Page 35 - Insurance Times April 2021
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b. There is non-receipt of premium as required under  payment of compensation on structured formula basis
                 Section 64 VB of the Insurance Act, 1938. Insurers  along with Schedule II (as amended by Notification
                 may deny the TP liability claims if the insured has  dated 22.5.2018) also stands deleted.
                 not paid the insurance premium.                 However, a new Section 164 has been introduced under
             The aspect of Pay & Recover as mentioned in Section  Chapter XI that mandates that the owner of the motor
             149(5) of Act prior to Amendment is now deleted.    vehicle or the authorized insurer shall be liable to pay
                                                                 Rs 5,00,000 in case of death and Rs 2,50,000 in case of
             It shall be the duty of the owner of the vehicle to furnish
             to the Tribunal or Court the information as to whether  grievous hurt in case the claimants do not want to
             the vehicle has been insured on the date of the     contest and plead negligence of the offending driver.
             accident. And if so, the name of the IC with which it is  However, now there is no add-on fault liability provision
             insured.                                            over and above no-fault compensation. Section 165(1)
                                                                 mandates that the acceptance of payment of
                                                                 compensation under Section 164 is conclusive and that
         4. Limitation of Period on Filing Accident Cases
                                                                 it will result in lapse of claim petition under any other
             (Section 166 (3):                                   section.
             Time limit of six months for filing an accident claim that
             was taken away in the 1994 Amendment has been       From insurers perspective this provision may bring
             reinserted in the Act. No time limit for filing     certainty and reduced liabilities to their fold.
             compensation by the victims of the road accidents
             paved a way and relief to fraudsters to take advantage  6. Motor Accident Fund (Section 164 B) to
             of it and it created a challenge to insurers in contesting  Provide Compulsory Insurance Coverage to All
             such cases and their actuaries to determine the ultimate  Road Users in India:
             cost of TP claims. Now, after amendment of the Act,  The Amendment Act directs Central Government for
             no application for compensation shall be entertained  creation of Motor Vehicle Accident Fund to be
             unless it is made within 6 months of the occurrence of  augmented by a special tax or cess. The source of funds
             the accident. This welcome change will bring reduction  may include payment of a nature notified by the Central
             in doctored & fraudulent claims and will ensure faster  Government or by a grant or loan made by the
             settlement of TP liabilities.                       government or by transferring the balance of Solatium
                                                                 Fund to this Fund or any other source as prescribed by
         5. No-Fault Liability (Section 164) & Interim           the government. This fund may be utilized for:
             Relief:                                             a. Providing interim relief to victims of motor
             Chapter X containing Section 140 to 144, dealing with   accidents.
             provisions of liability without fault in certain cases and  b. Medical treatment of persons injured in road
             provision of interim relief of Rs. 50,000 in case of death  accidents by providing cashless trauma care during
             and Rs. 25,000 in case of permanent disablement now     the Golden Hour, as per golden hour scheme.
             stands deleted.
                                                                 c.  Monetary compensation to next kin of victim who
             Section 163-A containing special provisions as to       died in Hit & Run cases and to a person grievously
                                                                     hurt in a Hit & Run case.

                                                                 d. For providing Compulsory Insurance cover to all
                                                                     road users in the territory of India. It also directs
                                                                     Central Government to make schemes.
                                                                 e. Compensation to any other persons as prescribed
                                                                     by the Central Government.
                                                                 The scheme shall provide for procedure to recover funds
                                                                 disbursed under such scheme from the owner of the
                                                                 motor vehicle, where the claim arises out of the use of
                                                                 such motor vehicle.The compensation paid out of the
                                                                 fund shall be deductible from the compensation which
                                                                 the victim may get in future from the Tribunal.

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