Sindh govt amends motor vehicles law: Third-party insurance made mandatory

ISLAMABAD: 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.

The Securities and Exchange Commission of Pakistan (SECP) has been continuously engaging with provincial governments to strengthen the legal framework and ensure effective enforcement of mandatory motor third-party insurance across the country.

Through this amendment to the Provincial Motor Vehicles Ordinance, 1965, a new Section 67-H 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.

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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 Rs 700,000 in case of death and Rs 500,000 for permanent disability, significantly strengthening protection for road users.

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

To support enforcement and improve transparency, the SECP has operationalized the Motor Insurance Repository (MIR), a centralized electronic database that records motor insurance policies issued by 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. The Commission appreciated the Government of Sindh for implementing this important consumer protection and road safety measure and expressed hope that other provinces will adopt similar steps.

Copyright Business Recorder, 2026