IRDAI vide circular dated 20/02/2023 has issued clarification regarding co-insurance. Insurance Act, 1938 specifies that every insurer carrying on general insurance business shall, after the commencement of the Insurance Laws (Amendment) Act, 2015, underwrite such minimum percentage of insurance business in third party risks of motor vehicles as may be specified by the regulations.
Where insurers undertake Co-insurance arrangement as part of risk sharing program, it is clarified that the inward co-insurance shall not be considered for the purpose of complying with this requirement.
