Mandatory PUC Certificates

Against the directive of the Ministry of Road Transport and Highways, the General Insurance Companies have expressed reservatons, to provide third party insurance cover only to vehicles which possess valid pollution under control (PUC) certificates.

The Ministry had 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. “It may not be possible to implement this directive. We are planning to meet the officials of the Insurance Regulatory and Development Authority (IRDA) to explain the difficulties involved in implementing the PUC certificate order,” said a senior official of a leading general insurance company.

The Ministry directed insurers that “directions may please be complied without any exception”. “A compliance report to this Ministry may be submitted latest by June 15, 2018,” it said.

“Please refer to the order dated August 10, 2017 passed by the Supreme Court in Writ Petition (C) No. 13029 of 1985 in MC Mehta vs Union of India and others, wherein the Court has directed that the insurance companies will not insure a vehicle unless it has a valid PUC certificate on the date of renewal of the insurance policy. It may further be noted that the fitness certification is also a mandatory requirement for all validly registered transport vehicles,” the Ministry of Road Transport mentioned in its letter to insurance companies.

The SC bench headed by Justice Madan B Lokur was hearing a PIL filed by environmentalist M C Mehta way back in 1985 dealing with various aspects of pollution, and had asked the Ministry of Road Transport and Highways to ensure all feul refilling centres in NCR have PUC centres.

Though it was expected that Insurance Regulatory and Development Authority (IRDA) may issue some instruction to the general insurers for complying with the SC order, the regulator refrained from taking the step and took a stand that the matter is between SC and insurers and there was need for its intervention. “As insurers it would be difficult for us to ensure the use of PUC by any customer. We don’t have the means to enforce it,” said an insurance official.

IRDAI administers the third party insurance pricing and reviews the rates annually based on a pre-determined formula. Various factors including the loss ratios for insurers, inflation and higher awards by judiciary were taken into account.