27th India Fellowship Seminar
Topic: Motor Vehicle Act- Background and implication of changes in the Act
Cyber risk and Terrorism risk Guide Name: Kirti Kothari
Challenges
in pricing
Presenters Names:
T.V.S Sai Aditya
Supervisor:
P.A. Balasubramanian, FIAI
Date: 1stJune 2017
Mumbai
Indian Actuarial Profession
Serving the Cause of Public Interest
Agenda
Motor Vehicle Act, 1988-A Snapshot
Main Objectives of the 2017 Amendment Bill
Amendments and Insertions
Higher Penalties
e-Governance and Licensing
Motor Vehicle Accident Fund
TP Liability and Compensation
Accidental Relief
Implications to Insurers
Other Amendments
Motor Vehicle Act,1988- A Snapshot

Came in July, 1989

Replaced MVA, 1939

217 Sections with 14
Chapters
Licensing
Penalties
Insurance
Registration
Maintenance
Key Objectives of the 2017 Amendment Bill
Reduce
road
accidents
by 50% by
2022
Safer roads
Speedy
treatment to
accident
victims
Motor
Vehicle
Accident
Fund
Insertions and Amendments
Insertions
• e-Governance
• Centralized Data base
• Motor Vehicle Accident
Fund
• Good Samaritan protection
• Golden Hour Treatment
• Vehicle Recall
• Road Safety and Transport
Policy
Amendments
• Penalties
• Hit and Run
Compensation
• TP Liability
• Juvenile Offences
• Licensing
e-Governance & Licensing

Adhaar linkage

Downward revision of licensing age limits( other than transport) from 50 to 40.
Extension up to 60.
Applied Age Validity

30 day extension after expiry removed.

Transport license Sec 14

Validity extended from 3 to 5 years

Min. Educational Qualification removed
Up to 40
40-50
50-55
Above 55

Deduplication - National Register of Driving Licenses Sec 25A

New Vehicle application made by Dealer Sec 41


Vehicle delivery only after registration

Penalty applies if otherwise
Up to 50
10 years
Up to 60
5 years
Speed guns, closed-circuit television cameras, wearable cameras, automated testing
etc. Sec 136A, Sec 56
Motor Vehicle Accident Fund
Originally Initiated by Supreme Court
Use of Fund
•
•
•
•
Treatment of Accident Victims
Hit and Run Compensation
Accidents where no one is liable
Automatic cover to all citizens
Sourcing defined by Central Government
• Grant or loan given by Central Government
• Balance of Solatium Fund
• Other sources to be defined
Sec 164
Accidental Relief
Golden Hour Treatment
Sec 162
• Centrally maintained Fund
• Cashless treatment
Good Samaritan Protection
Sec 134A
• Optional Identity disclosure
• Criminal Liability
Higher Hit and Run Compensation
• 25k to 2lakhs for death
• 12.5k to 50k for injury
Higher Compensation for No Fault
• 10 lakhs for death and 5 lakhs for injury
• Previous compensations were 50k and 25k respectively
Sec 161
Higher Penalties
2 to 10 times increase
Disqualification of license for 3 months
Steep increase for CV and Aggregators
Driver Refresher Course
New Penalties
• 5k for oversize vehicles
• 25k to 100k for Aggregators
• 10k for not providing way for emergency
vehicles
• 25k+ 3 year Guardian imprisonment for
Juvenile offences
Penalty
General
Speeding
Drunk Driving
Seat belt
Insurance
Helmet
License
Overload TW
Overload CV
Old New
100
500
500 5000
2000 10000
100 1000
1000 2000
100 1000
500 5000
100 2000
2000 20000
TP Liability & Compensation
Proposed Cap rejected in Lok Sabha
Report Delay Cap of 6 months
-Sec 166
Accident Information Report
-Sec 159
• 3 Months time limit for Police Officer
Claims Settlement
-Sec 149
• 1st Offer from Insurer within 30 days
• Info from Accident Information report or directly from Claimant
Immediate Liability
-Sec 164 & 173
• Owner of Vehicle or Insurer
• 5 lakhs for Death and 2.5 lakhs for Injury without plea. Plea required for higher amounts
• No Appeal up to 1 lakh. Earlier was 10k.
Defense for Liability
• Alcohol or Drug Influence- statutory liability
• Non-receipt of Premium
-Sec 150
Other Amendments
Juvenile Offence
Sec 199
Vehicle Recall
Sec 110A 110B
• Harm to Environment, Passengers, road users
• Full reimbursement from Dealers
Road Safety Board
Sec 194
• Standards of Vehicles
• Promoting new Technology
• Fines up to100k for Non-Compliance of Road Contracts Standards
National Transportation Policy
• Rural Connectivity
• Better Utilization
• Reducing Congestion
• Improve Road Safety
Sec 66A
Implications to Insurers-Drivers for Lower costs
Higher Penalties
Penalties for road contractors
Golden Hour Treatment
e-Governance and De-dup
Transport Policy
Lesser TP cases contested
Vehicle Recall
•Better safety measures
•Lesser Violations
•Better Road Quality
•Better Maintenance
•Cashless treatment.
•Deaths converted to grievous injuries
•Better monitoring of licenses.
•Better fraud management
•Policy driven measures to ensure safety
•Claims expected to settle at cash takeaway level. (5 lakhs for death and
2.5 lakhs for injury) once liability is established
•Unsafe vehicle types off the road.
•Reduction of both OD and TP claims.
Implications to Insurers-Drivers for Higher costs
Faster claims
reporting
• Due to limit of 6 months for reporting
More claims
reported
• Since filing a plea is not required for claims below 5 lakhs for death
and 2.5 lakhs for injury
• Current average cost for death is around 4-6 lakhs
Faster claims
settlement
• Time limit for Accident Information Report
• Time limit for initial settlement offer from Insurer
• Claims can be processed if reported directly to insurer by claimant
Contribution to
MVA Fund
• Source uncertain
• Will be higher than Solatium due to higher benefits
Summary
Better Road Safety
•
•
•
•
•
e-Governance and Data Base
Good Samaritans
Higher Penalties
Policy Initiatives
Vehicle Recall
Improved Accidental Relief
•
•
•
•
Third Party Compensation
Golden Hour Treatment
Motor Vehicle Accident Fund
Hit and Run Compensation
Bibliography and Scope


Covered Amendments

Penalties Section

14-25A, 40, 41

55, 56, 62, 66

110

134, 136A

149, 159

161 -166

173
Bibliography

Amendments to the Motor Vehicles (Amendment) Bill, 2016

The Motor Vehicles (Amendment) Bill, 2017, As passed by Lok Sabha, April 10, 2017

Notice of Amendments, The Motor Vehicles (Amendment) Bill, 2016, As introduced in Lok Sabha, April
7, 2017

Motor Vehicle Act 1988
Questions?
Sai Aditya T.V.S
Email: [email protected]