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MOTOR INSURANCE FOR THIRD PARTY (ACT ONLY POLICIES)

INTRODUCTION
In India, under the provisions of the Motor Vehicles Act, 1988, it is mandatory that every vehicle should have a valid Insurance to drive on the road. Any vehicle used for social, domestic and pleasure purpose and for the insurer's business motor purpose should be insured. Insurance is a contract whereby one party, the insurer, undertakes in return for a consideration, the premium , to pay the other, the insured or assured, a sum of money in the event of the happening of a , or one of various ,specified uncertain events. Insurance developed from the fourteenth century as a means of spreading huge risks attendant on early maritime enterprises; life and fire insurance developed later. The main classes of insurance are life and other personal insurance, marine insurance, accident or property insurance and liability insurance when the sum becomes payable when legal liability is incurred as for personal injuries or professional negligence to another. Motor third-party insurance or third-party liability cover, which is sometimes also referred to as the 'act only' cover, is a statutory requirement under the Motor Vehicles Act. It is referred to as a 'third-party' cover since the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the insured and the insurance company. The policy does not provide any benefit to the insured; however it covers the insured's legal liability for death/disability of third party loss or damage to third party property. Historical Background of third Party Insurance: Chapter VIII of the 1939 Act and Chapter XI of the 1988 Act have been enacted on the pattern of several English statutes which is evident from the report of Motor Vehicles Insurance Committee,1936-1937In order to find out the real intention for enacting Ss.96 of the 1939 Act which corresponds to Ss.149 of the 1988 Act, it is relevant to trace the historical development of the law for compulsory third party insurance in England. Prior to 1930, there was no law of compulsory insurance in respect of third party rights in England. As and when an accident took place an injured used to bring action against the motorist for recovery of damages. But in many cases it was found that the owner of the offending vehicle had no means to pay to the injured or the dependant of the deceased and in such a situation the claimants were unable to recover damages. It is under such circumstances that various legislations were enacted. To meet the situation it is for the first time the Third Parties Rights Against Insurance Act,1930 was enacted in England.

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MOTOR INSURANCE FOR THIRD PARTY (ACT ONLY POLICIES)

Subsequently in 1934, the second Road Traffic Act was enacted. The object of this legislation was to satisfy the liability of the insured. Under this enactment three actions were provided .The first was to satisfy the award passed against the insured. The second was that, in case the insurer did not discharge its liability the claimant had the right to execute decree against the insurer. However, in certain events, namely, what was provided in section Ss.96(2)(a) which corresponds to section 149 (2)(a) of the 1988 Act, the insurer could defend his liability. The third action provided for was contained in S.10(3) of the Road Traffic Act. Under this provision, the insurer could defend his liability to satisfy decree on the ground that insurance policy was obtained due to misrepresentation or fraud. This provision also found place in S.149 (2)(b) of the 1988 Act. While enacting the 1939 Act and the 1988 Act, all the three actions were engrafted in S.96 of the 1939 Act and Section 149 of the 1988 Act. However neither the 1939 Act, nor the 1988 Act conferred greater rights on the insurer than what had been conferred in English Law. Thus, in common law, an insurer was not permitted to contest a claim of a claimant on merits, i.e. offending vehicle was not negligent or there was contributory negligence.

Relevant Provisions of Motor Vehicles Act,1988:

Chapter 11 (Section 145 to 164) provides for compulsory third party insurance, which is required to be taken by every vehicle owner. It has been specified in Section 146(1) that no person shall use or allow using a motor vehicle in public place unless there is in force a policy of insurance complying with the requirement of this chapter. Contravention of the provisions of section 146 is an offence and is punishable with imprisonment which may extend to three months or with fine which may extend to one thousand rupees or with both (section 196). Section 147 provides for the requirement of policy and limit of liability. Every vehicle owner is required to take a policy covering against any liability which may be incurred by him in respect of death or bodily injury including owner of goods or his authorized representative carried in the vehicle or damage to the property of third party and also death or bodily injury to any passenger of a public service vehicle. According to this section the policy not require covering the liability of death or injuries arising to the employees in the course of employment except to the extent of liability under Workmen Compensation Act. Under Section 149 the insurer have been statutorily liable to satisfy the judgment and award against the person insured in respect of third party risk.

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MOTOR INSURANCE FOR THIRD PARTY (ACT ONLY POLICIES)

THIRD PARTY INSURANCE


There are two quite different kinds of insurance involved in the damages system. One is Third Party liability insurance, which is just called liability insurance by insurance companies and the other one is first party insurance. A third party insurance policy is a policy under which the insurance company agrees to indemnify the insured person, if he is sued or held legally liable for injuries or damage done to a third party. The insured is one party, the insurance company is the second party, and the person you (the insured) injure who claims damages against you is the third party. Sectio n 145(g) "third party" includes the Government. National Insurance Co. Ltd. v. Fakir Chand, third party should include everyone (other than the contracting parties to the insurance policy), be it a person traveling in another vehicle, one walking on the road or a passenger in the vehicle itself which is the subject matter of insurance policy. Third party insurance is the minimum legal requirement in the UK, but it has its limitations. A third party policy covers any liability for injury to other people including your passengers - and damage to another person's property. So, if you drive into the back of someone's car, denting their vehicle and knocking over their garden wall, the policy will pay out. We will also be covered for any accidents that arise from the use of a caravan or trailer attached to your vehicle, as well as any accidents caused by your passengers. A third party insurance policy does not, however, cover you or your car if you are to blame for an accident. In the example above, you would have to pay for any damage to your own vehicle. If your car is damaged in an accident that is the fault of another driver, you would make a claim against their insurance. What if your car is stolen, destroyed in a fire or damaged by vandals? Again, third party car insurance would not pay out, so the cost of any repairs or a new car would come out of your own pocket. If your car is not worth very much, you might decide that third party insurance cover is adequate. But you should always compare the price with comprehensive insurance to make sure you are getting a good deal. Drivers, particularly young male drivers, traditionally opted for third party car insurance because it was usually cheaper than comprehensive cover. But the increase in popularity of third party policies has pushed up the price. Young male drivers are statistically more likely to make a claim, so they are more expensive to insure. And insurers recoup the higher cost by charging higher premiums.

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SALIENT FEATURES OF THIRD PARTY INSURANCE


Third party insurance is compulsory for all motor vehicles. In G. Govindan v. New India Assurance Co. Ltd.Third party risks insurance is mandatory under the statute .This provision cannot be overridden by any clause in the insurance policy. Third party insurance does not cover injuries to the insured himself but to the rest of the world who is injured by the insured. Beneficiary of third party insurance is the injured third party, the insured or the policy holder is only nominally the beneficiary of the policy. In practice the money is always paid direct by the insurance company to the third party (or his solicitor) and does not even pass through the hands of the insured person. In third party policies the premiums do not vary with the value of what is being insured because what is insured is the legal liability and it is not possible to know in advance what that liability will be. Third party insurance is almost entirely fault-based.(means you have to prove the fault of the insured first and also that injury occurred from the fault of the insured to claim damages from him) Third party insurance involves lawyers aid The third party insurance is unpopular with insurance companies as compared to first party insurance, because they never know the maximum amounts they will have to pay under third party policies.

Insurance Companies have been allowed no other defence except the following: -

(1) Use of vehicle for hire and reward not permit to ply such vehicle. (2) For organizing racing and speed testing; (3) Use of transport vehicle not allowed by permit. (4) Driver not holding valid driving license or have been disqualified for holding such license. (5) Policy taken is void as the same is obtained by non-disclosure of material fact.

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SECTION152. SETTLEMENT BETWEEN INSURERS AND INSURED PERSONS.

(1) No settlement made by an insurer in respect of any claim which might be made by a third party in respect of any liability of the nature referred to in clause (b) of sub-section (1) of section 147 shall be valid unless such third party is a party to the settlement.

(2) Where a person who is insured under a policy issued for the purposes of this Chapter has become insolvent, or where, if such insured person is a company, a winding up order has been made or a resolution for a voluntary winding up has been passed with respect to the company, no agreement made between the insurer and the insured person after the liability has been incurred to a third party and after the commencement of the insolvency or winding up, as the case may be, nor any waiver, assignment or other disposition made by or payment made to the insured person after the commencement aforesaid shall be effective to defeat the rights transferred to the third party under this Chapter, but those rights shall be the same as if no such agreement, waiver, assignment or disposition or payment has been made.

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LEGAL DEFENCE AVAILABLE TO THE INSURANCE COMPANIES TOWARDS THIRD PARTY


The Insurance Company cannot avoid the liability except on the grounds and not any other ground, which have been provided in Section 149(2). In recent time, Supreme Court while dealing with the provisions of Motor Vehicle Act has held that even if the defence has been pleaded and proved by the Insurance Company, they are not absolve from liability to make payment to the third party but can receive such amount from the owner insured. The courts one after one have held that the burden of proving availability of defence is on Insurance Company and Insurance Company has not only to lead evidence as to breach of condition of policy or violation of provisions of Section 149(2) but has to prove also that such act happens with the connivance or knowledge of the owner. If knowledge or connivance has not been proved, the Insurance Company shall remain liable even if defence is available. Driving License: Earlier not holding a valid driving license was a good defence to the Insurance Company to avoid liability. It was been held by the Supreme Court that the Insurance Company is not liable for claim if driver is not holding effective & valid driving licence. It has also been held that the learner's licence absolves the insurance Company from liability, but later Supreme Court in order to give purposeful meaning to the Act have made this defence very difficult. In Sohan Lal Passi's v. P. Sesh Reddy it has been held for the first time by the Supreme Court that the breach of condition should be with the knowledge of the owner. If owner's knowledge with reference to fake driving licence held by driver is not proved by the Insurance Company, such defence, which was otherwise available, can not absolve insurer from the liability. Recently in a dynamic judgment in case of Swaran Singh, the Supreme Court has almost taken away the said right by holding; (i) Proving breach of condition or not holding driving licence or holding fake licence or carrying gratuitous passenger would not absolve the Insurance Company until it is proved that the said breach was with the knowledge of owner. (ii) Learner's licence is a licence and will not absolve Insurance Company from liability. (iii) The breach of the conditions of the policy even within the scope of Section 149(2) should be material one which must have been effect cause of accident and thereby absolving requirement of driving licence to those accidents with standing vehicle, fire or murder during the course of use of vehicle. This judgment has created a landmark history and is a message to the Government to remove such defence from the legislation as the victim has to be given compensation.

