The Securities and Exchange Commission of Pakistan (SECP) has decided to bind all the commercial, private, and carriage vehicles to have the vehicle insurance in accordance with the international standards.
The SECP is working on the amendments in Motor Vehicle Act 1939 which is outdated and even restricting the traffic police to issue challans to the traffic rules violators.
After the amendments in the law, traffic police will be able to impound any vehicle not having the insurance certificate while issuing a ticket up to Rs. 100,000.
Note that for the commercial vehicles, it is already mandatory to have the insurance certificate but the vehicle owners take it as a formality and tend to get bogus certificates from roadside vendors.
“If a driver is found with a fake insurance certificate, we have proposed to take the matter strictly by imposing a fine up to Rs. 1 million,” an official from SECP said.
In a meeting attended by the representatives from the Ministry of Commerce, and the Insurance Association of Pakistan, it has also been decided that the compensations to the victims will be increased from existing Rs 20,000 in case of road accident.
Although the insurance sector remained to submit their proposals regarding the amendments, the SECP has assured that they will consider the input from all the stakeholders.
Once the draft is finalized, the SECP will forward it to the ministry of finance, from where it will take its due course to the assembly floor.