| Cir No | Date | Subject | Effective Date |
| FT/1/2004 | 19-3-2004 | Cover for Terrorism Risks under Fire & Engineering insurances | 1-4-2004 |
| FT/2/2004 | 25/3/2004 | GR No.16 - 'claims experience discount / loading' under AIFT | 16/4/2004 |
| FT/3/2004 | 25/3/2004 | Voluntary Deductibles under AIFT | 16/4/2004 |
| FT/4/2004 | 10/5/2004 | Cover for Terrorism Risks under Fire, Engineering and IAR Insurance Tariffs w.e.f 1-4-2004 | |
| FT/5/2004 | 18/5/2004 | Deletion of Condition no. 3 (b) of Standard Fire and Special Perils Policy | |
| FT/6/2004 | 18/5/2004 | Rating of Multiplex Theatre Complexes under All India Fire Tariff | 16/6/2004 |
| FT/7/2004 | 18/5/2004 | Long Term Policies for Dwellings | |
| FT/8/2004 | 18/5/2004 | Rating Automobile Glass Manufacturing under AIFT | |
| FT/9/2004 | 18/5/2004 | Floater Declaration Policies issued to Central Warehousing/State Warehousing Corporations and Marketing Federations of State Govts. | |
| FT/10/2004 | 3/6/2004 | Inspection of Large Fire Losses by Engineers of TAC | |
| FT/11/2004 | 29/6/2004 | Hazard Categorization of "Vegetable Ghee Factories." -Fire Protection Manual | |
| FT/12/2004 | 29/6/2004 | Rates for Add-on covers under AIFT | |
| FT/13/2004 | 5/7/2004 | Excess’ applicable under IAR policy in case of adverse Claim experience under Material Damage (Fire) section | |
| FT/14/2004 | 27/7/2004 | Mega Risks |
FT/1/2004 Date : 19-3-2004
Re: Cover for Terrorism Risks under Fire & Engineering insurances
This refers to our earlier circular FT/03/2002 dated 8-4-2002.
I Effective from 1-4-2004 premium/coverage structure for terrorism risks will be subject to the following revisions :
| Total Sum Insured
(TSI)
[MD+LOP] |
Premium on Total Sum Insured |
Overall (MD+LOP) liability cap per location/compound |
| TSI upto Rs.200 crores | Full rate of Re.0.50%o (for Industrial risks) or Re.0.30%o (for non-industrial risks) | TSI |
| TSI exceeding Rs.200 crores but not exceeding Rs.300 crores | a) Full rate of Re.0.50%o (for
Industrial risks) or Re.0.30%o (for non-industrial risks) on the first
Rs.200 crores and
b) Re.0.375%o (for Industrial risks) or Re.0.225%o (for non-industrial risks) on the balance TSI |
TSI |
| TSI exceeding Rs.300 crores but not exceeding Rs.2000 crores | a) Full rate of Re.0.50%o (for
Industrial risks) or Re.0.30%o (for non-industrial risks) on the first
Rs.200 crores and
b) Re.0.375%o (for Industrial risks) or Re.0.225%o (for non-industrial risks) on the balance TSI |
Rs.300 crores |
| TSI exceeding Rs.2000 crores | a) Full rate of Re.0.50%o (for
Industrial risks) or Re.0.30%o (for non-industrial risks) on the first
Rs.200 crores and
b) Re.0.375%o (for Industrial risks) or Re.0.225%o (for non-industrial risks) on the next Rs.1800 crores and c) Re.0.30%o (for industrial risks) or Re.0.18%o (for non-industrial risks) on the balance TSI in excess of Rs.2000 crores |
Rs.300 crores |
| Policy period | Discount | |
| Initial Policy period | Extension period | |
| Upto 1 year | Nil | Nil |
| Upto 2 years | 1st year 20 %
2nd year 20 % |
Nil
Nil |
| Beyond 2 years | 1st year 30 %
2nd year 30 % 3 year & subsequent year 30 % |
Nil
Nil
Nil |
III The rates prescribed above will continue to be net rates and will not be subject to any discount/commission.