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MOTOR INSURANCE FOR THIRD PARTY (ACT ONLY POLICIES)

NATURE AND EXTENT OF INSURERS LIABILITY (SECTION 147)


According to the provisions of this section the policy of insurance must be issued by an authorized insurer.It must be as per requirements as specified in subsection (2).It must insure against liability in respect of death or bodily injury or damage to property of a third party. Third party includes owner of the goods or his authorized representative carried in the vehicle and any passenger of a public service vehicle. The policy of insurance must cover: 1.Liability under the Workmens compensation Act,1923 in respect of death or bodily injury to any such employee (a) engaged in driving the vehicle, or (b) the conductor or ticket examiner if it is a public service vehicle ,or 2. any contractual liability: Section 147 has to be given wider, effective and practical meaning so that it may benefit various categories of persons entitling them to claim compensation from the insurer or the insured or both. Insurer's liability commences as soon as the contract of insurance comes into force. The liability remains in existence during the operation of the policy. If the existing policy is renewed the risk is covered from the moment the renewal of the policy comes into force. If the accident occurs before the renewal comes into existence, the insurer cannot be made liable. It is the primary duty of the vehicle owner to prove that his vehicle was insured with a particular company. If he fails to comply with it he will have to pay the entire amount of compensation in the case. In case where there is a dispute in respect of the vehicle having been insured by an assurance company, the tribunal must give its finding in the matter, it is its duty to do so. After a certificate of insurance is issued it does not lie in the mouth of the insurer to deny his liability. If the insurer has been a victim of fraud he can recover the amount from the insured by a separate action against him. Oriental Insurance Co. v. Inderjit Kaur If the insurer has issued a policy to cover the bus without receiving the premium therefore, he has to indemnify third parties in respect of the liability covered by the policy. He cannot avoid the liability arguing that he was entitled to avoid or cancel the contract.Liability for injury to certain persons or class of persons. Insurer is not liable for any harm suffered by a passenger traveling in a private car neither for hire nor for reward. Similar is the position of a pillion rider on a scooter.

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INSURERS LIABILITY TO VEHICLE-OWNER


A contract of insurance is a personal contract between the insurer and the insured. It is for the purpose of indemnifying the insured for damage caused due to accident by the vehicle , to a third party.To make the insurer liable the policy of insurance must be in the name of the owner of the vehicle.[9]Owner of the vehicle as defined in Section 2(30) is a person in whose name the motor vehicle stands registered. A person in possession of a vehicle under a hire-purchase agreement or an agreement of lease or hypothecation is also covered by the definition, no matter he has exercised his option to purchase the vehicle or not. Section 157(1) makes it clear that when the owner of a vehicle transfers the ownership of the vehicle , the policy of insurance and the certificate of insurance shall be deemed to have been transferred in favour of the purchaser of the vehicle with effect from the date of its transfer.This deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. According to subsection (2) the transferee has to apply within 14 days from the date of transfer to the insurer for effecting necessary changes in the certificate and in the policy of insurance. If the certificate of insurance and the policy are not transferred , the insurer could not be made liable even though the vehicle is transferred. It is to be remembered that an insurance policy is a personal contract between the parties for indemnifying the insured in case of an accident covered under the policy. If the vehicle is transferred by an insured to another person, the insurance policy lapses upon the transfer. In such a case the benefit of the policy is not available to the transferee, without an express agreement with the insurance company.

Liability in respect of damage to property [S.147(2)]: For damage to property of a third party under 1939 Act the limit of liability is Rs 6000 in all, irrespective of the class of the vehicle. Under 1988 Act the position as laid down by section 147 (2) in regard to liability is as under: (i) For death or personal injury to a third party, the liability of the insurer is the amount of liability incurred, i.e. for the whole amount of liability. (ii) For damage to property of a third party the liability of the insurer is limited to Rs. 6000 as was under the 1939 Act.

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MOTOR INSURANCE FOR THIRD PARTY (ACT ONLY POLICIES)

MOTOR VEHICLES (THIRD PARTY INSURANCE)


TABLE OF PROVISIONS SECTION1. Short title

2. Interpretation

3. Application for approval and order

4. Users of motor vehicles to be insured against third party risks

5. Exemptions

6. Requirements in respect of policies

7. Payments and insurance in respect of emergency treatment of injuries arising from the use of motor vehicles

8. Provisions as to claims for, and supplementary provisions as to, payments for emergency treatment

9. Certain conditions of policies to be of no effect

10. Avoidance of restrictions on the scope of policies covering third party risks

11. Duty of insurance company to satisfy judgments against persons insured in respect of third party risks

12. Rights of third parties against insurance companies

13. Duty to give information to third parties

14. Certain settlements between insurer and insured to be of no effect

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15. Bankruptcy, etc., of insured persons not to affect certain claims

16. Owner to give insurance company notice of all accidents affecting motor vehicles and of consequent actions

17. Insurance company may settle claims

18. Proceedings may be stayed on refusal or neglect to allow medical examination

19. Surrender of certificate of insurance on cancellation of policy

20. Certificates to be produced

21. Duty of owner

22. False statements and falsification

23. Reference to certificate deemed to be reference to certificates where more than one issued

24. Passengers for hire not to contract themselves out of benefits conferred by this Act

25. Prohibition against soliciting for authority to make claims and commence actions, etc.

26. Applicant for vehicle licence to produce evidence of necessary insurance

27. Appeal against refusal to issue or against cancellation of policy

28. General penalty

29. Regulations

30. Application of section 4 to use of Government motor vehicles


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1. Short title

This Act may be cited as the Motor Vehicles (Third Party Insurance) Act. 2. Interpretation

1. In this Act, unless the context otherwise requires"approved insurance company" means an insurance company approved by the Minister for the purposes of this Act; "driving licence" means a licence to drive a motor vehicle granted under the provisions of any Traffic Act for the time being in force; "hospital" means an institution, not being an institution carried on for profit, which provides medical or surgical treatment for in-patients; "passenger vehicle" means a motor vehicle used for carrying passengers for hire or reward whether on an isolated occasion or otherwise;"use" means use on a road.

(2) If any word or expression used in this Act is defined in any Traffic Act for the time being in force, such word or expression shall, unless the context otherwise requires, bear in this Act the meaning assigned to it in such Traffic Act.

3. Application for approval and order

(1) An insurance company willing to undertake insurance business in terms of this Act may apply to the Minister by petition under the hand of the principal officer of the company in Fiji to be declared an approved insurance company under this Act. (2) Every application under the provisions of subsection (1) shall contain or be accompanied by a certificate under the seal of the company that the company is willing to undertake insurance business in Fiji in terms of this Act. On receipt of such application and certificate, the Minister may, by order, declare the company to be an approved insurance company for the purposes of this Act. (3) A certificate under the provisions of subsection (2) may be revoked by notice to such effect under the seal of the company delivered to the Minister and the company shall thereupon cease to be an approved insurance company and the declaration of approval shall be cancelled by order of the Minister: Provided that such revocation shall not affect any contract of insurance entered into by that company in accordance with this Act prior to such revocation and, in respect of any such contract, the company shall be deemed not to have ceased to be an approved insurance company

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4. Users of motor vehicles to be insured against third party risks

(1) Subject to the provisions of section 5, no person shall use, or cause or permit any other person to use, a motor vehicle unless there is in force in relation to the use of that motor vehicle by such person or other person, as the case may be, such a policy of insurance in respect of third party risks as complies with the provisions of this Act. (2) Any person acting in contravention of this section is guilty of an offence and shall be liable to a fine not exceeding $400 or to imprisonment for a term not exceeding one year or to both such fine and imprisonment and a person convicted of an offence under this section shall (unless the court for special reasons thinks fit to order otherwise and without prejudice to the power of the court to order a longer period of disqualification) be disqualified from holding or obtaining a driving licence for a period of 12 months from the date of conviction. (3) A disqualification under the provisions of subsection (2) shall be deemed to be a disqualification under the provisions of the Traffic Act, provided that, in respect of any disqualification under such subsection, subsection (3) of section 30 of the said Act shall be read as if the words "twelve months" were substituted for the words "six months" in the fourth line thereof.

5. Exemptions The provisions of section 4 shall not apply to any motor vehicle or type of motor vehicle declared by order of the Minister to be exempted from the provisions of this Act. 6. Requirements in respect of policies (1) In order to comply with the provisions of this Act, a policy of insurance must be a policy which(a) is issued by an approved insurance company; (b) insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle: Provided that(a) such policy shall not be required to cover(i) liability solely arising by virtue of the provisions of the Workmen's Compensation Act; (ii) save in the case of a passenger carried for hire or reward in a passenger vehicle or where persons are carried by reason of or in pursuance of a contract of
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employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting on to or alighting from the motor vehicle at the time of the occurrence of the event out of which the claims arise; or (iii) liability in respect of the death of or injury to a relative of the person using the vehicle at the time of the occurrence of the event out of which the claim arises, or to a person living with the person so using the vehicle as a member of his family; in this paragraph "relative" means a relative whose degree of relationship is not more remote than the fourth; (iv) any contractual liability; (b) such policy shall not be requited to cover liability in excess of $4,000 for any claim made by or in respect of any passenger in the motor vehicle to which the policy relates or in excess of $40,000 for all claims made by or in respect of such passengers. The amount herein specified shall be inclusive of all costs incidental to any such claim or claims. (2) Where any payment is made, whether or not with an admission of liability, by an approved insurance company under or in consequence of a policy issued under the provisions of this Act in respect of the death of or bodily injury to any persons arising out of the use of a motor vehicle and the person who has so died or received bodily injury has, to the knowledge of the approved insurance company, received treatment at a hospital, whether as an in-patient or an out-patient, in respect of the injury so arising, there shall be also paid by the approved insurance company to such hospital the expenses reasonably incurred by such hospital in giving such treatment after deducting any moneys actually received by such hospital in payment of a specific charge for such treatment:

(3) An approved insurance company issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of person specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of person. (4) A policy shall be of no effect for the purposes of this Act unless and until there is delivered by the approved insurance company to the person by whom the policy is effected a certificate, in this Act referred to as a "certificate of insurance" in the prescribed form and containing such particulars of any conditions subject to which the policy is issued and of any other matters as may be prescribed. 7. Payments and insurance in respect of emergency treatment of injuries arising from the use of motor vehicles (1) Where medical or surgical treatment or examination is immediately required as a result of bodily injury (including fatal injury) to any person caused by, or arising out of, the use of a motor vehicle and the treatment or examination so required (in this section referred to as an "emergency treatment") is effected by a registered medical practitioner, the person who was using the vehicle at the time of the event out of which the bodily injury arose shall, on a claim being made in accordance with the provisions of section 8, pay to the practitioner, or, where emergency treatment is effected by more than one practitioner, to the practitioner by whom it is first effectedK.C. COLLEGE

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(a) a fee of $1.25 in respect of each person in whose case the emergency treatment is effected by him; and (b) a sum, in respect of any distance in excess of 2 miles which he must cover in order to proceed from the place whence he is summoned to the place where the emergency treatment is carried out by him and to return to the first-mentioned place, equal to 10c for every complete mile of that distance.

