Posted in Finance, Accounting and Economics Terms, Total Reads: 408
When particular goods are regulated in terms of prices and other terms and conditions by a government organization, it is called as tariffed goods. The regulators decide on the price and terms and condition associated with the goods and services. If market forces determine the prices of the goods and the company is free to determine its policies, then the goods or sector id detariffed. The company need not file any forms with the regulator and is free to set any standards as per the market forces.
Tariff was used in sectors where public knowledge is minimum and it protects the public from fraud or may impact the economy at macro level. The insurance sector was detariffed in the year 2008. Prior to that the insurance companies had to follow the pricing and product structure as per the regulator mandate. However post 2008 the sector blossomed, offering a plethora of services. Stiff competition made prices competitive and large number of players focussed to play on gaining market share. This led to deeper penetration of the product and also wide ranging of services.