IRDAI advises insurers to cancel the RC of the vehicle in case of total loss claim settlement

Jul 29, 2019 | by Avantis RegTech Legal Research Team


The Insurance Regulatory and Development Authority of India (IRDAI) on July 26, 2019, advised all the insurers to cancel the certificate of registration (RC) of the vehicle in case of total loss claim settlement. The IRDAI has noticed that in case of total loss (TL) of the vehicle, salvage of the vehicle is being sold to scrap dealers without cancelling certificate of registration of the vehicle. The Law Enforcement Authorities has informed that documents pertaining to such vehicles are being misused like giving new identity to the stolen vehicles by forging engine number and chassis number of destroyed vehicles under TL claims.

Section 55 of Motor Vehicle Act 1988 specifies that if a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner shall, within fourteen days must report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward to the authority the certificate of registration of the vehicle. The registering authority shall cancel the registration and the certificate of registration, or, if it is not, shall forward the report and the certificate of registration to the original registering authority and that authority shall cancel the registration.

In this regard, IRDAI has advised all the insurers to cancel the certificate of registration of the vehicle in case of total loss claim settlement.

[Circular No. IRDAI/NL/CIR/MOTOD/118/07/2019]


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