Irdai withdraws long-term package covers in motor sector over affordability

Regulator also says insurers are facing issues in offering the product

The Insurance regulator on Tuesday withdrew a circular, which asked general insurance companies to provide long-term package covers in the motor segment, offering third-party and own-damage insurance for three and five years to new two wheelers and four wheelers, with effect from August 1, 2020 on grounds that it is creating issues for insurers and also making it unaffordable for some section of vehicle owners.

The Insurance Regulatory and Development Authority (Irdai) after reviewing the performance of long term package covers and following concerns relating to its implementation since its introduction, decided to withdraw these covers.

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