(2) Where emergency treatments is first effected in a hospital the provisions of subsection (1) with respect to the payment of a fee shall, so far as applicable, have effect with the substitution of references to the hospital for references to a registered medical practitioner. (3) Liability incurred under this section by the person using a vehicle shall, where the event out of which it arose was caused by the wrongful act of another person, be treated for the purposes of any claim to recover damage by reason of that wrongful act as damage sustained by the person using the vehicle. (4) In paragraph (b) of subsection (1) of section 6 the reference to liability in respect of death or bodily injury shall be deemed to include a reference to liability to make a payment under this section in respect of emergency treatment required as a result of bodily injury, and the provisos to that paragraph shall not have effect as regards liability to make a payment under this section. 8. Provisions as to claims for, and supplementary provisions as to, payments for emergency treatment (1) A police officer shall, if so requested by a person who alleges that he is entitled to claim a payment under section 7, furnish to that person any information at the disposal of the officer as to the identification marks of any motor vehicle which that person alleges to be a vehicle out of the use of which the bodily injury arose, and as to the identity and address of the person who was using the vehicle at the time of the event out of which it arose. (2) A claim for a payment under section 7 be made at the time when the emergency treatment is effected, by oral request to the person who was using the vehicle and, if not so made, must be made by request in writing served on him within 7 days from the day on which the emergency treatment was effected: Provided that failure to make such written request within such period aforesaid shall not be a bar to a claim under this subsection where the name or address of the person using the vehicle could not be ascertained by the claimant or executive officer of the hospital within such period by the use of reasonable diligence. (3) A request in writing must be signed by the claimant, or, in the case of a hospital, by an executive officer thereof, must state the name and address of the claimant, the circumstances in which the emergency treatment was effected, and that it was first effected by the claimant, or in the case of a hospital, in the hospital.

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(4) A request in writing may be served by delivering it to the person who was using the vehicle, or by sending it in a pre-paid registered letter addressed to him at his usual or last-known address. (5) A sum payable under section 7 shall be recoverable as if it were a simple contract debt due from the person who was using the vehicle to the practitioner or the hospital. (6) A payment made under section 7 to a practitioner or hospital shall operate as a discharge, to the extent of the amount paid, of any liability of the person who was using the vehicle, or of any other person, to pay any sum in respect of the expenses or remuneration of the practitioner or hospital of or for effecting the emergency treatment. (7) A payment under section 7 shall not be deemed to be a payment by an approved insurance company for the purposes of subsection (2) of section 6. 9. Certain conditions of policies to be of no effect Any condition in a policy issued for the purposes of this Act, providing that no liability shall arise under the policy or that any liability so arising shall cease, in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy, shall be of no effect in connection with such liabilities as are required to be covered under this Act: Provided that nothing in this section shall be so construed as to render void any provision in a policy requiring the person insured to repay to the insurance company any sums which the insurance company may have become liable to pay under the policy and which have been applied to the satisfaction of the claims of the third parties. 10. Avoidance of restrictions on the scope of policies covering third party risks Where a certificate of insurance has been delivered under the provisions of subsection (4) of section 6 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the person insured thereby in respect of any of the following matters(a) the age of physical or mental condition of persons driving the motor vehicle; or (b) the condition of the motor vehicle; or (c) the number of persons that the motor vehicle carries; or (d) the weight or physical characteristics of the goods that the motor vehicle carried; or (e) the times at which or the areas within which the motor vehicle is used; or (f) the horse power or value of the motor vehicle; or (g) the carrying on the motor vehicle of any particular apparatus; or (h) the carrying on the motor vehicle of any particular means of identification other than any means
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of identification required to be carried under the provisions of the Traffic Act, shall, in respect of such liabilities as are required to be covered under this Act, be of no effect: Provided that nothing in this section shall require an approved insurance company to pay any sum in respect of the liability of any person otherwise than in or towards the discharge of that liability and any sum paid by an approved insurance company in or towards the discharge of the liability of any person which' is covered by the policy by virtue only of this section shall be recoverable by the approved insurance company from that person. 11. Duty of insurance company to satisfy judgements against persons insured in respect of third party risks (1) If, after a certificate of insurance has been delivered under the provisions of subsection (4) of section 6 to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under the provisions of paragraph (b) of subsection (1) of section 6, being a liability covered by the terms of the policy, is obtained against any person insured by the policy, then, notwithstanding that the insurance company may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurance company shall, subject to the provisions of this section, pay to the persons entitled to the benefit of such judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable by virtue of any written law in respect of interest on that sum. (2) No sum shall be payable by an approved insurance company under the provisions of subsection (1)(a) in respect of any judgment unless before, or within 7 days after the commencement of the proceedings in which the judgment was given, the insurance company has notice of the bringing of the proceedings; or (b) in respect of any judgment so long as execution thereon is stayed pending an appeal; or (c) in connection with any liability if, before the happening of the event which was the cause of the death or bodily injury giving rise to the liability, the policy was cancelled by mutual consent or by virtue of any provisions contained therein and either(i) before the happening of such event, the certificate of insurance was surrendered to the insurance company or the person to whom the certificate of insurance was delivered made a statutory declaration stating that the certificate of insurance had been lost or destroyed and so could not be surrendered; or (ii) after the happening of such event but before the expiration of 14 days from the taking effect of the cancellation of the policy, the certificate of insurance was surrendered to the insurance company or the person to whom the certificate of insurance was delivered made a statutory declaration that the certificate of insurance had been lost or destroyed and so could not be surrendered; or (iii) either before or after the happening of the event but within a period of 14 days from the taking effect of the cancellation of the policy, the insurance company had
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commenced proceedings under this Act in respect of the failure to surrender the certificate of insurance.

(3) No sum shall be payable by an approved insurance company under the provisions of this section if, in an action commenced before or within 3 months after the commencement of the proceedings in which the judgment was given, the insurance company has obtained a declaration that, apart from any provision contained in the policy, the insurance company is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in a material particular or if the company has avoided the policy on the ground that it was entitled to do so apart from any provision contained in it: Provided that an insurance company which has obtained such a declaration in an action shall not thereby be entitled to the benefit of the provisions of this subsection in respect of any judgment obtained in any proceedings commenced before the commencement of that action unless, before or within 7 days after the commencement of that action, it has given notice thereof to the person who is plaintiff in the action under the policy specifying the non-disclosure or false representation on which it proposes to rely and that it intends to seek a declaration and any person to whom notice of such action is given may, if he desires, be made a party thereto. (4) If the amount which an approved insurance company, under the provisions of this section, becomes liable to pay in respect of the liability of a person insured by a policy exceeds the amount for which it would, apart from the provisions of this section, be liable to pay under the policy in respect of that liability, it shall be entitled to recover the excess from that person. (5) In this section"liability covered by, the terms of the policy" means a liability which is covered by the policy or which would be so covered were it not that the insurance company is entitled to avoid or cancel or has avoided or cancelled the policy; and "material" means of such a nature as to influence the judgment of a prudent insurer in determining whether he will accept the risk and if so at what premium and on what conditions. 12. Rights of third parties against insurance companies (1) Where, under a policy issued for the purposes of this Act, a person, hereinafter referred to as "the insured", is insured against liabilities to third parties which he may incur, then(a) in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or (b) in the event of the insured being a company and a winding-up order being made or a resolution for the voluntary winding-up of the company being passed in respect of the company or a receiver or manager of the company's business or undertaking
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being duly appointed or in the event of possession being taken by or on behalf of the holders of any debentures secured by a floating charge, of any property comprised in or subject to the charge, if, either before or after either event, any such liability is incurred by the insured, his rights against the insurance company under the policy in respect of that liability shall, notwithstanding anything in any written law to the contrary contained, be transferred to and vest in the third party to whom the liability was so incurred. (2) Where, under the provisions of any law, an order is made for the administration in bankruptcy of the estate of a deceased debtor, then, if any debt which may be proved in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a policy issued for the purposes of this Act as being a liability to a third party, the rights of the deceased debtor against the insurance company under the policy shall, notwithstanding anything in any law to the contrary contained, be transferred to and vest in the person to whom the debt is owing. (3) Any condition in a policy issued for the purposes of this Act purporting directly or indirectly to avoid the policy or to after the rights of the parties thereunder upon the happening of any of the events specified in subsections (1) and (2) shall be of no effect. (4) Upon a transfer of rights under subsection (1) or subsection (2), the insurance company shall, subject to the provisions of section 14, be under the same liability to the third party as it would have been under to the insured, save that: (a) if the liability of the insurance company to the insured exceeds the liability of the insured to the third party, nothing in this Act shall affect the right of the insured against the insurance company in respect of such excess; and (b) if the liability of the insurance company to the insured is less than the liability of the insured to the third party, nothing in this Act shall affect the rights of the third party against the insured in respect of the balance.

(5) This section and sections 13 and 14 shall not apply(a) where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company; or (b) to any case to which the provisions of section 27 of the Workmen's Compensation Act apply. (6) For the purposes of this section and section 13 and 14, the expression "liabilities to third parties", in relation to a person insured under a policy of insurance, shall not include any liability of that person in the capacity of insurer under some other policy of insurance.

