SECP proposes amendments to the Motor Vehicles Act, 1939

October 25, 2018: The Securities and Exchange Commission of Pakistan has convened a consultative session at its head office on the proposed amendments to the Motor Vehicles Act, 1939.

Under the saved Chapter VIII of the Act, it is compulsory for all the motor vehicles owners to have the Motor Third Party Liability insurance cover which offers insurance protection against death and bodily injury to the victims of the road traffic accidents or their legal heirs.

In pursuance of the National Financial Inclusion Strategy, the NFIS Technical Committee on Insurance (NFIS – TCI) proposed certain amendments to the 1939 Act, which include Increasing the compensation limits from Rs. 20,000 to 500,000, introduction of the “no fault option” for payment of claims for death and bodily injuries, separate compensation limits for bodily injuries, and imposition of penalty for having bogus policies or not obtaining third party risk policy.

It is hoped that the proposed amendments will improve implementation through removal of lengthy, costly and cumbersome process of determination of liability through courts. Increasing the compensation limit is also favorable amendment for the claimants.