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The Madras High Court has withdrawn its order on bumper-to-bumper insurance following submissions made by counsels of Insurance Regulatory and Development Authority of India (IRDAI), General Insurance Corporation of India (GIC) and the Society of Indian Automobile Manufacturers (SIAM) that the Court’s direction may not be conducive and suitable for implementation in the current situation.

Upon hearing the submissions made on behalf of IRDAI, GIC and SIAM, it would appear that the order dated August 4, 2021 mandating the coverage of bumper-to-bumper policy may not be logistically and economically feasible for effective implementation in the present legal dispensation, said Justice S Vaidyanathan in his order issued on Monday.

It was submitted that the directions issued by the Court in Paragraph 12 and 13 of the order have unintended impact, causing severe repercussions on the society and therefore, the directions issued may be withdrawn in the interest of policyholders, automobile industry and public at large.

Further, the issue of long-term third-party insurance coverage has been mandated by the Apex Court in September 2018, and IRDAI has been periodically monitoring the changing scenario from time-to-time. Hence, there is no need for issuance of such compulsory directions, it said.

The Court heard the submissions of senior counsels MB Raghavan for IRDAI, S Arunkumar for GIC and N Vijayaraghavan for SIAM, who stated in one voice that the views expressed by this Court on August 4 in respect of protective coverage to uninsured innocent victims, such as gratuitous occupants in a private car and pillion riders, will be duly taken care in consultation with IRDAI to safeguard the interest of innocent victims, which is the anxiety of the Court.

‘Better insurance’

Raghavan submitted that IRDAI will consider better and fuller insurance coverage to all unfortunate victims, be it drivers, owners or gratuitous occupants or pillion riders, as the case may be and prayed for suitable modification or withdrawal of the directions issued by this Court on August 4.

“Considering the overall submissions made by the parties, including Vijayaraghavan and taking into account the concern of the IRDAI, this Court feels that the direction issued by this Court on August 4, in Paragraphs No. 13 may not be conducive and suitable for implementation in the current situation. Therefore, the said direction in Paragraph No. 13 is hereby withdrawn for the present,” the order said.

“This Court hopes and trusts that lawmakers will look into this aspect and examine the need for suitable amendment in the Act, relating to wide coverage of vehicles to protect the innocent victims,” it stated.

In view of withdrawal of the direction regarding bumper-to-bumper policy, the Circular dated August 31, issued by the Joint Transport Commissioner, Chennai, also stands cancelled. The Registry is directed to remove Paragraph No. 13 from the earlier order of this Court dated August 4 and issue a fresh copy of the order to the parties concerned, the order said.