ISLAMABAD, Feb 14: The Securities and Exchange Commission of Pakistan (SECP) has decided to eliminate issuance of bogus third-party motor-vehicle insurance certificates by unauthorised persons and entities.The decision in this regard was taken in a meeting presided over by Caretaker Finance Minister Dr Salman Shah on Tuesday but was given final touches on Thursday in a meeting held between the SECP and the Insurance Association of Pakistan (IAP).
SECP Chairman Razi-ur-Rahman Khan briefed the meeting on the pros and cons of the commission’s proposal to eliminate issuance of bogus third party insurance certificates. The proposal developed by the SECP, in consultation with the IAP, recommends for an efficient and effective process to ensure that only authorised insurance companies issue third party insurance certificates and that bogus certificates issued by bogus companies are not entertained.
Now the Excise and Taxation department will ensure that all third party insurance certificates submitted at the time of payment of motor vehicle tax are issued by the registered insurance/takaful companies.
The interior ministry has agreed to ensure strict compliance.
The IAP has agreed to issue third party insurance certificates, which provide for admission of liability “on a no fault basis”. Compensation made under this policy document will be as per the schedule of benefits of Workmen Compensation Act 1923 (prevalent capital benefits are Rs200,000 per life), subject to an overall aggregate limit of any one accident of Rs10m and compensation shall be payable to the third party without going to courts.
The SECP will provide a list of registered insurance companies, which are authorised to issue the certificates. The Excise and Taxation department will only accept certificates issued by these entities.
The IAP has drawn up a scale of charges, which would be followed by insurance/takaful companies.
To ensure that motor vehicle certificate issued by authorised insurers/takaful operators are accepted by the concerned Excise and Taxation offices and for the success of the scheme, it was agreed that a close liaison be maintained by SECP and IAP with the relevant senior officials of the respective provinces. For this purpose, the SECP has had senior level meetings with the governments of Sindh and Punjab.
In order to ensure that the third party insurance certificates cannot be forged easily, the IAP will issue third party certificates on security paper with built- in security features. In order to minimise harassment from police officials, the IAP will design and introduce insurance tokens, which will be displayed by the insured vehicles on their windscreens.
Also, IAP agreed to set up a website for maintaining database for valid motor third party insurance covers issued by their member companies. This website will assist the Excise and Taxation and other law enforcing agencies to determine genuineness of the insurance certificate being presented to them.
Under this scheme about 7 million vehicles plying on the road (including more than 50 per cent motorcycles) will have proper motor third party insurance cover, as against mere 10 per cent vehicles having insurance cover from authorised insurance/takaful companies.
March 31 has been agreed as date for launching the proposed scheme and a massive publicity and awareness campaign will be launched by SECP and IAP, shortly.
