Latest GIC norms for Deletion of STFI and / or EQ perils under Fire policy

As per the current GIC treaty norms, STFI and/or EQ perils can be deleted subject to the condition that total Occupancy rate after deletion of peril(s) should not be less than minimum nat cat rates (STFI + EQ) as per min rates published by GIC.
Suppose a risk having flexa rate of 0.42%o falls under EQ zone 2 (0.25%o) and insured wants deletion of STFI peril, it can be allowed if the sum total of minimum Flexa and EQ rate is more than min STFI & EQ rate i.e. 0.25% + 0.25%o = 0.50%o. 
In the instant case since the sum total of flexa and EQ shall be 0.42 + 0.25 i.e. 0.67%o which is higher than minimum rate to be charged, STFI deletion can be allowed by charging rate of 0.67%o.
On the contrary if insured wants deletion of STFI & EQ both, same can be permitted subject to charging minimum rate of 0.50%o because flexa rate (0.42) alone is less than minimum rate to be charged.

Comments

  1. UnknownSeptember 11, 2020 at 10:59 PM

    Thanks for the information

    ReplyDelete
  2. UnknownSeptember 12, 2020 at 8:51 AM

    Sir, please throw light on wages insurance

    ReplyDelete
  3. UnknownSeptember 12, 2020 at 12:20 PM

    Thanks for the knowledge and information.

    ReplyDelete
  4. UnknownSeptember 12, 2020 at 7:04 PM

    Nowadays VP, no one is opting for deletion of these covers

    ReplyDelete
  5. Bipin ChauhanDecember 10, 2020 at 12:51 PM

    Respected Sir, Please confirm whether this new rule of minimum Nat Cat Rate is applicable for all Sections i.e. Sec-III, IV, V, VI, VII ??

    ReplyDelete
    Replies
    1. PraveenAugust 3, 2021 at 4:33 PM

      Yes, it is applicable on all the products falling under the definition of SFSP.

      Delete

Post a Comment

Popular posts from this blog

Understanding difference between "Put to Use" cover and "Continuity cover" under project insurance policies

Project insurance policies exclude part of project which is completed and put into use for intended purpose. By virtue of taking "Put into use" add on cover, insured buys back this exclusion with certain loss limits and period as defined in add on cover by the insurance company. Say for example, it can be given for a loss limit of rupees 10 crores for a period of 6 months. That means, any loss or damage to insured property which is put into use up to  rupees 10 crores shall remain covered under the policy up to a maximum period of 6 months or the expiry of policy, whichever is earlier. Continuity cover is granted in projects where integral testing is required after erection of all plant and machineries before final commissioning of plant. As per this addon cover, any machinery which is tested and commissioned but is required  to wait for completion of remaining portion of plant, shall be allowed to remain covered under the policy till successful completion of integral testing...
Read more

BI claim due to RSMD peril

We all know that a BI claim is payable only if the loss is admissible under material damage policy and the damage to insured property causes interruption in  production causing loss of turnover during the interruption period. Now if there is a strike called by workers who do not allow anyone to enter the plant premises causing production loss, BI claim would not be admissible unless there is a physical loss or damage to insured property leading to production loss. Few years back Maruti Manesar plant suffered production loss for nearly six months due to Rite and Strike by company workers who unfortunately killed one of the senior officials of the company and damaged security gate and cabin etc. Maruti could not lodge BI claim because they did not have BI policy at that time. There was  big debate on the point that had they taken BI policy, whether they would have claimed the loss of production under BI policy. IN MY OPINION EVEN IF THEY HAD B I POLICY, NO BI CLAIM WOULD HAVE BE...
Read more

What is Margin Clause?

Nowadays, it is commonly seen in market that Clients are asking for 'Margin clause' as well as 'Waiver of Under insurance' in many property policies.  At the same time they are demanding Underwriter's confirmation for clubbing of these two clauses in the event of claim so as to enjoy higher 'Waiver of Under insurance'.  Unfortunately, some Companies are agreeing to this unknowingly.  This understanding is wrong and should not be accepted because these two can not be clubbed in the event of claim. At the same time it is also to be understood that margin clause and escalation clause are two different covers and while  applying Underinsurance, the benefit of increased sum insured would be allowed only if insured has taken escalation clause by payment of additional premium. Margin clause says that in case of sum insured variation up to 10%, whether up or down, no adjustment of premium is required to be done. T his should not be confused with esc...
Read more