Road Transport Act 1987 [Act 333]

Part IV   cite [+]

PROVISIONS AGAINST THIRD PARTY RISKS ARISING OUT OF THE USE OF MOTOR VEHICLES

89 Interpretation   cite [+]

In this Part, unless the context otherwise requires-

"authorized insurer" means a person lawfully carrying on motor vehicle insurance business in Malaysia who is a member of the Motor Insurers' Bureau;

"Motor Insurers' Bureau" means the Motor Insurers' Bureau which has executed an agreement with the Minister of Transport to secure compensation to third party victims of road accidents in cases where such victims are denied compensation by the absence of insurance or of effective insurance;

"policy of insurance" includes a cover note.

90 Motor vehicle users to be insured against third party risks   cite [+]

(1) Subject to this Part, it shall not be lawful for any person to use or to cause or permit any other person to use, a motor vehicle unless there is in force in relation to the user of the motor vehicle by that person or that other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part.

(2) If a person acts in contravention of this section he shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one thousand ringgit or to imprisonment for a term not exceeding three months or to both and a person convicted of an offence under this section shall, unless the court for special reasons to be specified in the order thinks fit to order otherwise and without prejudice to the power of the court to order a longer period of disqualification, be disqualified from holding or obtaining a driving licence under Part II for a period of twelve months from the date of the conviction.

(3) A person disqualified by virtue of a conviction under this section or of an order made thereunder from holding or obtaining a driving licence shall, for the purposes of Part II, be deemed to be disqualified by virtue of a conviction under the provisions of that Part:
Provided that a person shall not be convicted of an offence against this section if he proves-

(a) that the vehicle did not belong to him and was not in his possession under a contract of hiring or loan;

(b) that he was using such vehicle in the course of his employment; and

(c) that he neither knew, nor had reason to believe, that there was not in force in relation to such user a policy of insurance or such security as complies with the provisions of this Part.


(4) Notwithstanding any written law prescribing a time within which proceedings may be brought before a court, proceedings for an offence under this section may be brought-

(a) within a period of six months from the date of the commission of the alleged offence; or

(b) within a period which exceeds neither three months from the date on which it came to the knowledge of the prosecutor that the offence had been committed nor one year from the date of the commission of the offence, whichever period is the longer.


(5) This section shall not apply-

(a) to a vehicle owned by-

(i) any Government in Malaysia;

(ii) the Government of the Republic of Singapore;

(iii) a Municipality or other local authority approved by the Minister charged with the responsibility for local government except to a public service vehicle, other than an employees vehicle; or

(iv) a public body,


whilst the vehicle is being used for the purpose of any such Government, Municipality or other local authority or public body owning the same;

(b) to any motor vehicle at any time when it is being driven for police purposes by or under the direction of a police officer; or on a journey to or from any place undertaken for salvage purposes pursuant to Part X of the Merchant Shipping Ordinance 1952 [Ord. No. 70 of 1952];

(c) to any motor vehicle at any time when it is being driven by or under the direction of a road transport officer for the purpose of examining or testing the mechanism of the motor vehicle or of testing the ability of a person to control or to drive a motor vehicle in connection with an application for a licence to drive a motor vehicle; or

(d) to a motor vehicle in respect of which the registered owner has deposited with the Accountant General the sum of one hundred and twenty-five thousand ringgit at any time when such motor vehicle is being driven by the registered owner or by his servant in the course of his employment, or is otherwise subject to the control of the registered owner.

91 Requirements in respect of policies   cite [+]

(1) In order to comply with the requirements of this Part, a policy of insurance must be a policy which-

(a) is issued by a person who is an authorized insurer within the meaning of this Part; and

(b) insures such person, or class of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle or land implement drawn thereby on a road:


Provided that such policy shall not be required to cover-

(aa) liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment; or

(bb) except in the case of a motor vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting onto or alighting from the motor vehicle at the time of the occurrence of the event out of which the claims arise; or

(cc) any contractual liability.