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13. Duty to give information to third parties (1) Any person against whom a claim is made in respect of any liability required to be covered by a policy under the provisions of this Act shall, on demand by or on behalf of the person making such a claim, state whether or not he was insured in respect of that liability by any policy having effect for the purposes of this Act or would have been so insured if the insurance company had not cancelled or avoided the policy and, if he were or would have been so insured, give such particulars with regard to that policy as were specified in the certificate of insurance issued to him in respect thereof. (2) In the event of any person becoming bankrupt or making a composition or arrangement with his creditors or in the event of an order being made under the provisions of any law relating to bankruptcy in respect of the estate of any person or in case of a winding-up order being made or a resolution for a voluntary winding-up being passed with respect to any company or of a receiver or manager of the company's business or undertaking being duly appointed or of possession being taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property comprised in or subject to the charge, it shall be the duty of the bankrupt debtor, personal representative of the deceased debtor and, as the case may be, of the official assignee, trustee, liquidator, receiver, manager, or person in possession of the property to give, at the request of any person claiming in respect of a liability to him, such information as may reasonably be required to ascertain whether any rights have been transferred to and vested in him under the provisions of this Act, and for the purpose of enforcing such rights, and any contract of insurance, in so far as it purports either directly or indirectly to avoid the contract or to alter the rights of the parties thereunder upon the giving of any such information or otherwise to prohibit, prevent or limit the giving of such information, shall be of no effect. (3) If the information given to any person in pursuance of the provisions of subsection (2) discloses reasonable grounds of belief that rights have or may have been transferred to him under the provisions of this Act against any particular insurance company, that insurance company shall be subject to the same duty as is imposed by the provisions of subsection (2) on the persons therein mentioned. (4) The duty imposed by this section to give information shall include a duty to allow all contracts of insurance, receipts for premiums and other relevant documents in the possession, power or control of the person on whom the duty is so imposed to be inspected and copies thereof to be taken. (5) Any person who, without reasonable excuse, the onus of proving which shall be upon him, fails to comply with the provisions of this section, or who wilfully or negligently makes any false or misleading statement in reply to a demand for information, is guilty of an offence.

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14. Certain settlements between insurer and insured to be of no effect Where a person who is insured under a policy issued for the purposes of this Act has become bankrupt or where such insured person being a company a winding-up order has been made or a resolution for a voluntary winding-up has been passed with respect to that company no agreement made between the insurance company and the insured after liability has been incurred to a third party and after the commencement of the bankruptcy or the winding-up, as the case may be, nor any waiver, assignment or other disposition made by or payment made to the insured after such commencement shall be effective to defeat or affect the rights transferred to or vested in the third party under the provisions of this Act and such rights shall be the same as if no such agreement, waiver, assignment, disposition or payment has been made. 15. Bankruptcy, etc., of insured persons not to affect certain claims (1) Where, under the provisions of this Act, a certificate of insurance has been delivered to the person by whom a policy has been effected, the happening in relation to any person insured by the policy of any of the events specified in subsection (1) or subsection (2) of section 12, notwithstanding anything in this Act contained, shall not affect any such liability of that person as is required to be covered by a policy under the provisions of this Act, but nothing in this section shall affect any rights against the insurer conferred under the provisions of sections 12, 13 and 14 on the person by whom the liability was incurred. (2) A policy issued under the provisions of this Act shall remain in force and available for third parties notwithstanding the death of any person insured under such policy as if such insured person were still alive. 16. Owner to give insurance company notice of all accidents affecting motor vehicles and of consequent actions (1) On the happening of any accident affecting a motor vehicle and resulting in the death of or personal injury to any person, it shall be the duty of the owner, forthwith after such accident, or, if the owner was not using the motor vehicle at the time of the accident, it shall be the duty of the person who was so using the vehicle, forthwith after the accident, and of the owner, forthwith after he first becomes aware of the accident, to notify the insurance company of the fact of such accident, with particulars as to the date, nature, and circumstances thereof, and thereafter to give all such other information and to take all such steps as the insurance company may reasonably require in relation thereto, whether or not any claims have actually been made against the owner or such other person on account of such accident. (2) Notice of every claim or action brought against the owner or made or brought against any other person who was using the vehicle at the time on account of any such accident shall be forthwith given to the insurance company with such particulars as such company may require, in the former case, by the owner and, in the latter case, by such other person and, where he has knowledge of clam or action, also by the owner.

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(3) Neither the owner nor any other person shall, without the written consent of the insurance company, enter upon or incur the expense o f litigation as to any matter or thing in respect of which he is indemnified by a contract of insurance under this Act, nor shall he, without such consent, make any offer, promise, payment, or settlement, or any admission of liability as to any such matter. (4) If the owner or such other person fails to give any notice or otherwise fails to comply with the requirements of this section in respect of any matter, the insurance company shall be entitled to recover from him as a debt due to it an amount, equal to the total amount including costs, paid by the insurance company in respect of any claim in relation to such matter. 17. Insurance company may settle claims An approved insurance company party to a contract of insurance under this Act may, for the purposes of such contract, undertake the settlement of any claim against the owner or any other person indemnified by a contract of insurance under this Act and may take over, during such period as it thinks proper, the conduct and control on behalf of the owner or such other person of any proceedings taken or had to enforce any such claim or for the settlement of any question arising with reference thereto, and may defend or conduct such proceedings in the name of the owner or such other person and on his behalf and shall indemnify the owner or such other person against all costs and expenses of and incidental to any such proceedings while the company retains the conduct and control thereof. The owner and such other person shall sign all such warrants and authorities as the company may require for the purpose of enabling the company to have the conduct and control of any such proceedings. 18.Proceedings may be stayed on refusal or neglect to allow medical examination In any case where(a) an action has been brought in any court by any person for the recovery of damages in respect of bodily injury caused by or arising out of the use of a motor vehicle against the owner or driver of such vehicle; and (b) the court is satisfied that there has (whether before or after action brought) been a refusal or neglect without reasonable cause to allow a medical examination of such person after a request on reasonable terms by such owner or driver that such person should be examined, for the purpose of the ascertainment of the nature and extent of the bodily injury sustained by such person, by a registered medical practitioner nominated by such owner or driver (as the case may be), the court or a judge thereof may make an order on such terms as seem proper that all further proceedings in such action shall be stayed, and the same shall be stayed accordingly. 19. Surrender of certificate of insurance on cancellation of policy Where a certificate of insurance has been delivered under the provisions of this Act to the person by whom a policy has been effected and the policy is cancelled by mutual consent or by virtue of any provision in the policy, the person to whom such
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certificate was delivered shall, within 7 days from the taking effect of the cancellation of such policy, surrender such certificate to the insurance company or, if such certificate has been lost or destroyed, make a statutory declaration to that effect and any person contravening the provisions of this section is guilty of an offence. 20. Certificates to be produced (1) Any person driving a motor vehicle on a road shall, on being so required by a police officer, give his name and address and the name and address of the owner of the motor vehicle and produce the certificate of insurance and any person contravening the provisions of this subsection shall be guilty of an offence: Provided that if such person, within 5 days after the date on which the production of the certificate was so required, produces the certificate at such police station as may have been specified by him at the time its production was required, he shall not be convicted of an offence under this subsection by reason only of failure to produce the certificate to the police officer. (2) In any case where, owing to the presence of a motor vehicle on a road, and an accident occurs involving bodily injury to any person, the driver of the motor vehicle shall produce the certificate of insurance to a police officer or to any person having reasonable grounds for requiring its production and, if any such driver, for any reason, fails so to produce the certificate of insurance, he shall, as soon as possible, and in any case within 5 days of the occurrence, report the accident and produce the certificate of insurance to the police station nearest to the scene of the accident or to the nearest administrative officer and any person contravening the provisions of this subsection shall be guilty of an offence against this Act. (3) The provisions of this section shall be in addition to and not in derogation of the provisions of subsection (5) of section 23 of the Traffic Act. (4) In this section, "to produce the certificate of insurance" means to produce for examination the relevant certificate of insurance or such other evidence as may be prescribed that the motor vehicle was not being driven in contravention of the provisions of this Act. 21. Duty of owner

An owner of a motor vehicle shall give such information as may be required by a police officer for the purpose of determining whether the motor vehicle was or was not being driven in contravention of the provisions of this Act on any occasion on which the driver was required to produce the certificate and any owner failing to do so shall be guilty of an offence against this Act.

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22. False statements and falsification

(1) If any person, for the purpose of obtaining an insurance policy or a certificate of insurance under the provisions of this Act, makes any statement either oral or written which is false or misleading or withholds any material information, such person shall, unless he proves to the satisfaction of the court that he acted without any intent to deceive, be guilty of an offence against this Act and be liable, on conviction, to a fine of $400 or to imprisonment for 2 years or to both such fire and imprisonment. (2) Any person who with intent to deceive(a) forges, alters, defaces or mutilates any certificate of insurance or any other certificate or document issued under this Act; or (b) uses or allows to be used by any other person any forged, altered, defaced or mutilated certificate of insurance or document issued under this Act; or (c) lends to or borrows from any other person a certificate of insurance or any other certificate or document issued under the provisions of this Act; or (d) makes or has in his possession any document so closely resembling any certificate or document issued under the provisions of this Act as to be calculated to deceive; or (e) issues any certificate of insurance or other certificate or document to be issued under the provisions of this Act, shall be guilty of an offence and liable, an conviction to a fine of $400 or to imprisonment far 2 years or to bath such fine and imprisonment. (3) If any police officer has reasonable cause to believe that any certificate of insurance or any other certificate or document produced to him in pursuance of the provisions of this Act by the driver or owner of a motor vehicle is a document in relation to which an offence under this section has been committed, he may seize the document and, when any such document is so seized, the driver and the owner of such motor vehicle or either of them shall, if neither of them has been charged with an offence under the provisions of this section, be summoned before a magistrate to account for the possession of or the presence an the motor vehicle of the said document and the magistrate may make such order respecting the disposal of the document and award such casts as he may deem just. 23. Reference to certificate deemed to be reference to certificates where more than one issued

In this Act, references to a certificate of insurance in any provisions relating to the surrender or lass or destruction of a certificate shall, in relation to policies under which mare than one certificate is issued, be construed as reference to all or any such certificates and shall, where any copy of a certificate has been issued, be construed as including a reference to such copy.

