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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.
The Insurance Times, April 2021 35