Punjab enforces mandatory motor insurance through digital permit system integration

Public transport operators in Punjab will no longer be able to obtain or renew route permits without valid third-party motor insurance, following the launch of a digitally integrated enforcement system by the Government of Punjab in collaboration with federal regulators and industry stakeholders.

The system connects the province’s vehicle route permit regime with the Motor Insurance Repository maintained by the Central Depository Company (CDC), enabling authorities to verify insurance coverage instantly before permits are issued or renewed.

The initiative was rolled out jointly with the Securities and Exchange Commission of Pakistan (SECP) and the Insurance Association of Pakistan, marking a shift toward technology-based enforcement of compulsory motor insurance requirements.

Officials said the measure is designed to strengthen compliance and ensure that passengers, drivers, and third parties receive financial protection and timely compensation in the event of road accidents.

Authorities highlighted the low level of insurance coverage as a key concern, noting that the national motor insurance database currently contains records for roughly one million insured vehicles, a small fraction of the country’s total vehicle population.

Data presented at the launch showed that Pakistan reported 9,371 road accidents in 2023, resulting in 5,902 deaths and more than 11,000 injuries, underscoring the financial risks faced by road users without adequate insurance coverage.

Officials further cited provincial registration records indicating that approximately 24 million vehicles were registered in Punjab as of March 31, 2024, suggesting a nationwide total of about 40 to 42 million vehicles, which has intensified pressure on regulators to expand mandatory insurance coverage.

The digital rollout was formally announced at a ceremony attended by senior officials from the SECP, the Punjab Transport Authority, and the CDC, along with representatives from insurance companies and transport stakeholders.

Regulators said additional reforms are under consideration, including the introduction of a no-fault compensation mechanism and proposed amendments to the Motor Vehicles Act, 1939, as part of broader efforts to raise insurance penetration from 0.8 percent to 1.5 percent nationwide.