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24. Passengers for hire not to contract themselves out of benefits conferred by this Act In any action brought against the owner of a motor vehicle or any other person indemnified under a policy of insurance under or far the purposes of this Act in respect of an accident causing the death of or badly injury to any person being, at the time of the accident, a passenger far hire in such vehicle, it shall not be a defence that the contract of carriage had excluded or modified the liability of the owner or of any other person to pay damages in respect of accidents due to the negligence or wilful default of the owner, his servants, or agents. 25. Prohibition against soliciting for authority to make claims and commence actions, etc. (1) No person shall directly or indirectly for personal gain(a) solicit instructions or authority to act an behalf of any other person in respect of the making or commencement of any claim or action far damages far the death of or bodily injury to any person arising out of the use of a motor vehicle or in respect of the negotiation, compromise or settlement of such claim or, action; or (b) on behalf of any other person make or commence or cause to be made or commenced any claim or action far such damages aforesaid or negotiate, settle or compromise any such claim or action when made or commenced; and any person contravening the provisions of this subsection shall be guilty of an offence. (2) Paragraph (b) of subsection (1) shall not apply to any barrister and solicitor properly acting in the course of his profession. (3) Any agreement to pay to any person who contravenes any of the provisions of subsection (1) any money for work done for services rendered in respect of the matters referred to in such subsection shall be void and any money so paid shall be recoverable by action brought in any court of competent jurisdiction by the person who has paid it. 26. Applicant for vehicle licence to produce evidence of necessary insurance

Notwithstanding the provisions of any other law for the time being in force, a person applying for a vehicle licence or a renewal thereof may be required to produce evidence to the satisfaction of the licensing authority that, on the date when the licence comes into operation, there will be in force the necessary policy of insurance in relation to the use of the vehicle by the applicant or by other persons on his order or with his permission.

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27. Appeal against refusal to issue or against cancellation of policy (1) Where an approved insurance company refuses to issue to any person a policy of insurance covering such liabilities as are required to be covered by this Act, or gives notice of intention to cancel such a policy, the person applying for the policy, or the policy-holder, as the case may be, may appeal within 30 days of the date upon which he received notice of such refusal or intention to a resident magistrate and, on any such appeal, the court may dismiss the appeal or may order that such a policy be issued by the company upon payment of a premium of the amount specified in the order, or that the notice of intended cancellation of the policy be withdrawn upon payment of such additional amount, if any, as may be specified in the order by way of additional premium and the court may make such order as to costs as it thinks fit. (2) Where an order is made by a court under the provisions of subsection (1) directing an insurance company to issue a policy of insurance or to cancel a notification of cancellation, that company shall act accordingly. (3) The provisions of this section shall only have effect whilst there is in force a regulation made by the Minister under the provisions of section 29 prescribing the amount of the premium to be paid in respect of policies issued under the provisions of this Act.

28. General penalty Any person who is guilty of an offence against this Act for which no special penalty is provided shall, on conviction, be liable to a fine of $100. 29. Regulations (1) The Minister may make regulations for prescribing anything which may be prescribed under the provisions of this Act and generally for the purpose of carrying out the provisions of this Act and, in particular but without prejudice to the generality of the foregoing provisions, may make regulations(a) prescribing the forms to be used for the purposes of this Act; (b) as to applications for and the issue of certificates of insurance and any other documents which may be prescribed and as to the keeping of records of documents and the furnishing of particulars thereof and the giving of information with respect thereto; (c) as to the custody, production, cancellation and surrender of any certificates of insurance or other documents; (d) as to the issue of copies of any certificates of insurance or documents which are lost, mutilated or destroyed; (e) for providing that any of the provisions of this Act shall, in relation to motor vehicles brought into Fiji by persons making only a temporary stay in Fiji, have effect subject to such modifications and adaptations as may be prescribed;
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(f) prescribing, after consultation with the South Sea Islands Fire and Tariff Association, the amount of the premiums to be paid in respect of policies of insurance covering such liabilities as are required to be covered by the provisions of this Act; (g) prescribing fees to be charged in respect of anything to be done under the provisions of this Act; (h) prescribing penalties for the breach of any regulations made hereunder not exceeding a fine of $400 or imprisonment for 2 years or both such fine and imprisonment. (2) Regulations prescribing premiums payable for the purpose of this Act may differentiate between different classes of motor vehicles and may differentiate between motor vehicles having regard to the purposes for which they are used or intended to be used. 30. Application of section 4 to use of Government motor vehicles The provisions of section 4 shall not apply to the use by any person of a Government motor vehicle.

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MOTOR VEHICLES (THIRD PARTY INSURANCE)


Section 29- Motor Vehicles (third party insurance) regulation Table provision Regulation

1. Short title

2. Interpretation

3. Form of certificate of insurance

4. Authentication and issue of certificates

5. Evidence alternative to certificate

6. Records

7. When company to report certificate ceasing to have effect

8. Renewal of certificates Schedule-Certificate of Insurance Regulations 1.Short title These Regulations may be cited as the Motor Vehicles (Third Party Insurance) Regulations. 2. Interpretation In these Regulations, unless the context otherwise requires-"company" means an approved insurance company. "policy" means a policy of insurance complying with the provisions of the Act. 3. Form of certificate of insurance A company shall issue to every holder of a policy issued by the company a certificate of insurance in the form set out in the Schedule in respect of such vehicle.
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4. Authentication and issue of certificates (1) Every certificate of insurance shall be duly authenticated by or on behalf of the company by which it is issued. (2) The certificate aforesaid shall be issued on the date on which the policy is issued or renewed.

5. Evidence alternative to certificate The following evidence that a motor vehicle is not being driven in contravention of section 4 of the Act may be produced by the driver of such motor vehicle on the request of a police officer in pursuance of section 20 of the Act as an alternative to the production of -a certificate of insuranceA certificate signed by the Minister or by some person authorised by the Minister in that behalf stating that the motor vehicle is a motor vehicle or one of a class of motor vehicles declared by order of the Minister under section 5 of the Act to be exempted from the. provisions of the Act. 6. Records (1) Every company by which a policy is issued shall keep a record of the following particulars relative thereto and of any certificate issued in connection therewith(a) the full name and address of the person to whom the policy is issued; (b) the registered number of the vehicle to which the policy relates; (c) the date on which the policy comes into force and the date on which it expires; (d) the conditions subject to which the persons or classes of persons specified in the policy are to be indemnified. 7. When company to report certificate ceasing to have effect Where, to the knowledge of a company, a policy issued by it ceases to be effective without the consent of the person to whom it was issued otherwise than by effluxion of time or by reason of his death, the company shall forthwith notify the Commissioner of Police of the date on which the policy ceased to be effective.

8.Renewal of certificate Where a company by which a certificate of insurance has been issued is satisfied that the certificate has been defaced or has been lost or destroyed, it shall, if requested so to do by the person to whom the certificate was issued, and upon payment by him of a fee of 25 cents issue to him a fresh certificate.
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IRDA HIKE THE THIRD PARTY MOTOR INSURANCE


Giving in to the long pending demand of the general insurance companies, the Insurance Regulatory and Development Authority (IRDA) of India has hiked the third party motor insurance premium by 10-65% across private and commercial vehicles with effect from April 25, 2011. The insurance regulator has also agreed to the industry demand of annual review of third party premium rates. The premiums for private cars and two-wheelers have been increased by 10% while for commercial vehicle the hike is 65%. Amarnath Ananthanarayanan, chief executive officer, Bharti AXA General Insurance, had said the third party premium in the commercial sector should be increased at least by 80%. The third party insurance premium rates have been increased after a gap of 5 years. In a circular issued on April 15, 2011, the insurance regulator observed that "long intervals between rate revisions cast an avoidable strain on policyholders as well as on the insurance companies. Premiums need to be reviewed regularly depending upon the average claims which have been awarded by the various courts, frequency of claims for each class of vehicle and inflation amongst other factors." A Bajaj Allianz General Insurance spokesperson said that the fact that Irda has agreed to review the third party rates on yearly basis comes as a big relief to the industry. There are two kinds of motor insurance cover - cover against damage to one's own vehicle (own damage insurance) and third party insurance which covers the insured person if he is sued or held legally liable for injuries or damage done to a third party. Third party motor insurance is mandatory by law and the premium rates are still under government control. Get ready to shell out more premium for vehicle insurance. The Insurance Regulatory and Development Authority (IRDA) has proposed these hikes in an exposure draft on review of motor insurance premium rates for third party liability cover. The annual premium is set to go up as the rates for third party liability cover are to be hiked. Third party liability cover Motor third-party insurance or third-party liability cover, which is sometimes also referred to as the 'act only' cover, is a statutory requirement under the Motor Vehicles Act. It is referred to as a 'third-party' cover since the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the insured and the insurance company. The policy does not provide any benefit to the insured; however it covers the insured's legal liability for death/disability of third party loss or damage to third party property.

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How much it may increase The proposed hikes range from 10 per cent to 80 per cent in the case of private cars and two wheelers depending on their capacities. For instance, for private cars not exceeding 1,000 cc, the existing premium of Rs 670 is proposed to be raised to Rs 740. For other high-capacity cars and two-wheelers, the rate is set to be increased by over 10 per cent. Private Cars Not exceeding 1000 cc Exceeding 1000 cc but not exceeding 1500 cc Exceeding 1500 cc Two Wheelers Not Exceeding 75 cc Exceeding 75 cc but not exceeding 150 cc Exceeding 150 cc but not exceeding 350 cc Exceeding 350 cc Existing Premium (23.01.2007 Noun.) 670 800 2500 Existing Premium (23.01.2007 Noun.) 300 300 300 620 RevisedPremium 740 880 2750 RevisedPremium 330 330 330 660

Why is it increasing Statistics compiled by the Insurance Information Bureau show that the third party insurance portfolio for commercial vehicles is consistently making loss. The Authority is of the view that the review of third party premium deserves due importance and urgency, Mr M. Ramprasad, Member, Non-Life, IRDA, said in the draft. The Third Party Motor Insurance premium rates are regulated by the Insurance Regulatory and Development Authority (IRDA). These rates were last fixed in the year 2007. IRDA has placed an exposure draft on its website and has called for comments in regard to the revision of premium rates. If you want to read the complete exposure draft, please download from attachment.

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Find cheap third party insurance quotes There are also several steps you can take to cut the cost of third party insurance:

Shop around: one in four drivers automatically renews their policy with their existing insurer. But loyalty doesn't always pay. You can compare quotes for all types of car insurance with MoneySupermarket's free independent comparison service. It can help you find the best policy at the most competitive price.

Check you car's rating: Insurers put cars into one of 50 groups according to a number of factors including engine size. Cars in the higher groups are costlier to insure than vehicles in the lower groups. You can find out more about this on our car insurance groups page.

Park you car with care: If possible, keep you car in a locked garage overnight. If you don't have a garage, it will be cheaper to insure your vehicle if you can park it off the road, perhaps in a driveway.

Keep your car secure: Fit your car with an approved alarm or immobiliser and you could earn a discount on your premium.

Don't claim on your policy: Insurers reward careful drivers with a no claims discount (NCD) - and an NCD can knock as much as 75% off your premium after five years.

Increase your excess: Motor policies come with a compulsory minimum excess, which is the amount the policyholder has to contribute to any claim. If you negotiate a higher voluntary excess, you should also be able to negotiate a lower premium.

