As per circular sent to the insurance companies, Irda has asked them to ensure that the name of nominee is mentioned in the policy document at the time of giving cover for private vehicles.
The directive follows disputes relating to settlement of claims by insurance companies in the event of death of the policyholder. As per the existing practice, insurance companies settle claims in favour of the legal heirs of the deceased policyholder.
Motor insurance account for about 45 per cent of the total non-life insurance business. Since the premium rates for this cover is still regulated by the Irda, insurance companies are incurring losses. It is estimated that the loss in the segment could touch Rs 3,500 crore in the current fiscal.
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