collected ought to have been adjusted/ refunded to the policyholders across the country as was done globally," the Petitioner said.

The petition also contends that despite a specific regulation available in the motor vehicle tariff, to adjust the premiums despite vehicle being laid up for more than 60 days, the Regulator has not has not provided any such circular, regulation or guidelines in relation to motor vehicle insurance refunds during lockdown.

Other grounds taken by the Petitioner include (i) preferential treatment of Air travel passengers by IRDAI as opposed to Road users; (ii) the global practices and advisory of other regulators; and (iii) precedents set by a few other companies in order to ensure fair and transparent functioning towards the policy holders.

Source : LiveLaw.in