Drive fewer miles: the less you drive your car, the less likely you are to make a claim - and the less you should pay for your insurance. So talk to your insurer about a lower mileage limit if you don't use your car very often, or only for short journeys

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STEP- DOCUMENTS TO BE CHECKED/VERIFIED FOR ESTABLISHING LIABILITY


A) Underwriting documents:1. Policy copy with endorsements, if any, covering the vehicle at the material time of accident, as mentioned in the claim application. 2. Compliance of Section 64VB . B) Vehicular Documents: Registration particulars/ RC Book Route permit ( if the vehicle is commercial ) Driving Licence ( whether valid and effective) C) Documents relating to police case FIR/Panchnama Emphasis should not be given on DDR ( daily diary report) , which is an agreement entered into by the driver/owner and the injured persons/legal heirs of the deceased to avoid a criminal case, since normally the sections of Indian Penal Codethat arise in a case of RTA are 279, 337,338 & 304A which fall under the category of cognizable offence and against which lodging of FIR is a must. Police Report U/S. 158/6 of the MV Act, amended, w.e.f. 14-11-94. Final Police Report / Chargesheet U/S. 173 Cr.p.c. D) Investigation Report (mandatory) Investigator to obtain the details of the following: Identification of claimant (Voter I.D. Card/ photograph duly certified by the competent authority viz., Panchayat / Councillor/Local MLA/MP/Gazetted Officer) Income certificate of the victim verified from the employer, or if self-employed, verification through other documents. Age proof of the injured (claimant/deceased), viz, school leaving certificate/hospital record/Voter I.D.Card Details of dependents in case of death of the victim, like age, income, status and relation of the dependent/claimant with the victim. The involvement of the vehicle(s) in the accident and the involvement of the claimant(injured/deceased) in the said accident, to be ascertained /authenticated. Drivers statement and owners statement as to the cause of accident and the nature of loss sustained by the victim/claimant in detail. All the injury reports of the victims, verified from the respective hospitals/nursing homes on authenticity.

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E) The Panel Doctor has to verify the following aspects. The alleged injury as narrated under the claim petition, the medical papers ( in original) submitted before him, and his clinical examination, all tally with respect to the nature of the injury. The injury(ies) is/are major/minor. Whether claimant has sustained permanent total/partial disablement. The degree of disablement. Whether the medical bills submitted by the claimant have relevance with the injury treatment. Present status of the injured person. F) Documents relating to death Post-mortem report/death certificate After verifying all the documents as mentioned above, if it is found that our liability is otherwise not in dispute, the cases may be segregated in order to explore the possibility of out-of-Court settlement. Necessary assessment of compensation should be made by keeping in mind the provisions of MV Act, as well as the guideline to this effect, and the assessed amount be offered to the claimant by Registered Post for his consent for compromise, under intimation to the Tribunal If we do not receive any response from the claimant within the specified time of 30 days, then we can approach the Tribunal with the offer, for necessary recording by the Court that the claimant is not entitled to any interest on the offered amount, since he failed to accept the offer of the Insurance Companies. If the claimant is ready to accept the offer of compromise on the assessed amount, he/she may be requested to give his/her consent for such compromise in writing and the matter may be placed before the foras as mentioned above, for effecting necessary compromise, or the same may be placed before the Tribunal for a consent decree.

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TYPES OF CAR INSURANCE POLICIES


Third-Party Liability There are two types of third-party liability policies: bodily injury and property damage. Bodily injury liability pays other people for damages the policy owner has done to them, such as medical expenses, lost wages, and pain and suffering; property damage pays other people for damages done to their property. If someone files suit against the policy owner as a result of a car accident, these policies will provide monetary protection (up to the limit of the policy). Nearly all states require a set minimum amount of third-party liability coverage. Generally, states that don't require these policies are "no-fault" states, which have enacted laws that eliminate most claims of "pain and suffering" and many other standard small claims. Regardless of these "no-fault" laws, experts agree that the ideal policy should have more third-party liability coverage than is required by law. Juries sometimes award very large damages to plaintiffs with only minor injuries; the minimum required policy is highly unlikely to significantly defray liability costs in the event of a major lawsuit. And "no-fault" laws generally only protect drivers from petty claims - big injury suits are still allowable. Bodily Injury - The common notation for bodily injury policies looks like 50/100 or 100/300, where the first number is the dollar amount (in thousands) of total coverage in the event that one person is injured or killed, and the second number is the total dollar amount (in thousands) for an entire accident. Again, this coverage will also handle legal expenses involved in settling suits brought against you. Experts suggest that a policy have at least 100/300 insurance ($100,000 coverage for one person's injuries, $300,000 per accident). Property Damage - Following the same notation as above, property damage is the third number listed on the policy, e.g., if the policy were 100/300/25, it would offer $25,000 worth of coverage to repair or replace others' property (including cars). Typically, states require property damage insurance of around $15,000, but because the cost of the average new car is well above $20,000, coverage of at least $25,000 First-Party Expense- First-party coverage comes in many forms, some of which are essential, and some of which are usually not worth the premiums. Firstparty coverage is used to repair damages to the policy-owner and his or her passengers in the event that:

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The policy owner was not at fault in the accident


No one was at fault in the accident The driver at fault can not be found (e.g., a hit-and-run) The driver at fault does not have adequate means to repair the policy owner's damages

The most important types of first-party coverage are collision, comprehensive, uninsured/under-insured motorist, and MedPay/Personal Injury Protection (PIP) insurance. Collision / Comprehensive - Collision coverage guarantees the policy owner's car will be repaired or replaced in the event of an accident, no matter who was at fault. Collision coverage premiums are based on a deductible, usually $250 or $500. Collision coverage is often required when purchasing a new car on a loan, to protect the lender. Comprehensive coverage will pay to repair or replace the policy owner's vehicle and personal property inside of it if it was damaged or lost due to other agents, e.g., fire, theft, flood, vandalism, etc. Comprehensive coverage is also based on a deductible, generally of the same amounts as Collision, and is also often required when purchasing a new car using a loan. Both Collision and Comprehensive coverage can be RCV (replacement cost value) or ACV (actual cash value). RCV will pay what it would cost to replace the car with a new one, ACV will pay what it would cost to repair the car to its prior condition (or replace it with one of a similar condition). Thus, RCV has a higher maximum benefit, but also a higher premium. Uninsured / Under-insured - Uninsured / Under-insured Motorist coverage (also called UM/UIM coverage) pays the policy owner and his or her passengers for pain and suffering, lost wages, etc. in the event that the driver at fault can not be found (as in a hit-and-run), has no insurance, or has too little insurance to cover the damages. Experts say that UM/UIM coverage is at least as important as bodily injury coverage: it is unlikely that the driver at fault will have enough coverage to pay the damages resulting from a serious accident. Further, while other policies can combine to offer the same kind of coverage as UM/UIM, there are several advantages to this type of coverage: It is more broad that most health or disability plans - it can cover loss of limb, pain and suffering, funeral expenses, etc.

It has much higher coverage than other types of medical-expense car insurance, such as MedPay and PIP (described below). It is relatively inexpensive.

UM/UIM coverage is described by the same notation as bodily injury coverage (e.g., 100/300). Generally, insurance companies will only the allow purchase of UM/UIM coverage up to your current bodily injury limit; experts suggest you purchase the maximum UM/UIM.
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Medical Payments - MedPay covers medical and funeral expenses to the policy-owner and his or her passengers, regardless of who is at fault in the accident. Personal Injury Protection (PIP) extends basic medical coverage to include lost wages and other damages, and also pays regardless of fault. PIP is often mandated by states that have "no-fault" laws. The less then that allowed by UM/ UIM

First-Party Expense First-party coverage comes in many forms, some of which are essential, and some of which are usually not worth the premiums. First-party coverage is used to repair damages to the policy-owner and his or her passengers in the event that: The policy owner was not at fault in the accident No one was at fault in the accident The driver at fault can not be found (e.g., a hit-and-run) The driver at fault does not have adequate means to repair the policy owner's damages The most important types of first-party coverage are collision, comprehensive, uninsured/under-insured motorist, and MedPay/Personal Injury Protection (PIP) insurance. Collision / Comprehensive - Collision coverage guarantees the policy owner's car will be repaired or replaced in the event of an accident, no matter who was at fault. Collision coverage premiums are based on a deductible, usually $250 or $500. Collision coverage is often required when purchasing a new car on a loan, to protect the lender. Comprehensive coverage will pay to repair or replace the policy owner's vehicle and personal property inside of it if it was damaged or lost due to other agents, e.g., fire, theft, flood, vandalism, etc. Comprehensive coverage is also based on a deductible, generally of the same amounts as Collision, and is also often required when purchasing a new car using a loan. Both Collision and Comprehensive coverage can be RCV (replacement cost value) or ACV (actual cash value). RCV will pay what it would cost to replace the car with a new one, ACV will pay what it would cost to repair the car to its prior condition (or replace it with one of a similar condition). Thus, RCV has a higher maximum benefit, but also a higher premium. Uninsured / Under-insured - Uninsured / Under-insured Motorist coverage (also called UM/UIM coverage) pays the policy owner and his or her passengers for pain and suffering, lost wages, etc. in the event that the driver at fault can not be found (as in a hit-and-run), has no insurance, or has too little insurance to cover the damages. Experts say that UM/UIM coverage is at least as important as bodily injury coverage: it is unlikely that the driver at fault will have enough coverage to pay the damages resulting from a serious accident. Further, while other policies can combine to offer the same kind of coverage as UM/UIM, there are several advantages to this type of coverage:
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It is more broad that most health or disability plans - it can cover loss of limb, pain and suffering, funeral expenses, etc.

