Govt eyes major revamp of accident compensation rules; trust to decide hit-and-run payouts—Check details

In a bid to speed up compensation for road accident victims especially in hit-and-run cases, the central government is planning big changes to the rules related to the Motor Vehicle Accident Fund.

The Ministry of Road Transport and Highways (MoRTH) has proposed changes to the Central Motor Vehicles (Motor Vehicles Accident Fund) Rules, 2022. These changes would hand over key responsibilities to a specially set-up trust, which would be responsible to handle tasks such as paying compensation in hit-and-run cases, collecting money from insurance companies, and using the fund properly.

The draft rules released by MoRTH on May 28 and are open to public suggestions and objections for 30 days. If the draft rules go through, the trust will manage the entire fund and decide how much to pay in each case, making sure insurance companies are paying their share, and keeping track of how the money is used.

Here’s what all key changes will take place:

The biggest change is that this new Trust will have the final say in compensation for victims in hit-and-run cases. If a vehicle involved in an accident cannot be identified, funds will be given to a designated agency for disbursal. But if that vehicle is later traced, the insurer will have to reimburse the money.

The Trust will also be responsible for handling and reviewing how the Accident Fund is used. It will have the power to recommend changes to compensation schemes, authorise agencies to handle disbursals, and even frame its own by-laws for operation.

Insurance companies to contribute

Another notable aspect of the proposal is reserving some section of third-party motor insurance premium proceeds for the fund. The insurers will be depositing this share into the fund within the timeline specified by the Trust, thus ensuring smooth inflows while increasing the predictability of payouts from the fund.

Accountability and record-keeping

The Trust or any authorised agency is expected keep proper books of account for recording receipts and disbursals, shall ensure payments are made within stipulated times and retained minimum balances in accounts as required by Order, intended to keep the system transparent and responsive.

Rule tweaks and clarifications

The proposed changes include minor but significant updates to the existing Motor Vehicle Accident Fund Rules, 2022, involving changing the rank of officials in charge of managing the fund, fixing some terms (like replacing “amount” with “account”), and updating the people involved in important rules such as Rule 6, Rule 8, Rule 10, Rule 11, and Rule 12. These changes are meant to make the rules clearer and easier to follow.