NEW DELHI: Transporters on Monday called off their proposed nationwide strike against the steep rise in third party insurance rates as the Insurance Regulatory and Development Authority (IRDA) decided to substantially slash the increased premium rate.

The All India Motor Transport Congress (AIMTC) called off its proposed nationwide, `Trade Bandh,' earlier proposed for January 25, an official release said here.

The IRDA will partially roll back the hike in third party motor insurance premium from 150 per cent to 70 per cent.

"A 70 per cent increase over the original premium would be effected... the notification in this regard will be issued on Tuesday,'' IRDA Chairman C. S. Rao told PTI.

With the announcement, the premium rate would come down to about Rs. 5,000-6,000 as compared to earlier Rs. 8,000-9,000.

Beginning this year, the third party premium rate was increased by 126-150 per cent and a common pool was created.

The partial roll back decision was taken at a meeting of the transporters with the representatives of the Ministry of Finance and Ministry of Surface Transport on January 18.

The AIMTC has called off the strike after Finance Minister P. Chidambaram limited the increase of third party premium rates of commercial vehicles, the release said.

Third Party Insurance has been a non-profit making business for insurers and with this partial roll back there would be certainly pressure on insurers to compensate the loss from some other segment, a senior official of Tata AIG General Insurance said. Following the free-pricing, many companies had reduced the own damage policy premium by up to 40 per cent. This would have to be revisited with the reduction in third party premium, he said. — PTI

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