IV Deductible as communicated in IRDA circular no. D-4/IRDA/3/2002 dtd. 28-3-2002 shall continue to apply.
Insurers are requested to inform their operating offices suitably.
Secretary
FT/ 2 /2004 Date : 25th March, 2004
Ref : GR No.16 - 'claims experience discount / loading' under AIFT
General Rules and Regulations - No.16 - "Claims Experience Discount/Loading" of Section I of the AIFT have been revised to read as under :
16 : claims experience discount/loading
Risks having sum insured (on buildings and contents of all blocks in one compound of one complex in one location) above Rs. 50 Crores rateable under Sections IV,V, VI & VII of this tariff shall attract claims experience discounts/loadings based on the incurred claims experience of all the policies covering the Insured's interest for the preceding 36 months excluding the expiring policy period which shall not be less than 9 months (If there is any break in insurance, available 36 months experience shall be taken into account) as per the table given below :
| Incurred claims ratio for the preceding 36 months excluding the expiring policy period | Discount (%) | Loading (%) |
| Upto 5% | 15 | -- |
| Above 5% & upto 10% | 10 | -- |
| Above 10% & upto 15% | 5 | -- |
| Above 15% & upto 30% | -- | -- |
| Above 30% & upto 40% | -- | 2.5 |
| Above 40% & upto 55% | -- | 5 |
| Above 55% & upto 75% | -- | 10 |
| Above 75% & upto 100% | -- | 15 |
| Above 100% & upto 150% | -- | 17.5 |
| Above 150% & upto 200% | -- | 20 |
| Above 200% & upto 300% | -- | 25 |
| Above 300% & upto 500% | -- | 50 |
| Above 500% | -- | 100 |
| Note 1: In case the claim experience
exceeds 200% additional excess of 2.5% of the claim amount of each and
every claim subject to minimum of Rs.10,000/- shall apply
(i.e minimum total excess of Rs.20,000/-). Note 2: The above loading will not be applicable for Dwellings. | ||
In the event of the insured transferring his insurance on renewal from one insurer to another insurer, the transferee insurer may allow claims experience discount/loading on the basis of the claims experience details from the previous insurer(s). Evidence of the insured's entitlement for claims experience discount/loading in the form of a letter confirming the claims experience details from the previous insurer(s) will be required for this purpose.
Where the insured is unable to produce such evidence of claims experience details from the previous insurer(s), the present insurer may allow claims experience discount/loading as applicable after obtaining written declaration from the insured as below:
" I/We declare that the claims experience details for previous 36 months period excluding the expiring policy period and discount/loading (strike out whichever is not applicable) claimed by me/us are correct (copies of the previous policies enclosed). I/We further undertake that if this declaration is found to be incorrect, all benefits under the policy will stand forfeited. "
Notwithstanding the above declaration, the insurer allowing the claims experience discount/loading will be obliged to write to the policy issuing office of the previous insurer by recorded delivery calling for confirmation of the claims experience details and the previous insurer shall be obliged to provide the information sought within 30 days of the receipt of the letter of inquiry failing which the matter will be treated as a breach of tariff on the part of the previous insurer. Failure of the insurer granting the claims experience discount to write to the previous insurer within 21 days after granting the cover will also constitute a breach of the tariff. The aggrieved insurer is required to report the breach to TAC immediately.
The above revisions will be effective for all new business/renewals falling due on or after 16th April, 2004.
Insurers are requested to advise their operating offices suitably in this regard.
