ISLAMABAD:

The Securities and Exchange Commission of Pakistan (SECP) has backed Sindh in its decision to make third-party liability insurance mandatory for all vehicles registered in the province.

The government of Sindh has formally introduced amendments to the Motor Vehicles (Amendment) Act, 2026, making third-party liability insurance mandatory for all vehicles registered in the province to enhance financial protection for road accident victims.

In a statement, the SECP said that it had been continuously engaging with the provincial governments to strengthen the legal framework and ensure effective enforcement of mandatory third-party motor insurance across the country.

Through this amendment to the Provincial Motor Vehicles Ordinance, 1965, a new Section 67H has been introduced, requiring third-party liability insurance for motor vehicles. Under the revised framework, no vehicle will be registered, transferred or allowed to pay annual token tax without a valid insurance policy covering third-party risks.

Third-party motor insurance is a basic and affordable policy that covers legal liabilities for damage to property, injuries or death caused to another person in an accident.

The amendment also introduces defined compensation limits on a no-fault basis, ensuring timely financial relief to victims or their legal heirs. The compensation includes Rs700,000 in case of death and Rs500,000 for permanent disability, significantly strengthening protection for road users.

With this reform, Sindh has become the first province in Pakistan to effectively enforce mandatory third-party liability motor insurance through a strengthened legal framework.

To support enforcement and improve transparency, the SECP has operationalised the Motor Insurance Repository (MIR), a centralised electronic database that records motor insurance policies issued by the insurers registered with the commission. The system enables digital verification of insurance policies and helps ensure compliance with minimum legal requirements at the time of vehicle registration.

The SECP is also working with the Punjab Provincial Transport Authority to link the vehicle route permit regime with the Motor Insurance Repository for online validation of insurance policies, further strengthening enforcement mechanisms nationwide.