Report No. 85
Beneficiaries of Compulsory Insurance
4.1. Scope of the Chapter.-
The question of substantive principles of liability having been disposed of, the next question to be considered concerns the persons who can claim the benefit of the provisions of the Act relating to claims enforceable against the insurer. Under section 95(1), proviso, the benefit of the remedy1 conferred by the Act against the insurer is limited to certain categories of persons2.
There are, however, certain minute limitations created by the relevant provisions. An examination thereof reveals that both the contents of the relevant provisions and the manner in which the limitations have been expressed have led to certain practical problems. The fundamental question to be considered is, whether it is in conformity with current notions of social justice to allow the section to be hedged in with many minute limitations, restricting the categories of persons who can avail themselves of the direct remedy conferred on third parties against the insurer.
Section 94 imposes an obligation to insure against third party risk. Section 95(1) provides that the policy must be issued by an authorised insurer or by a co-operative society allowed to transact such business, and must insure the person or classes of persons specified in the policy (subject to the prescribed monetary limits), against the specified liability.
1. Para. 4.2, infra.
2. Contrast the English Law, para. 5.5, infra.