Those purchasing a new vehicle may have to pay the cost of the vehicle and insurance premium through separate checks. If the Insurance Regulatory and Development Authority (IRDA) accepts the recommendation of a committee to review the Motor Insurance Service Provider (MISP) guidelines, this arrangement may come into force. IRDA issued the MISP Guidelines in 2017 with an intention to rationalize the process.
It was also intended to bring vehicle insurance sold by auto dealers under the provisions of the Insurance Act-1938. MISP means a vehicle dealer appointed by an insurance company or an insurance intermediary unit, which also provides insurance services for vehicles it sells.
Was created in 2019 Committee
regulator had set up a committee to review Maispi guidelines in 2019. The committee has made several recommendations in its report for the systematic operation of the motor insurance business through MISP. The committee also reviewed the current practice of taking premium payments from customers while making motor vehicle insurance policies, among other issues. The committee said that in the current system, there is a lack of transparency about the cost of paying insurance premium for the first time a customer buys a vehicle from a vehicle dealer. It involves payment by a single check by the customer. Also Read: Postal life Insurance: Know about postal life insurance
MISPs pay their accounts to the insurance company, so the customer does not know how much the insurance premium paid by him is because it is included in the cost of the vehicle itself. The committee has said that lack of transparency is not in the interest of the policyholder, as the client does not know the true cost of insurance. Also, the customer does not get information about coverage options and concessions etc.