Insurers have raised concerns on putting the onus on checking the PUC certificate, the validity of which is only six months
General insurance companies are likely to move the Supreme Court (SC) within the next two months against the mandatory pollution under control (PUC) certificate for motor third party insurance renewal. Insurers will seek a reprieve against the insurance regulator’s order to disallow insurance without valid PUC.
"Since the onus is on to ensure that PUC certificate is valid. However, these certificates are valid for six months. It will be a real challenge to keep checking every six months for their validity," said the head of a private life insurance company.
Insurance executives are worried that making it mandatory could reduce motor insurance renewals. Currently, only about 45-50 percent of vehicles have valid third party motor insurance that is mandatory by law. While all vehicles have insurance at the time of purchase, renewals after one year are low.
In July 2018, the insurance regulator said that it will be mandatory for vehicle owners to present a PUC certificate during motor insurance renewals. Without this, the vehicle insurance cannot be issued.
This was in response to a 2017 SC order that had directed insurance companies not to insure a vehicle unless it had a valid PUC certificate on the date of renewal of the policy.
The onus will be on insurance companies to ensure that petrol and diesel vehicles comply with the order the IRDAI has asked them to comply with these directions immediately.
For customers, when they buy a new bike or car, there is already a PUC certificate available for it and validity of the certificate is for a year. After that, a PUC test needs to be done every six months.
However, it is unclear how the rule will be implemented when a vehicle owner wants to insurance the car/bike for a three-year period, as the premium is paid at one go and the policy gets renewed only after a three-year period.According to the Motor Vehicle Act, all vehicles running on Indian roads need a mandatory motor third party insurance. This is offered by general insurance companies, whereas the pricing is decided annually by IRDAI.