(2)

(a) Where any payment is made (whether or not with any admission of liability) by-

(i) an authorized insurer under or in consequence of a policy issued under this Act;

(ii) the owner of a motor vehicle in relation to the user of which a security under section 93 is in force; or

(iii) the owner of a motor vehicle who has made a deposit under paragraph 90(5)(d),

in respect of the death of or bodily injury to any person arising out of the use of a motor vehicle on a road, and the person who has so died or been bodily injured has to the knowledge of the authorized insurer or such owner, as the case may be, received treatment at a hospital, whether as an inpatient or as an outpatient, in respect of the injury so arising, there shall also be paid by the authorized insurer or such owner to such hospital the expenses reasonably incurred by the hospital in affording such treatment, after deducting from such expenses any moneys actually received by the hospital in payment of a specific charge for such treatment:

Provided that the amount to be paid by the authorized insurer or such owner shall not exceed four hundred ringgit for each person so treated as an inpatient or forty ringgit for each person so treated as an outpatient.

(b) For the purposes of this subsection, the expression "hospital" means an institution (not being an institution carried on for profit) which provides medical or surgical treatment for inpatients and the expression "expenses reasonably incurred" means-

(i) in relation to a person who receives treatment at a hospital as an inpatient, an amount for each day such person is maintained in such hospital representing the average daily cost for each inpatient of the maintenance of the hospital and the staff thereof and the maintenance and treatment of the inpatients; provided that in respect of a Government hospital which admits paying patients, "expenses reasonably incurred" means the amount chargeable to a member of the general public, in a ward of the class occupied by the person who received treatment, in accordance with the scale of fees from time to time in force at such hospital; and

(ii) in relation to a person who receives treatment at a hospital as an outpatient, reasonable expenses actually incurred.


(3) Notwithstanding anything in any written law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or class of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or class of persons.

(4) A policy shall be of no effect for the purposes of this Part unless and until there is delivered by the insurer to the person by whom the policy is effected a certificate (in this Act referred to as a "certificate of insurance") in the prescribed form and containing such particulars of any conditions subject to which the policy is issued and of any other matters as may be prescribed, and different forms and different particulars may be prescribed in relation to different cases or circumstances.

92 Furnishing of returns and information by insurers   cite [+]

The Minister may require any authorized insurer to furnish such returns and information relating to the motor vehicle insurance business carried on by the insurer as the Minister may require.

93 Requirements in respect of securities   cite [+]

(1) In order to comply with the requirements of this Part, a security must-

(a) be given either by an authorized insurer or by some body of persons approved by the Minister after consultation with the Minister of Finance, which carries on in Malaysia the business of giving securities of a like kind; and

(b) consist of an undertaking by the giver of the security to make good, subject to any conditions specified therein and up to an amount, in the case of an undertaking relating to the use of public service vehicles, of not less than two hundred and twenty-five thousand ringgit, and in any other case, of not less than forty thousand ringgit, any failure by the owner of the vehicle or such other person or class of persons as may be specified in the security to discharge any such liability as is required to be covered by a policy of insurance under section 91 which may be incurred by him or by them.


(2) A security shall be of no effect for the purpose of this Part unless there is issued by the person giving the security to the person to whom it is given a certificate (in this Act referred to as a "certificate of security") in the prescribed form and containing such particulars of any conditions subject to which the security is issued and of any other matters as may be prescribed, and different forms and different particulars may be prescribed in relation to different cases or circumstances.

94 Certain conditions in policies or securities to be of no effect   cite [+]

Any condition in a policy or security issued or given for the purposes of this Part providing that no liability shall arise under the policy or security or that any liability so arising shall cease in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy or security shall be of no effect in connection with such claims as are mentioned in paragraph 91(1)(b):

Provided that nothing in this section shall be taken to render void any provision in a policy or security requiring the person insured or secured to repay to the insurer or the giver of the security any sums which the latter may have become liable to pay under the policy or security and which have been applied to the satisfaction of the claims of third parties.

