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Insurance Regulator directs Insurers to get PUC before Renewal of Vehicle Insurance.

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Strap: The move is accepted by everyone, but implementing this circular will be challenging.

Insurance Regulatory and Development Authority of India (Irdai) on 6th July , 2018 came out with the circular directing Insurance Companies not to insure a vehicle unless it has valid pollution under control (PUC) certificate on the date of renewal of their vehicle insurance policy. The decision taken by the Insurance Regulator is well intended, but implementing the same will turn out to be a mammoth task for the Insurance Companies.

This circular follows an order of the Hon’ble Supreme Court of India in M.C Mehta Vs. Union of India and other cases which directs all the insurance Companies to insure vehicle only if they have valid PUC certificate. All the participants of the sector like insurers, brokers and web aggregators have welcomed the move, but implementing this order would turn out to be challenging for everyone.

Imagine, if one vehicle owner buys his Auto Insurance (which includes two wheeler and four wheeler) from the Online Portal and get the policy within the minutes. Now that Online Portal or Web Aggregators have to get in touch with the vehicle owners and get his PUC certificate at the time of renewal. Insurers and brokers along with web aggregators have to develop the system where PUC will be also collected while renewing the policy. There is still no clarity on whether vehicle owners have to give the photocopies of PUC or upload it on the website of the insurance companies.

It will be very challenging for players like us to undertake this process. Infact we have to tweak our technology platform specifically for this issue. Not only us, but even insurance companies need to change their technology slightly to implement this circular. Infact, regulator could have developed some system where PUC is checked physically. Say for example, Petrol Pump people, they can verify the PUC before filling in petrol or diesel and don’t allow vehicle owners to fill it unless they have valid PUC.

While getting the PUC to brokers or insurance companies, there are chances of indulging in any fraud activity. Someone might give or upload invaild or old PUC certificate which will further have negative impact in-case there is the claim from that vehicle. Every vehicle owner has to renew their insurance every year. Nowadays, several of the Insurance Companies even give three years insurance for two wheeler, so how to implement this for the policyholders who have three year insurance. There are Multiple Challenges to implement this, but like every time insurance industry will even come out with the solution to this matter.

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