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The Motor Vehicles Ordinance, 1983

( Ordinance NO. LV OF 1983 )

Chapter IX

INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS

Co operative insurance
125. (1) The 1[Authority] may, on the application of a co operative society of transport vehicle owners registered or deemed to have been registered under the 2[Co operative Societies Ordinance, 1985 (I of 1985)], or under an Act of Parliament governing the registration of Co operative Societies allow the society to transact the business of an insurer for the purposes of this Chapter, subject to the following conditions, namely:-
 
 
 
 
(a) the society shall establish and maintain a fund of not less than two hundred thousand Taka for the first fifty vehicles or fractional part thereof and pro rata for every additional vehicle in the possession, of members of and insured with the society and the said fund shall be lodged in such custody as the Government may 3[prescribe by rules] and shall not be available for meeting claims or other expenses except in the event of the winding up of the society;
 
 
(b) the insurance business of the society shall except to the extent permitted under clause (d) be limited to transport vehicles owned by its members, and its liability shall be limited as specified in clause (b) of sub-section (2) of section 110;
 
 
 
 
(c) the society shall if required by the Government re insure against claims above such amount as may be specified by the Government;
 
 
 
 
(d) the society may, if permitted by the Government and subject to such conditions and limitation as may be imposed by it, accept re insurances from other societies allowed to transact the business of an insurer under this section;
 
 
 
 
(e) the provisions of this Chapter, in so far as they relate to the protection of third parties and to the issue and production of certificates, shall apply in respect of any insurance effected by the society;
 
 
 
 
(f) an independent authority not associated with the society shall be appointed by the Government to facilitate and assist in the settling of claims against the society;
 
 
 
 
(g) the society shall operate on an insurance basis, that is to say-
 
 
 
 
(i) it shall levy its premium in respect of a period not exceeding twelve months, during which period the insured shall be held covered in respect of all accidents arising, subject to the limits of liability specified in clause (b) of sub section (1) of section 110;
 
 
 
 
(ii) it shall charge premiums estimated to be sufficient, having regard to the risks, to meet the capitalised value of all claims arising during the period of cover, together with an adequate charge for expenses attaching to the issue of policies and to the settlement of claims arising thereunder;
 
 
 
 
(h) the society shall furnish to the Controller of Insurance the returns required to be furnished by insurers under the provisions of the Insurance Act, 1938 (IV of 1938), and the Controller of Insurance may exercise in respect thereof any of the powers exercisable by him in respect of returns made to him under the said Act; and
 
 
 
 
(i) the society shall, in respect of any business transacted by it of the nature referred to in clause (ii) of the proviso to sub section (1) of section 110, be deemed to be an insurer within the meaning of sub-section (1) of section 10 and sub section (6) of section 13 of the Insurance Act, 1938 (IV of 1938);
 
 
 
 
(2) The provisions of the Insurance Act, 1938 (IV of 1938), relating to the winding up of insurance companies shall to the exclusion of any other law inconsistent therewith and subject to such modification as may be prescribed, apply to the winding up of a co operative society allowed to transact the business of an insurer under this section as if it were an insurance company; but save as hereinbefore provided, the Insurance Act, 1938 (IV of 1938), shall not apply to any such society.

  • 1
    The word “Authority” was substituted for the word “Government” by section 40 of the Motor Vehicles (Amendment) Act, 1988 (Act No. XXVII of 1988)
  • 2
    The words, comma and figures and brackets “Co operative Societies Ordinance, 1985 (I of 1985)” were substituted for the words, comma and figures and brackets “Co operative Societies Act, 1940 (Bengal Act XXI of 1940) ” by section 40 of the Motor Vehicles (Amendment) Act, 1988 (Act No. XXVII of 1988)
  • 3
    The words “prescribe by rules” were substituted for the word “prescribe” by section 40 of the Motor Vehicles (Amendment) Act, 1988 (Act No. XXVII of 1988)
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