95 Avoidance of restrictions on scope of third party risks policies   cite [+]

Where a certificate of insurance has been delivered under subsection 91(4) to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured by reference to any of the following matters:

(a) the age or physical or mental condition of persons driving the motor vehicle;

(b) the condition of the motor vehicle;

(c) the number of persons that the motor vehicle carries;

(d) the weight or physical characteristics of the goods that the motor vehicle carries;

(e) the times at which or the areas within which the motor vehicle is used;

(f) the horsepower or value of the motor vehicle;

(g) the carriage on the motor vehicle of any particular apparatus;

(h) the carriage on the motor vehicle of any particular means of identification other than any means of identification required to be carried under Part II;

(i) the driver of the motor vehicle at the time of the accident being under the influence of intoxicating liquor or of a drug;

(j) the driver of the motor vehicle at the time of the accident not holding a licence to drive or not holding a licence to drive the particular motor vehicle;

(k) the motor vehicle being used for a purpose other than the purpose stated in the policy,


shall, as respects such liabilities as are required to be covered by a policy under paragraph 91(1)(b), be of no effect:

Provided that nothing in this section shall require an insurer to pay any sum in respect of the liability of any person otherwise than in or towards the discharge of that liability, and any sum paid by an insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this section shall be recoverable by the insurer from that person.

96 Duty of insurers to satisfy judgements against persons insured in respect of third party risks   cite [+]

(1) If, after a certificate of insurance has been delivered under subsection 91(4) to the person by whom a policy has been effected, judgement in respect of any such liability as is required to be covered by a policy under paragraph 91(1)(b) (being a liability covered by the terms of the policy) is given against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the policy, the insurer shall, subject to this section, pay to the persons entitled to the benefit of the judgement any sum payable in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any written law relating to interest on judgements.

(2) No sum shall be payable by an insurer under subsection (1)-

(a) in respect of any judgement, unless before or within seven days after the commencement of the proceedings in which the judgement was given, the insurer had notice of the proceedings;

(b) in respect of any judgement, so long as execution is stayed pending an appeal; or

(c) in connection with any liability, if before the happening of the event which was the cause of the death or bodily injury giving rise to the liability the policy was cancelled by mutual consent or by virtue of any provision contained therein and either-

(i) before the happening of the said event the certificate was surrendered to the insurer or the person to whom the certificate was delivered made a statutory declaration stating that the certificate had been lost or destroyed;

(ii) after the happening of the said event, but before the expiration of a period of fourteen days from the taking effect of the cancellation of the policy, the certificate was surrendered to the insurer or the person to whom the certificate was delivered made such a statutory declaration as aforesaid; or

(iii) either before or after the happening of the said event, but within the said period of fourteen days, the insurer has commenced proceedings under this Part in respect of the failure to surrender the certificate.


(3) No sum shall be payable by an insurer under subsection (1) if before the date the liability was incurred, the insurer had obtained a declaration from a court that the insurance was void or unenforceable:

Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not become entitled to the benefit of this subsection as respects any judgement obtained in proceedings commenced before the commencement of that action unless, before or within seven days after the commencement of that action, he has given notice to the person who is the plaintiff in the said proceedings specifying the grounds on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled if he thinks fit to be made a party thereto.

(4) If the amount which an insurer becomes liable under this section to pay in respect of a liability of a person insured by a policy exceeds the amount for which he would, apart from this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.

(5) In this section, the expression "material" means of such a nature as to influence the judgement of a prudent insurer in determining whether he will take the risks, and if so at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

(6) In this Part, reference to a certificate of insurance in any provision relating to the surrender or the loss or destruction of a certificate of insurance shall, in relation to policies under which more than one certificate is issued, be construed as references to all the certificates and shall, where any copy has been issued of any certificate, be construed as including a reference to that copy.

97 Rights of third parties against insurers   cite [+]

(1) Where under any policy issued for the purposes of this Part, a person (hereinafter referred to as "the insured") is insured against liabilities to third parties which he may incur then-

(a) in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or

(b) in the case of the insured being a company, in the event of a winding-up order being made or a resolution for a voluntary winding-up being passed with respect to the company or of a receiver or manager of the company's business or undertaking being appointed or of possession being taken by or on behalf of the holders of any debentures secured by a floating charge on any property comprised in or subject to the charge,


if either before or after that event any such liability as aforesaid is incurred by the insured, his rights against the insurer under the policy in respect of the liability shall, notwithstanding anything in any written law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred.

