General insurers have expressed reservations about a directive of the Ministry of Road Transport and Highways for them to provide third party insurance cover only to vehicles which have a valid pollution under control (PUC) certificate.
In a directive to general insurance companies on 30 May, the Ministry said, “It must be ensured that no third party insurance policy is issued or renewed without ascertaining the availability of a valid PUC. In the case of transport vehicles, the availability of a valid fitness certification is also mandatory.”
However, insurance companies said it’s not practical to execute the Ministry’s latest directive, reports Indian Express.
A senior executive at a leading general insurance company, said, “We are planning to meet the officials of the IRDAI to explain the difficulties involved in implementing the PUC certificate order.”
The Ministry's directive followed an order dated 10 August 2017 by the Supreme Court stipulating that insurance companies are not to insure a vehicle unless it has a valid PUC certificate on the date of renewal of the insurance policy. The bench had been hearing a public interest litigation case filed by an environmentalist .
The Supreme Court accepted the recommendations of the Environment Pollution (Prevention and Control) Authority (EPCA) to ensure mandatory linking of the PUC certificate with the issue of annual vehicle insurance.
Though it had been expected that the IRDAI might issue instructions to general insurers to comply with the court order, the regulator had refrained from taking the step and took the stand instead that the matter is between Supreme Court and insurers.