Secretary
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FT/ 3 /2004 Date : 25th March, 2004
Re: Voluntary Deductibles under AIFT
Tariff Advisory Committee has decided to revise the following provisions in respect of 'Voluntary Deductibles' under AIFT :
(a) the 'Table of discounts for Voluntary Deductibles' appearing under Rule No.20 - Voluntary Deductibles, Section I, General Rules and Regulation of AIFT
(b) sl. No. 'K'-'Voluntary Deductible Clause' appearing in 'Annexure A' of AIFT (page 110)
The revised provisions are as under :
(a) Table of discounts for Voluntary Deductibles
| Deductible Amount |
Discount (%)
| |
| AOG Perils (5* % of claim amount subject to minimum of Rs. in lakhs ) | Other perils
(of Rs. in lakhs) | |
| 10 | 5 | 2 |
| 20 | 10 | 4 |
| 30 | 15 | 6 |
| 60 | 30 | 8 |
| 100 | 50 | 10 |
| 500 | 100 | 12.5 |
| 1,000 | 500 | 15 |
| 2,000 | 1,000 | 20 |
| > 2,000 | > 1,000 | 25 |
| Note
:1) Voluntary Deductible once opted shall apply to the entire property
insured and no selection shall be allowed.
*2) Wherever additional excess of 2.5% is applicable the 5% indicated above shall read as 7.5% | ||
(b) Voluntary Deductible Clause :
'It is hereby declared and agreed that the insured having opted a voluntary deductible of ...... out of net amount of each and every admissible claim under the fire policy(ies) covering the said premises, the company has allowed a discount of ........ % on the final premium payable for the policies and Add-on Covers.
It is further agreed that the above voluntary deductible opted shall replace the compulsory excess stipulated under "General Exclusions" attached to the policy(ies) and/or for add-on covers.'
The change will be effective for all new business/renewals falling due on or after 16th April, 2004.
Insurers are requested to advise their operating offices suitably in this regard.
Secretary GO TO INDEX
Re: Cover for Terrorism Risks under Fire,Engineering and IAR Insurance Tariffs w.e.f 1-4-2004
This refers to our circular no.FT/1/2004 dated 19-3-2004.
It is clarified that for the unexpired period of existing policies expiring after 1-4-2004 with Total Sum Insured (MD+LOP) exceeding Rs.200 crores, the overall liability cap for terrorism risks per location/compound may be increased as per column - II of the following table:
|
I |
II |
|
Total Sum Insured (MD+LOP) |
Overall (MD+LOP) liability cap per location/compound |
|
Exceeding Rs.200 crores but not exceeding Rs.300 crores |
Total Sum Insured
|
|
Exceeding Rs.300 crores |
Rs.300 crores |
The change in the overall liability cap as above may be endorsed on the policies without charging any additional premium.
All other terms and conditions of our circular no.FT/1/2004 dated 19-3-2004 remain unchanged.
Insurers are requested to inform their operating offices suitably.
Secretary
FT/ 5 /2004 Date : 13th May, 2004
Re: Deletion of Condition no. 3 (b) of Standard Fire and Special Perils Policy
Arising out of a representation from an insurer it has been decided to allow insurers to delete condition no-3(b) of Standard Fire and Special Perils policy for dwellings rateable under Section III.
Insurers are requested to advise their operating offices suitably.
Secretary
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FT/ 6 /2004 Date : 18th May, 2004
Re : Rating of Multiplex Theatre Complexes under All India Fire Tariff
It has been decided to rate Multiplex Theatre Complexes containing shopping malls, offices, restaurants, cinema theatres and utilities as under :
|
(i) |
entire complex except the contents |
: |
as per tariff item ‘cinema theatres’ (risk code - 051) under section - IV of AIFT
|
|
(ii) |
contents |
: |
to be rated ‘per-se’ as per relevant section of AIFT |
T
he changes will be effective for all new business/renewals falling due on or after 16th June, 2004.Insurers are requested to advise their operating offices suitably.
Secretary
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FT/ 7 /2004 Date : 18th May, 2004
Re : Long Term Policies for Dwellings
Reference is drawn to rule no. 9 - ‘Long Term policies for Dwellings’ under Section III of All India Fire Tariff restricting issuance of long term policies only to house/flat owners.
Arising out of a representation from an insurer, it is clarified that insurers are permitted to issue such policies only to house/flat owners and not to others who do not own the house/flat.
