Insurers can't impose restriction on purchase of policy: IRDAI

To prevent unhealthy market practices, insurance regulator IRDAI today said general insurers cannot impose any restrictions with regards purchase of motor insurance polices.
The regulator also said general insurance companies cannot force individuals to purchase personal accident policies along with motor insurance.
Of late, it has come to notice of the IRDAI that some general insurance companies "having tie-ups with a particular motor dealer are not accepting motor business, if it is sourced by any other agent or intermediary".
Similar issue has also been observed where some insurers offer personal accident policies along with such motor policies, the IRDAI said.

"With a view to protect the interests of policyholders and prevent unhealthy market practices...It is hereby clarified that there shall be no restriction whatsoever on sourcing/servicing of motor insurance business (including personal accident policies, wherever applicable) by any agent/intermediary or insurer/insurance office on the ground that they have tie-up with any motor dealers/manufacturers," it said.
Also, companies should ensure that no clause/agreement/ tie-up in variation with the the directions should be entered into by any insurer with any motor dealers/ manufacturers.
"It should also be ensured that all existing agreements confirm with the above direction," the Insurance Regulatory and Development Authority of India said in the circular.

Policyholders have a prerogative to choose any agent, intermediary or any insurer to avail of insurance services, it said.