Motor Insurance: Chapter One.
Brief History:
1894-first time the motor car was introduced in the UK, then the first time motor third-party insurance was issued in 1895, comprehensive cover was introduced in 1899, and another milestone was in 1903 when the first car and general insurance corporation was established. After the First World War motor accidents were on the rise and hence the Road Traffic Act of 1930, and 1934 were introduced in the UK which was consolidated in the year by the Road Traffic Act of 1960.
How motor insurance got developed in India– The Motor Vehicle Act was established in 1939, this act came into force on 1st July 1939, and then it was largely amended by 59 of the Motor Vehicle Act 1988 since then the motor vehicle is known as the MV Act 1988 though it has been amended several times and still being amended from time to time. Motor insurance in India was under a tariff regime till March 2008, and thereafter as the world market was being de-tariffed the Indian Insurance market followed suit, and motor insurance was de-tariffed. Chapters, VIIA and VIII of MV Act 1939 deal with the third party. Chapter VIII was brought into force on 1st July 1946 and Chapter VIIA on 1st Oct. 1982.
why amendments to the MV act– because of changes in the road transport technology, the pattern of passengers and freight movements, the development of road networks, and particularly the improved techniques in motor vehicle management. Various committees were constituted and based upon their recommendations changes were made in the( Motor Vehicle Act from time to time (for example National Transport Policy Committee, National Police Commission, Road Safety Committee, Low Powered Two wheelers Committee, etc.,) A working group was made in the year 1984 (January) to review the provisions of MV Act, 1939.
Important changes in MV Act 1988: Rationalization of certain definitions and some more addition of new definitions was done, the strict procedure for the license was made, norms for anti-pollution devices were made, fitness certificate to be given after testing, a system of registration was more effective now, solatium fund administration was handed over to GIC, a council was made to overlook the affairs of road safety, (Road Safety Councils)certain road traffic offenses were to attract more penalties.
Once again MV Act got amended in the year (54) 1994 with the following changes:- 1. Further modification and simplification of definitions. 2. Licensing Procedure got simplified 3. Alteration of the vehicle is not allowed 4. Under Sections 66 & 67 free permits were given for nonpolluting vehicles (using CNG, LPG). 5. Celining on individuals and companies to curb benami transactions 6. Authority to State Governments to appoint one or more Appellate Authority in the State. 7. Punitive actions for fake parts 8 Increase in the amount of hit-and-run accidents. 9. Removal of the time limit for filing cases in MACT court 10. Punishments are more stringent for offenses. 11. A new formula was introduced for calculating the amount of compensation (award) to road victims based on age/income which is more liberal.
Amendment Act 27 of 2000– Alteration of vehicle was not allowed except where fuel is changed from petrol diesel to LPG/CNG. The use of eco-friendly fuel was encouraged.
Amendment 39 of 2001– The facility given under sections 66 & 67 in the year 1994 (free permit for eco-friendly vehicles) was removed.
Author-manifoldadvisory.com, mohanvatnani@gmail.com, Paresh Lalwani (CA),
contact for Rental Car, Innova, Maruti, and Bus for tours and travels
