Insurance of Motor Vehicle Against Third Party Risk
Q: What is the purpose of issuing a certificate of insurance according to rule 141?
An authorized insurer must issue a certificate of insurance in Form 51 to every holder of a policy for each vehicle insured.
Q: What is a cover note, and how long is it valid?
According to Central Motor Vehicle Rules ,A cover note, issued in Form 52 by an authorized insurer, is a temporary document valid for sixty days from the date of issue. The insurer must issue a formal insurance policy before this period expires.
Q: Who is responsible for authenticating certificates of insurance and cover notes?
Every certificate of insurance or cover note issued must be duly authenticated by a person authorized by the insurer.
Q: What steps should be taken when the ownership of a vehicle is transferred?
When a vehicle covered by an insurance policy is transferred, the policy automatically transfers to the new owner. The new owner must inform the authorized insurer within fourteen days, providing details of the vehicle's registration, transfer date, previous owner, and insurance policy.
Q: Are there any restrictions on the content of insurance certificates or cover notes?
Yes, insurance certificates and cover notes must not contain any advertising matter on either the front or back.
Q: What should be done if a certificate of insurance or cover note is lost, destroyed, or damaged?
If a certificate or cover note is lost, destroyed, or damaged, the holder must declare the situation to the insurer, return the damaged document if applicable, and pay a fee of twenty rupees. The insurer will then issue a duplicate marked "Duplicate." If the original document is later found, it must be surrendered to the insurer.
Q: What records must authorized insurers maintain?
Authorized insurers must keep records for each policy for five years, including details such as the policyholder's name and address, vehicle registration, policy dates, indemnity conditions, and information on certificates or cover notes issued.
Q: What are the record-keeping requirements for motor vehicles exempted from insurance?
Authorities owning exempted vehicles must keep records of these vehicles, including details of any certificates issued and their cancellation. They must also maintain records of any certificates issued under these provisions.
Q: What is the requirement for providing information to the Central or State Government or authorized police officers?
Persons, authorities, or insurers required to keep records must provide any requested information without charge to the Central Government, State Government, or authorized police officers.
Q: What is the purpose of the fund established under rule 151?
The fund is established to cover any liabilities arising from the use of vehicles owned by authorities or their employees, including liabilities under the Workmen's Compensation Act, 1923.
Q: What are the financial requirements for establishing and maintaining the fund?
The fund must start with at least five lakhs rupees, kept in a bank or with the Government. Each year, the authority must deposit a minimum of two hundred rupees per vehicle in running condition. Payments can cease if the fund exceeds twenty lakhs rupees or two thousand and five hundred rupees per vehicle. If the amount falls below these levels, payments must resume.
Q: How should the funds be managed according to rule 153?
The authority must keep a cash deposit of at least fifty thousand rupees in a bank. The remaining amount in the fund should be invested in Government securities.
Q: What are the procedures for handling Government securities in the fund as outlined in rule 154?
Government securities in which the fund is invested must be transferred to the bank. The authority can exchange these securities for cash or other Government securities of equal or greater value. The bank will carry out these exchanges and charge a commission.
Q: What are the reporting requirements for the bank holding the fund, as per rule 155?
The bank must provide a statement to the authority specifying the assets held on its behalf. A copy of this statement must also be sent to the Central Government or the relevant State Government whenever there is a change in the assets.
Q: How is interest on the deposits managed according to rule 156?
The bank is responsible for paying interest realized on each deposit or security held in the fund to the authority.
Q: What restrictions are there on withdrawing money from the fund?
Money can only be withdrawn to meet liabilities arising from the use of motor vehicles owned by the authority or its employees, including liabilities under the Workmen's Compensation Act, 1923. Withdrawals must be authorized by an officer of the authority, and a copy of this authorization must be provided to the bank.
Q: How should the authority handle the settlement of claims from the fund?
The authority must follow directions issued by the Central or State Government regarding the procedure for settling claims to be met out of the fund.
Q: How is the approved list of foreign insurers maintained?
The Central Government publishes and updates an approved list of foreign insurers in the Official Gazette. A foreign insurer can only be added to this list if it has at least one guarantor. Insurers who cease to have a guarantor are removed from the list.
Q: What is the process for an insurer to guarantee a foreign insurer?
An insurer must apply to the Central Government in Form 55 to guarantee a foreign insurer. If approved, the foreign insurer is added to the approved list, and the guarantor is also listed. To cease guaranteeing a foreign insurer, the guarantor must give a two-month notice using Form 56.
Q: What steps should a visitor take to have their foreign insurance certificate endorsed?
A visitor must present their certificate of foreign insurance in Form 57 to a Customs Collector or appointed officer for endorsement. The officer will endorse the certificate if it meets all requirements and is valid in India. Endorsements cannot extend beyond the validity of the original certificate and must not exceed one year in total.
Q: What is the validity of a certificate of foreign insurance with an endorsement?
A certificate of foreign insurance with a valid endorsement is treated as if it were issued by the guarantor specified in the endorsement. It complies with Chapter XI of the Act and is deemed to have been issued by the guarantor.
Q: What are the record-keeping requirements for guarantors of foreign insurers?
Guarantors must maintain records of certificates of foreign insurance issued under their guarantee. If a guarantor has ceased to be one, they must also keep records of certificates issued in the last five years. These records must include details as required for insurers under rule 147 and be updated promptly.
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