Insurance premiums are fixed by a body known as the Tariff Advisory Committee which controls and regulates the rates, advantages, terms and conditions that may be offered by insurers in respect of General Insurance Business relating to Fire, Marine (Hull), Motor, Engineering and Workmen Compensation. Detariffing refers to doing away with such fixation of tariffs.
Responding to the demands from the industry, the IRDA has notified in September 2005, that a detariffing regime in respect of non-life insurance viz., liability insurance, indemnity insurance, personal lines like health insurance, and marine hull insurance, will come into place with effect from January 1, 2007.
Detariffing is expected to make the prices of these premiums market driven. It is expected that the premiums will take a southward direction. In a detariffed regime insurance companies are expected to focus on personal lines of business like health and motor insurance in a stronger way than at present.