In a move that has posed a serious problem for the domestic general insurers, Government on Wednesday has banned the saleor renewal of mandatory motor TP policy by the general insurance companies with immediate effect unless the customer is not furnishing a Pollution Under Control Certificate (PUC) while buying the cover.
In case of transport vehicles, the availability of a valid fitness certification is also mandatory for buying a third part motor cover, said the new government.
“The directions may please be complied without any exception. A compliance report to this Ministry may be submitted latest by 15th June, 2018,’’ said Abhay Damle, joint Secretary, Ministry of Road Transport Highways in his directive to the general insurers.
Damle has issued such a directive to all the general insurers and ministry of finance, the officiating ministry of the insurance industry, on the basis of an earlier Supreme Court (SC) judgment that had said that the insurance companies would not insure a vehicle without valid PUC on the date of renewal of the insurance policy.
“ Please refer to the order dated 10th August, 2017 passed by Hon'ble Supreme Court in Writ Petition (C) No. 13029 of 1985 in MC Mehta Vs Union of India and Others, wherein the Hon'ble Court has directed that the insurance companies will not insure a vehicle unless it has a valid PUC certificate on the date of renewal of the insurance policy. It may further be noted that the fitness certification is also a mandatory requirement for all validly registered transport vehicles. In view of above directions, it must be ensured that no third-party insurance policy is issued or renewed without ascertaining the availability of a valid PUC. In case of transport vehicles, the availability of a valid fitness certification is also mandatory.'' said Damle's directive.
However such a sudden directive from the Ministry of Road Transport Highways has left the general insurers in a quandary as the third party motor business contributes almost Rs 30,000 crore of premium for them though it is a loss making business for the industry.
“We don’t know how to implement such an order now so suddenly. How do we find the veracity of the PUC ?After the SC judgment since Aug, 2017, we had tried to appeal to the SC twice explaining our atand but it refused to allow our intervention. We now plan to take up the issue wIth the IRDAI, ’ said a CEO of an insurance company.
Earlier, in a bid to curb pollution, the SC on Aug 10, 2017 had issued a slew of directions including that insurance companies will not renew insurance of a vehicle unless the owner provides a PUC .
A bench headed by Justice Madan B Lokur also asked the Ministry of Road Transport and Highways to ensure that all fuel refilling centres in the National Capital Region (NCR) have PUC centres.
The court considered the suggestions given by Environment Pollution Control Authority (EPCA).
The bench was hearing a PIL filed by environmentalist M C Mehta way back in 1985 dealing with various aspects of pollution.
The road transport ministry had opposed EPCA’s suggestion on two grounds. One, coverage of third party insurance of existing vehicles was very low, and hence PUC linkage with insurance might not yield desirable results in reducing vehicular emissions. Also, validity of PUC certificates varied from three months to one year whereas insurance was renewed annually.