I
nsurers are requested to advise their operating offices suitably.Secretary
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FT/ 8 /2004 Date : 18th May, 2004
Re : Rating Automobile Glass Manufacturing under AIFT
Arising out of a representation from an insurer it is clarified that the process of manufacture of tempered windshield glasses used in automobiles shall be rated under tariff entry ‘Glass manufacturing’ at Rs 2.00%o (Risk code-093 and Rate code-07).
Insurers are requested to advise their operating offices suitably.
Secretary
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FT/ 9 /2004 Date : 18th May, 2004
Re : Floater Declaration Policies issued to Central Warehousing/State Warehousing Corporations and Marketing Federations of State Govts.
Reference is drawn to TAC Circular FT/4/2001 dated February 9, 2001 prescribing special rates for covering the stocks in warehouses and godowns under floater declaration policies issued to the above named insureds.
Insurers may continue to charge the same rates for the policy periods 2003-04 and 2004-05.
Insurers are requested to advise their operating offices suitably.
SecretaryRe: Inspection of Large Fire Losses by Engineers of TAC
This refers to our earlier circular No.FT/11/2003 dated December 15, 2003.
The Authority has approved discontinuation of inspection of large fire losses by engineers of TAC w.e.f. May 21, 2004.
Large fire losses occurring on or after May 21, 2004 may be inspected by the engineers/officers of the insurance companies. A standard format in which the companies shall provide information to TAC on large losses will be issued in due course.
In the meanwhile, insurance companies may forward a copy of the inspection report of their engineers/officers to TAC.
Insurers are advised to inform their operating offices suitably.
Secretary
Re: Hazard Categorization of "Vegetable Ghee Factories." -Fire Protection Manual
The entry ‘ghee factories (other than vegetable)’ appearing under list of Ordinary Hazard occupancies in section 7.2.2 of ‘Fire Protection Manual’ stands amended as ‘ghee factories including vegetable ghee manufacturing’ with immediate effect.
Insurers are requested to note the above change and advise their operating offices suitably.
Secretary
____________________________________________________________
FT/ 12 /2004 Date : 29 - 6-2004
Re: Rates for Add-on covers under AIFT.
It is clarified that rates for add-on perils namely, earthquake, terrorism, spontaneous combustion and forest fire are to be added (whenever such perils are opted) to the policy rate for providing add-on covers like architects, surveyors & consulting engineers fees, removal of debris, deterioration of stocks in cold storage premises, start up expenses etc.
Insurers are requested to note the above clarification and advise their operating offices suitably.
Secretary
Re: ‘Excess’ applicable under IAR policy in case of adverse
Claim experience under Material Damage (Fire) section
It is clarified that in case claim experience exceeds 200% for the material damage portion (Fire section) of IAR policy additional excess applicable under AIFT will also be applicable under IAR insurance tariff. This additional excess will be in addition to IAR policy excess. Where voluntary deductible is opted under IAR policy , additional excess will apply in addition to the voluntary deductible.
Insurers are requested to note the above clarification and advise their operating offices suitably.
Secretary
Re
: Mega Risks
Attention of all insurers is invited to TAC circular reference No.FT/24/2001 dated Dec. 21, 2001, enumerating the mandatory guidelines to be followed in the calculation of PML. It is clarified that the aforesaid guidelines shall also be applicable for the purpose of determining whether a risk qualifies to be treated as a `Mega Risk’ as defined vide TAC circular reference No.Fire/369 dated Dec. 6, 1999.
Attention is also drawn to TAC’s circular reference No.FT/10/2003 dated June 20, 2003 wherein it is stipulated that insurers will have to file non-tariff products in respect of such Mega Risks with the IRDA under the `File & Use’ system.
Insurers who decide to revert to tariff covers in respect of any such risk which was treated by them as a Mega Risk earlier shall not be permitted to do so without prior approval of the TAC. For this purpose insurers shall apply to TAC alongwith the inspection report of their engineer giving the PML details as calculated in accordance with our circular No.FT/24/2001 dated December 21, 2001.
Further, it will not be permissible to treat one part of a risk as Mega Risk and another part under the applicable tariffs.
Insurers are requested to take note of the above and advise their operating offices suitably.
Secretary