It has much higher coverage than other types of medical-expense car insurance, such as MedPay and PIP (described below). It is relatively inexpensive. UM/UIM coverage is described by the same notation as bodily injury coverage (e.g., 100/300). Generally, insurance companies will only the allow purchase of UM/UIM coverage up to your current bodily injury limit; experts suggest you purchase the maximum UM/UIM. Medical Payments - MedPay covers medical and funeral expenses to the policyowner and his or her passengers, regardless of who is at fault in the accident. Personal Injury Protection (PIP) extends basic medical coverage to include lost wages and other damages, and also pays regardless of fault. PIP is often mandated by states that have "no-fault" laws. The less than that allowed by UM/UIM. Non -Policy-Owners Most car insurance policies go with the car; that is, they will pay out appropriately regardless of who is driving the car at the time of the accident (as long as the policy owner allowed the driver to use the car). However, if a non-policy-owner is going to use the car on a frequent basis, be sure to include him or her on the insurance policy. Furthermore, if someone drives the car much more often than the policy owner, he or she should consider becoming the primary driver of the car. The primary driver in large part determines the insurance premiums, and providing false information can give the insurance company cause to void the policy. Stolen Cars The owner of a car is not responsible for third-party damages resulting from or during the theft of his/her car. If the car owner has collision and comprehensive coverage, they will pay out to repair or replace the car (either for its theft or for damage to the car as a result of the theft). Rental Cars The term "Rental Car Coverage" is used to refer to two different things: coverage offered by rental car agencies for cars rented from them, and an add-on to insurance policies that allows free rentals while the car is in repair. Coverage from a rental car agency is rarely necessary, assuming the renter already has third-party liability, collision, and comprehensive coverage; those policies should extend protection to the rental car (but check the policy). Rental car companies often offer other types of coverage; experts usually suggest avoiding most of these. The rental car add-on to insurance policies is very inexpensive, but may be an unnecessary expense if the policy owner has another car to rely on during an emergency.
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MODE OF SETTLEMENT
Once the liability is established an all out effort must be made to settle the cases at the earliest possible. Compromise Settlements through various fora: Documentation Motor TP loss is now the most potent factor for our dismal show on the profitability front and in this context the Alternate Redressal Forums like Lok Adalat, Conciliatory Committee , Jald Rahat Yojana, DICC & RICC are like oasis in the desert. As an insurer there are four basic objectives why we should lean towards Lok Adalat and other conciliatory forums 1. To drastically shorten the process of litigation in order to save legal costs & interest liability and strike a reasonable deal on the question of quantum with the claimants, to lighten the burden of unexpected high awards. 2. To reduce accumulated cases, which in effect means reduced provisions, ultimately reflecting favourably on our bottom-line. 3. From the social viewpoint, to mitigate the hardship of the Claimants lost in the labyrinth of legal process, by offering a reasonable sum which suits both the parties. 4. To reduce work load in the office. Lok Adalat: Lok Adalat is an alternative Forum where cases can be compromised by both the parties with the intervention of the Member Judges. Every Lok Adalat organised for an area shall consist of: (a) servicing or retired judicial official, (b) a member of the legal profession (c) a social worker or a person engaged in paralegal activities in the area. The Lok Adalat shall have jurisdiction to determine and arrive at a compromise or settlement between the parties to a dispute, in respect of any case pending before, or any matter falling within the jurisdiction of and not brought before, any Court for which the Lok Adalat is organised. However, Award of the Lok Adalat shall be deemed to be a decree of a Civil Court and shall be final and binding on all the parties to the dispute and no appeal shall lie to any Court against the Award. By amendment No.37 of 2002, called Legal Services Authorities (Amendment) Act, which came into force with effect from 11 -602, permanent Lok Adalat would be established to cover public utility service and insurance service in terms of the definition of Public Utility Services U/S. 22A of the Amended Act.

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Conciliatory Committee U/S. 152 of the Motor Vehicle Act, 1988, as amended in 1994, in order to dispose of Motor TP Claims and Claims under Jald Rahat Yojana through compromise, the concept of Conciliatory Committee, as an alternative Forum, has been introduced. The Conciliatory Committee should consist of Retd. High Court Judge or Retd. District Judge, Retd. Senior Insurance Executives and an Orthopedic Surgeon . The Conciliatory Committee would process applications for compensation as per legal advices of the Panel Advocate and in terms of provision of the Structured Compensation U/S.163A of MV Act 1988, as amended in 1994., and would recommend to the Competent Authority for approval of the claim. If necessary approval is obtained from the Competent Authority, a joint compromise petition, duly signed by both the parties and their advocates, is required to be filed before the respective MACT where the case is pending, in order to get the consent award. Jald Rahat Yojana Keeping in view provisions U/S. 152 of the MV Act, 1988, as amended in 1994, for settlement of TP claims between the insurer and the insured persons, the JRY scheme had been introduced by the General Insurance Corporation of India for settlement of non-fatal claims involving non-minor persons, at the pre-litigation stage. The Conciliatory Committee would process applications for claims under JRY as per legal advice of the Panel Advocates and on the basis of opinion of an Orthopedic Surgeon, who would also be a member of the Committee, in regard to the percentage of disability sustained by the victim / applicant, and would recommend to the Competent Authority for approval of the claim. DICC AND RICC For hastening the process of litigation and speedy disposal of cases Divisional In-house ConciliatoryCommittee (DICC) / Regional In-house Committee (RICC) had been set up in 1997 in order to explore the possibility of settlement of Motor TP claims exclusively. The DICC shall consist of Officer-in Charge of the Division, Officer-in-Charge of Motor claims and one other officer from Non-Motor stream. The present revised limit of Financial Authority of DICC for Motor TP claims is Rs. 10,00,000/-. The RICC Regional In- house Concilatory Committee shall consist of Officerin-Charge of the Region, Officer-in-Charge of Motor portfolio and one other officer not below the rank of Deputy Manager. The present revised limit of Financial Authority of RICC for Motor TP claims is Rs.18,00,000/-. If cases are settled through DICC/RICC, a joint compromise petition, duly signed by both the parties and their advocates, is required

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Computation Guidelines (Basic)


1. Simple (Non-grievous) Injury: (a) Principal Liability: Upto Rs. 10,000/-, depending on gravity/nature of injury. (b) Additional: Rs. 1,000/- towards Pain & Suffering 2. Grievous Injury 1. Permanent Total Disablement (resulting in loss of employment): (a) Principal Liability: Annual Income of injured/victim x Age-wise Appropriate Multiplier 2. as per 2nd Schedule u/s 163A of the MV Act. The annual income to be taken for this 3. purpose would vary as given hereunder, subject to a ceiling of actual income claimed. (a) Additional: (i) Pain & Suffering: In conformity with Awards on cases of similar nature of disablement, as per Tribunal-wise experience of the dealing office, keeping in mind the Supreme Court Ruling in R.D. Hattangadi Vs. Pest Control (India) Pvt. Ltd, reported in ACJ1993, 4. Permanent Partial Disablement, with percentage of disability specified by a doctor, as per document submitted from the claimants side: (a) Principal Liability: Annual Income of injured/victim x Age-wise Appropriate Multiplier as per 2nd Schedule u/s 163A of the MV Act x Specified Disability %. The annual income to be taken for this purpose would vary as given hereunder, subject to a ceiling of actual income claimed. (b) Additional: Pain & Suffering, as per para 021 (b) (i) above. 5. Where Injured/Victim Had No Income Prior to Accident : Notional Income of Rs. 6. 15,000/- p.a., as per Supreme Court Ruling in Maju Devi & Another Vs. Musafir Paswan & Another, reported in 2005 ACJ, p. 99, irrespective of age of victim 022B. Where Injured/Victim Had No Stable Income prior to accident 7. Skilled labourer, carpenter, mason, rickshaw-puller, and similar occupations, as also professionals or businessmen who are not IT Assesses: Rs. 24,000/p.a. 8. Driver/khalasi/conductor of auto/taxi/bus/truck etc.: Rs.30,000/9. Professionals or Businessmen who are IT assesses: Average Annual Income of past 3 financial years preceding the date of accident, as per IT Returns submitted and proved However, Unstable income to be considered should be based on State-wise Minimum Wages Acts : Ros may, therefore, circulate revised limits consequent with the State Acts, where necessary.

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10. Where the Injured/Victim had Stable Income arising from Regular Employment prior to accident: Actual Income. However, the formula as per 021 (a) above shall be applicable only if the employee is unable to continue in service due to permanent total disablement. Fatal cases: (a) Principal Liability: Annual Income, determined according to income and occupational status as per Para022A&B above x dependency, as given hereunder x Age-wise Multiplier as per 2nd Schedule u/s 163A of the MV Act (b) Additional: As given hereunder A) Where the deceased is Married: Dependency = 2/3 rd. Additional: 1. Funeral expenses: Actual, subject to limit of Rs. 2,000/2. Loss of Consortium: Rs. 5,000/3. Loss of Estate: Rs. 2,500/B) Where the deceased is Not Married: Dependency = . However, multiplier to be chosen according to age of claimant, and not the victim, in terms of Supreme Court Ruling in UP SRTC Vs. Trilok Chandra & Other, reported in ACJ, 1996, p. 831 Additional: 1. Funeral expenses: Actual, subject to limit of Rs. 2,000/2. Loss of Estate: Rs. 2,500/This Guideline deals with cases where our liability is established, and supercedes all previous Guidelines, with immediate effect. However, this guideline will also be applicable in respect of suspected fraudulent claims. Provisioning on the basis of 'Summons' itself, without accompanying Claim Petition to show details: Mention of multiple petitioners in a 'summon' on a MACT case can safely imply claim by multiple heirs of a deceased, while a single claimant implies the injured himself. Hence, o/s provision of Rs. 50,000/- and Rs. 25.000/- may be made immediately, being the NFL compensation in death and injury cases respectively, to be updated as the case proceeds. Provisioning in Appeal Cases: Awarded amount, including accrued interest + legal and investigating fees, through fresh Circular, only on Appeals by us, but not by claimants. Kindly circulate the guideline to all offices under your control and ensure strict compliance thereof with immediate effect.

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STUDY OF POSITION OF GRATUITOUS PASSENGERS PRIOR TO 1994 AMENDMENT TO THE 1988 ACT
New India Assurance Company v. Shri Satpal Singh and Ors , AIR 2000 SC235 Facts: A 10 year old girl met with a fatal accident in 1990 while traveling in a truck. Her father brother and sister made a joint claim under the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal awarded compensation of Rs. 25,000. This was challenged by both parties and the Division Bench of the High Court doubled the compensation. Issue: Whether the insurer had a liability towards a gratuitous passenger such as the girl under the 1988 Act prior to its amendment in 1994? Discussion upon Insurers Liability towards Gratuitous Passengers: A two judge bench of the Supreme Court in this case first distinguished the case of Mallava v. Oriental Insurance Co. Ltd, which it stated had arisen under the Act of 1939 which had a substantially different provision which dealt with the limits of liability of the insurer. As per the proviso to Section 95 of the 1939 Act when read with its Clause (ii), it was held to be clear that the policy of insurance shall not be required to cover liability in respect of the death of or bodily injury to persons who were gratuitous passengers of that vehicle under the 1939 Act. However, as this case had arisen under the 1988 Act, the Court focused on Section 147(1) of the 1988 Act, which corresponded to Section 95 of the 1939 Act. The Court observed that Section 95 had been substantially altered and recast as Section 147 of the 1988 Act. The substantial alteration was by way of complete omission in the 1988 Act of the clause corresponding to Clause (ii) of the proviso to Section 95 of the 1939 Act. The Court then went on to state that, there was no upper limitation for the insurer regarding the amount of compensation awarded in respect of death or bodily injury of a victim of the accident under Sub-section (2) of Section 147 of the 1988 Act. It was therefore apparent to the Court that the limit contained in the old Act had been removed and that the insurance policy would insure the liability incurred and cover injury to any person including owner of the goods or his authorised representative carried in the vehicle.

