To comply with the SC Order, the IRDAI published the Circular dated 28 August 2018, by which all GICs were given certain directions in respect of motor third party insurance covers for new cars and new two-wheelers with effect from 1 September 2018. IRDAI circular dated 28 August 2018 (Ref No IRDAI/NL/CIR/MOT/ 1) (Circular dated 28 August 2018).Further, the SC Order clearly specified that it would be up to the owner of the vehicle to decide which policy should be taken, except that the third-party insurance is mandatory as per the Motor Vehicles Act, 1988. The SC order also left it up to the insurance companies to deal with ‘comprehensive insurance policies’ (which includes own damage cover, third party risk cover, personal accident cover for owner-driver, etc) on a separate footing.
As per the SC Order, this third-party insurance may be taken as a separate product. Pursuant to the aforesaid meeting, it was decided to make it mandatory for all General Insurance Companies (GICs) to issue a three-year third-party insurance cover for new cars and five-year third-party insurance cover for new two wheelers. With the intent of providing compensation by way of third-party insurance cover to victims of accidents, including those who have died and their legal representatives, the Supreme Court Committee on Road Safety, held detailed discussions with, inter alia, the IRDAI, in a meeting dated 26 March 2018. Supreme Court Order dated 20 July 2018 in Writ Petition(s)(Civil) No(s).The Revised Circular has been issued in light of complaints and communications received from various stakeholders regarding certain aspects of implementation of CPA insurance for owner drivers, the background to which is elucidated below. IRDAI/NL/CIR//MOTP/1 dated 9 October 2018 (Revised Circular) providing certain clarifications regarding the implementation of Compulsory Personal Accident (CPA) insurance for owner drivers. The Insurance Regulatory Development Authority of India (IRDAI) has issued a circular ref.
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