Lok Sabha Question No. 170 (UNSTARRED), answered on 2020-02-03
Subject: Third Party Insurance
Ministry: FINANCE
Asked by: Soyam Babu Rao, Ganesan Selvam, Gautham Sigamani Pon, Heena Vijaykumar Gavit, Dhanush M Kumar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION No. 170

TO BE ANSWERED ON MONDAY, FEBRUARY 3, 2020/MAGHA 14, 1941 (SAKA)

## THIRD PARTY INSURANCE

170. SHRI SOYAM BAPU RAO:

SHRI SELVAM G.:

SHRI GAUTAM SIGAMAANI PON:

DR. HEENA GAVIT:

SHRI DHANUSH M. KUMAR:

Will the Minister of FINANCE be pleased to state:

- (a) whether as per Insurance Regulatory and Development Authority of India (IRDAI) the period for which the insurers can offer long term motor two wheeler insurance policy, if so, the details thereof;
- (b) whether the Government is considering to introduce one-time premium for third party insurance of new vehicle;
- (c) if so, the details thereof and the time by which the one-time premium policy on new vehicle is likely to come into effect;
- (d) whether IRDAI has asked non-life insurers to ensure easy availability of third party motor insurance cover to vehicle owners and if so, the details thereof;
- (e) whether IRDAI has also asked the insurers not to deny any requests for such third party insurance cover by vehicle owners and if so, the details thereof;
- (f)  whether  many  State  Governments  have  complained  that  cumbersome  process  of obtaining  third  party  insurance  is  hampering  the  implementation  of  the  apex  court orders and if so, the details thereof; and
- (g) the other steps taken by the Government to settle the third party insurance claims in a time bound manner?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

(a) to (c): Insurance Regulatory and Development Authority of India (IRDAI) has informed that vide Circular No. IRDAI/NL/CIR/MOT/137/08/2018 dated 28.08.2018, effective from 01.09.2018,  the  General  Insurance  companies  offer  third  party  liability  insurance  for  a duration of five years for new two wheelers, as mandated by the Supreme Court in its order no. 295/2012.The policyholders of two wheelers also have the option of renewal of policy  for  a  period  of  three  year.    Besides,  the  Insurance  companies  also  provide  the option  of  long  term  package  cover  including  Own  Damage  Insurance  for  the  new  two wheelers for a period of five years.

At present, there is no such proposal with IRDAI to introduce one-time premium for third party insurance of new vehicle.

(d) to (f): IRDAI has issued various circulars to the General Insurance Companies from time to time to ensure  seamless access and availability of Motor Third Party Insurance cover wherein vide circulars dated 31.10.2002, 29.07.2005, 16.03.2006 and 01.01.2018 issued directions to the General insurance Companies not to deny any requests for third party insurance of the vehicle owners. As such, they have not received any complaint in this regard from any State Government.

(g) :  As  far  as  settlement  of  insurance  claims  in  a  time  bound  manner  is  concerned, Ministry of Road Transport & Highways has informed that they have amended Chapter XI of the Motor Vehicles Act, 1988 in which following provisions under section 51 'Chapter XI' has been added through the Motor Vehicles (Amendment) Act, 2019 : -

- i. Section  149  (2)  &  (3)  -  requires  that  the  insurance  company  make  an  offer  for settlement  to the claimant  within 30 days from  receiving  information  of  the accident from the claimant or the Claims Tribunal.
- ii. Section  149  (3)  states  that  if  the  claimant  accepts  the  offer  for  settlement,  the Claims  tribunal  shall  make  a  record  of  such  settlement,  and  the  insurance company is mandatorily required to make the payment of compensation within 30 days from the date of such record.
- iii. Section  159  provided  that  the  police  officer  conducting  the  investigation  into  an accident involving a motor vehicle is required to prepare an accident information report  to  facilitate  the  settlement  of  claim,  and  submit  the  same  to  the  Claims Tribunal and such other agency as may be prescribed, within three months .

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