Giving a much needed relief to victims of road accidents, a Motor Vehicle Accident Fund is to be set up by the Union government to provide compulsory insurance cover to all road users in the country.
The fund is one of the key highlights of the Motor Vehicles (Amendment) Act, 2019, passed by Parliament recently and that has been given assent by the President on August 9.
The fund will be utilised for the treatment of persons injured in road accidents in accordance with the scheme to be framed by the Centre under Section 162 of the Motor Vehicles Act. Besides, the fund will be used for providing compensation to representatives of a person who dies or gets grievously injured in a hit-and-run motor accident in accordance with the scheme to be framed under Section 161.
The maximum liability amount that will be paid in each case will be prescribed by the Centre. When the claim of such persons becomes payable, the same amount will be deducted from the claim received by such person from the insurance company.
The fund will be managed by an authority or agency tasked by the Centre and having knowledge of insurance business of the agency, capability of the agency to manage funds and any other criteria fixed by the government. The accounts of the fund will be audited by the Comptroller and Auditor General of India at intervals specified by the C&AG.
The accounts of the fund as certified by the C&AG together with audit report will have to be forwarded annually to the Central government and will have to be laid before the Lok Sabha and Rajya Sabha.
All schemes framed under sub-section (3) of Section 161, as it stood immediately before the commencement of the Act, will be discontinued and all rights and liabilities accruing thereunder will be met out of the fund, as per the official notification.
