Page 67 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

The Motor Vehicles Act, 1988 being a piece of social
legislation designed to protect the rights of such victims
of Hit and run accidents. Section 161 of the Motor
Vehicles Act, 1988 provides for fixed compensation of
Rs. 25,000/- in case of death and Rs. 12,500/- in case
of grievous hurt as defined under Indian Penal Code.
The same amount is proposed to be revised to Rs.1
lakh in case of death and Rs. 50,000/- in case of grievious
hurt

However, payment of compensation to the hit and run
accident victims was not decided by the Motor Accident
Claims Tribunal but by the designated Revenue
Authorities established at district level.

Compensation was paid to the victims from a fund
created for that purpose known as "solatium fund" funded
by the non-life insurance companies in India based on
their gross motor premium and State as well as Central
Govt. Earlier the fund was administered by the General
Insurance Corporation.

But after conversion of General Insurance
Corporation into General Insurance Corporation Re,
now the fund is administered by the New India
Assurance Company.

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