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Therefore, according to the Court in the Satpal Case, the result of the substantial alteration in the wording of the appropriate provisions and the omission of the operative restrictive clause was that under the 1988 Act an insurance policy covering third party risk was not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. New India Assurance Co. v. Asha Rani, AIR 2003 SC 607 Facts: This case was a reference from a two-judge bench[10] which was dealing with a batch of appeals. The first bunch of appeals, which related to cases under the 1939 Act and the third bunch of appeals which dealt with cases post the 1994 amendment were disposed off by the two judge bench. However, the second category of cases, which were to be decided as per the position prior to the 1994 amendment were referred to the present three-judge bench. Issue: Whether the insurer is liable to pay compensation to the dependants of the deceased passenger, while the deceased passenger was travelling in a goods vehicle and that vehicle met with an accident, on account of which the passenger died or suffered bodily injury under the Motor Vehicles Act prior to its amendment in 1994? Therefore, the case discussed immediately before, i.e., Satpals case would be reconsidered. Discussion upon Insurers Liability towards Gratuitous Passengers: The Court in this case began with the exposure of the erroneous assumption made by the Court in Satpals case- the Court in Satpal assumed that the provisions of Section 95(1) of Motor Vehicles Act 1939 were identical to Section 147(1) of the Motor Vehicles Act 1988, as it stood prior to its amendment. However, on closer scrutiny, the Court in the present case came to the conclusion that it was not necessary for the insurer to insure against the owner of the goods of his authorised representative being carried in a goods vehicle. The Court based this conclusion on the intention of the legislature evinced from Section 46 of the Amendment Act, 1994 by which the expression injury to any person in the original Act stood substituted by the expression injury to any person including owner of the goods or his authorised representative carried in the vehicle. The Court also refused to see the amendment as being clarificatory of the pre-existing position of law. For this purpose, it cited the objects and reasons for the insertion of Section 46 and in this regard, the Court observed:

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It is no doubt true that sometimes the legislature amends the law by way of amplification and clarification of an inherent position which is there in the statute, but a plain meaning being given to the words used in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression including owner of the goods or his authorised representative carried in the vehicle which was added to the pre-existed expression injury to any person is either clarificatory or amp lification of the pre-existing statute.

As a result, the Court held Satpals case to be wrongly decided and reversed the position exempting the insurers from liability for gratuitous passengers prior to the amendment of 1994.

In a separate but concurring judgment, Sinha, J., first concentrates on the change in the terminology used by the Legislature. The Honble Justice deduces from the change in definition from goods vehicle which could carry passengers in the 1939 Act to goods carriage which was constructed or adapted for use solely for the carriage of goods in the 1988 Act that carrying of passengers was not contemplated under the 1988 Act. Further, he reasons that if the owner of a passenger vehicle was required to pay a premium for covering the risks of the passengers. then the ratio of the Satpal case, once taken to its logical conclusion would be that the owner of a goods carriage would be deemed to have been covered under the insurance policy even when no premium has been paid. The last reason that Sinha, J. gives for his concurring judgment is that the defence of the insurer under Section 149(2) of the 1988 Act- that the vehicle was being used for a purpose other than that allowed by the permit under which the vehicle was being used- would be obliterated in case the ratio in Satpal Singh was considered good law. For the above reasons, the decision of the Supreme Court in Asha Rani held the Satpal case to be wrongly decided and overruled the same, tilting the position of law in favour of the insurer

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Oriental Insurance Company Ltd. v. Devireddy Konda Reddy, AIR 2003 SC 1009

Facts: Certain persons were travelling in goods vehicles which were subject-matter of insurance with the appellant insurer. The vehicles met with accidents which resulted in the deaths of several persons who were either unauthorised or gratuitous passengers in the said vehicles. Their legal representatives lodged claims under Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal, the Single Judge of the High and the Division Bench of the High Court all relied on Satpal Singhs case, which has been discussed above, which held the insurer liable to indemnify the legal representatives of the deceased. Issue: Whether the insurance Company was liable to indemnify the gratuitous passenger? Discussion upon Insurers Liability towards Gratuitous Passengers : Once again, the Court relied upon the difference in terminology between goods vehicle and goods carriage to reach the conclusion that the legislative intent was to prohibit goods vehicle from carrying passengers under the provisions of the 1988 Act prior to amendment. As may be noted, this is similar to the reasoning put forward by Sinha, J. in his separate but concurring judgment in the Asha Rani case. Therefore, as the provisions of the 1988 Act made no reference to passengers in a goods carriage nor did they place any statutory liability on the owner of the vehicle to get the passenger traveling in the goods carriage insured, the insurer would have no liability for the same. This case relied on the decision in Asha Rani, which had overruled Satpals case in overturning the findings of the Tribunal and the High Court. The above two cases were relied upon by the Supreme Court in National Insurance Co. Ltd. v. Ajit Kumar, in reaching the same conclusion.

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APPEALS
Since the time for preferring appeal is 90 days from the date of the award as per Sec. 173 of the MV Act, all the relevant papers including the certified copy of the award along with a format, Annexed, duly filled in should be sent to the RO well before time so as to enable them to take a decision on the matter. It is pertinent to mention that there is no provision of second appeal in the amended CP Code. The relevant Sec. 100A of the said code reads as follows: Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force, where any appeal from an original or appellate decree or order is heard and decided by a single judge or a High court, no further appeal shall like from the judgment and decree of such single Judge. It is to be ensured that any order of the Tribunal awarding payment of a certain amount must be satisfied within the stipulated period, as mentioned in the order of the Tribunal in order to avoid any payment of interest, if the said order does not merit appeal. While preferring appeal the RO shall make Statutory Deposit U/S.173(1) of MV Act or any Deposit in compliance of interim offer, while obtaining stay. On Disposal of the Appeal, if the same is in favour of the company, the certified copy of the High Court order should be sent to the DO and application should be filed before High Court for refund of Deposit made as mentioned above. However, if the appeal is decided against the company, the certified copy of the High Court order and the Memo of Appeal should be sent along with the case file to Head Office with Advocates opinion and recommen dation to prefer Special Leave Petition before Supreme Court within limitation period. Award Register to be maintained.

Following documents are must in each of the TP claims lodged by the claimants : For Injury Cases 1. Claim Petition U/S 140 of M.V. Act 2. Claim Petition U/S 166 of M.V. Act 3. All police papers as follows : a) FIR copy First Information Report to the Police b) Comp AA Form having the details of accidental vehicles c) Vehicular inspection report d) Spot Panchanama e) Injury Certificate MLC case report having details of all the injuries sustained in the accident/ A.R. copy or wound certificate f) Hospitalization papers viz. Discharge Card, Hospital Bills, Chemist Bills with supporting prescriptions, Lab investigations done, if any with Bills and report, Doctors remark on disability ( permanent, partial or total), if any and the likely duration of it.
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4.

5. 6. 7. 8. 9.

g) Bills supporting any other expenses claimed. h) Disability Certificate having the percentage loss capacity from the appropriate medical board. i) Tapas Tipans (Statement of Witnesses) j) Charge Sheet copy. k) Any other related police papers. Vehicular Documents a) R.C. book b) T.C. Book c) Copy of the Policy d) MDL of the driver Age of the injured Income proof of the injured Dependency of the injured Details of the loss of income, if any Loss of leave pay with proof of it

For Death Cases 1. Claim Petition U/S 140 of M.V. Act 2. Claim Petition U/S 166 of M.V. Act 3. All police papers as follows : a) FIR copy First Information Report to the Police b) Comp AA Form having the details of accidental vehicles c) Vehicular inspection report d) Spot Panchanama e) Inquest Panchanama f) Hospitalization papers if any g) Detailed Post Mortem Report h) Death Certificate i) Tapas Tipans (Statement of Witnesses) j) Charge Sheet copy. k) Any other related police papers. 4. Vehicular Documents a) R.C. book b) T.C. Book c) Copy of the Policy d) MDL of the driver 5. Age of the injured 6. Income proof of the injured 7. Dependency details Each case should be treated as a separate claim in the system to avoid any confusion of one claim and more cases. Accordingly, the financial authority should be per case basis.

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CONCLUSION
The law of accident claims is fast growing and the amendments to suit the requirement of the object are necessitated but at the same time interest of those should be watched who are disbursing the compensation i.e. Insurance Companies. Without affording them right to contest, imposing liability to make payment cannot be approved by law. Section 170 provides for seeking permission but this provision can be misused by the owners and claimants in collusion. Presently because of increasing scale of compensations almost 10 to 15% or even more cases presented to the Claim Tribunals are fake or the other accidents have been converted into road accidents with connivance of the police authorities. It is necessary that while increasing the burden of the Insurance Companies they must get a right of proper contest to mitigate fake cases and also the quantum. The time is matured for bringing legislation for award of the fixed compensations as in case of rail or airways. A person dieing in rail accident can not get beyond Rs. 4 lakh but a person dieing in road accident can get Rs.4 crore. The payment of compensation based on the vehicle is not reasonable and a structural basis compensation formula without reference to income or age may be brought in so that each and everybody can get compensation of their life irrespective of his poverty or richness. A Scheme should be formulated with the State Police Authorities and the Insurance Companies by which the Insurance Company must know immediately after happening of accident and can make necessary investigations. Insurance Company comes in picture when the claim petition is filed and by that time the evidence can be created to convert the non-accident into accident and also on quantum. The intention of legislation is to provide just compensation and not exorbitant compensation. This should always be kept in mind.

K.C. COLLEGE

MOTOR INSURANCE FOR THIRD PARTY (ACT ONLY POLICIES)

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BIBILOGRAPHY WEBILOGRAPHY

www.legalserviceindia.com www.laws.gov.bm www.Irdraindia.org www.wikipedia.com

K.C. COLLEGE

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