New Delhi, Aug 19 (PTI) Regulator IRDAI is mulling a not-for-profit company for loss prevention and minimisation in the general insurance industry which among other things could be mandated to set up a Garage Network Master for standardising the vehicle repair cost.

The not-for-profit company, to be jointly set up by the Insurance Regulatory and Development Authority of India (IRDAI) and the industry, will endeavour to promote safety and loss prevention, said the report of a Working Group which has been made public for stakeholders' comments by September 4.

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The company, among other things, will be required to set standards and benchmarks for various activities from the insurance perspective.

"The body can lay down guidelines on repair charges for parts for each model of vehicle to bring standardisation across the industry and for the manufacturers to adhere to as this will be done in consultation with all the stakeholders for a transparent mechanism to be evolved,” the report said.

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This may be done by preparing a Garage Network Master which will tabulate the average repair costs in terms of repair of each part, average painting costs and average turnaround times for each type of repair which can be accessed by the industry for ready comparison.

The report has also proposed blacklisting of suspicious garages. Keeping in view synergies involved and the need for collaboration between various stakeholders for effective loss prevention and minimization in the general insurance industry, the Authority had set up a Working Group to study the current scenario and make recommendations.

Loss prevention and minimisation activities are part and parcel of what the insurers do, as it helps improve their claims experience in various ways. Starting from risk assessment to payment of claims under a policy, insurers seek to take steps to prevent and minimise losses.

The report said as per the current practices amongst insurers in India, loss control is seen, by and large, as incidental to underwriting and business growth.

Attention to loss control must happen through three fronts – prudent underwriting / risk selection based on risk inspection, prudent claims management and prudent risk management (investigation and fraud control).

Some insurers also engage loss surveyors to get the risk surveyed on ad hoc basis.

As per the report, the proposed company should not be directly involved in commercial activities like risk inspection, risk management, tracing of cargo, cargo supervision, route surveys, project monitoring or setting up motor garages.

These activities should be left to private business units. These units need to be accredited by this institution, it said and added that to start with, the body can work in the areas of property (including cargo) and motor lines of insurance businesses.

Apart from education, research and creating the right awareness through training, seminars the body ought to be involved in activities such as setting standards and benchmarks, conducting post loss studies, giving risk improvement suggestions in a generic manner, collaborate with bodies such as IIBI, carry out forensic studies and build capacity in these areas.

Knowledge sharing being one of the primary objectives, the body should publish reports on studies carried out by it and be actively involved in dissemination through various digital means, the report said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)