The Insurance Authority (IA) has reminded insurance companies to adhere to vehicle insurance tariff limits as it has laid down.
The IA said, in a circular addressed to insurance companies and insurance-related professions, that while it allows motor insurers the freedom to compete by deciding their own pricing according to the experience with policyholders, or for technical or actuarial reasons, insurers should comply with tariff limits set by the Authority.
The IA stresses that any discount an insurance company wishes to offer to motor customers must take into account the company's financial position, the actuary's recommendations and tariff limits, in order to avoid any damage to the company's financial position or the rights of the insured.
Since January 2018, the IA has allowed insurers to grant a 10% reduction in motor premiums to drivers with a clean record of one year; a discount of 15% to those with two years without incident; and a discount of 20% to motorists with a clean record for three years.
In addition, this year, amid the coronavirus pandemic, the IA amended motor insurance policy regulations on 22 April to give insurance companies the power to reduce the minimum insurance premium it stipulates by up to 50% for frontline workers and other specified categories. Those eligible for discounts include workers in the healthcare sector, members of the armed forces, police and civil defence, people of determination, the elderly, and individual insurance applicants who have accident-free records.
The latest directive from the IA on adhering to tariff limits follows media reports in recent weeks that premium rates for motor insurance policies have reached their lowest levels, since the beginning of 2017 because of price undercutting by insurers vying to increase market share. The average insurance premium rate has fallen by more than 40% compared to the beginning of this year, with some rates reportedly below technically viable levels.