(2) Where an order is made under any written law relating to bankruptcy for the administration in bankruptcy of the estate of a deceased debtor then if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a policy issued for the purposes of this Part as being a liability to a third party, the deceased debtor's rights against the insurer under the policy in respect of that liability shall, notwithstanding anything in any such law expressed, be transferred to and vest in the person to whom the debt is owing.

(3) Any condition in a policy issued for the purposes of this Part purporting directly or indirectly to avoid the policy or to alter the rights of the party thereunder upon the happening to the insured of any of the events specified in paragraph (1)(a) or (b) or upon the making of an order under any written law relating to bankruptcy in respect of his estate, shall be of no effect.

(4) Upon a transfer of rights under subsection (1) or (2), the insurer shall, subject to the provisions of section 99, be under the same liability to the third party as he would have been under to the insured but-

(a) if the liability of the insurer to the insured exceeds the liability of the insured to the third party, nothing in this Act shall affect the rights of the insured against the insurer in respect of the excess; and

(b) if the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this Act shall affect the rights of the third party against the insured in respect of the balance.


(5) For the purposes of this section and sections 98 and 99, the expression "liabilities to third parties" in relation to a person insured under any policy of insurance shall not include any liability of that person in the capacity of insurer under some other policy of insurance.

(6) This section and sections 98 and 99 shall not apply-

(a) where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company; or

(b) to any case to which subsections 21(1) and (2) of the Workmen's Compensation Act 1952 [Act 273], apply.

98 Duty to give necessary information to third parties   cite [+]

(1) Any person against whom a claim is made in respect of any such liability as is required to be covered by a policy under paragraph 91(1)(b) shall, on demand by or on behalf of the person making the claim, state whether or not he was insured in respect of that liability by any policy having effect for the purposes of this Part or would have been so insured if the insurer had not avoided or cancelled the policy and, if he was or would have been so insured, give such particulars with respect to that policy as were specified in the certificate of insurance delivered in respect thereof under subsection 91(4).

(2) In the event of any person becoming bankrupt or making a composition or arrangement with his creditors or in the event of an order being made under any law relating to bankruptcy in respect of the estate of any person or in the event of a winding up order being made or a resolution for a voluntary winding-up being passed with respect to any company or of a receiver or manager of the company's business or undertaking being appointed or of possession being taken by or on behalf of the holders of any debentures secured by a floating charge, on any property comprised in or subject to the charge it shall be the duty of the bankrupt debtor, personal representative of the deceased debtor or company and, as the case may be, of the Director General of Insolvency, trustee, liquidator, receiver or manager or person in possession of the property to give, at the request of any person claiming that the bankrupt debtor, deceased debtor or company is under a liability to him, such information as may reasonably be required by him for the purpose of ascertaining whether any rights have been transferred to and vested in him under this Act and for the purpose of enforcing such rights, if any, and any contract of insurance in so far as it purports whether directly or indirectly to avoid the contract or to alter the rights of the parties thereunder upon the giving of any such information in the events aforesaid or otherwise to prohibit or prevent the giving thereof in the said events shall be of no effect.

(3) If the information given to any person in pursuance of subsection (2) discloses reasonable ground for supposing that there have or may have been transferred to him under this Act rights against any particular insurer that insurer shall be subject to the same duty as is imposed by the said subsection on the persons therein mentioned.

(4) The duty to give information imposed by this section shall include a duty to allow all contracts of insurance, receipts for premiums and other relevant documents in the possession or power of the person on whom the duty is so imposed to be inspected and copies thereof to be taken.

(5) If without reasonable excuse any person fails to comply with this section or wilfully makes any false or misleading statement in reply to any such demand as aforesaid he shall be guilty of an offence.


Important Notice: Legislation from this website is not a copy of the Gazette printed by the Government Printer, Percetakan Nasional Malaysia Berhad, for the purposes of section 61 of the Interpretation Acts 1948 and 1967 [Act 388] and does not constitute prima facie evidence of the contents of the Gazette by virtue of the section.

SEARCH LEGISLATION
Title:


Number: