MOTOR VEHICLES (THIRD-PARTY RISKS AND COMPENSATION) (AMENDMENT) BILL

Order for Second Reading read. 3.58 p.m.

The Minister for Communications and Acting Minister for Culture (Mr Ong Teng Cheong): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The purpose of the Bill is to require motorists to have insurance cover for liability to their passengers.

Under the present Motor Vehicles (Third-Party Risks and Compensation) Act, it is mandatory for all motorists to take out an insurance policy against liability for death or injury caused to third parties. Motorists are, however, not required to insure against passenger liability unless the passengers are employees or ride on public transport.

Since 1974, passengers carried under car pool arrangements for the purpose of entering the CBD have been covered voluntarily by insurers as a gesture of their support for the scheme. But all other passengers, including family members and casual passengers of car owners and pillion riders are excluded. Car owners may pay an additional premium of $25 to cover their passengers. But since it is not compulsory to do so, not all car passengers are covered by insurance. On the other hand, motor-cyclists are not able to obtain passenger insurance even if they wanted to because insurers find there is insufficient spread of risk if passenger insurance is sold to the few motor-cyclists who volunteer to have it.

The number of passenger casualties who have been unable to claim compensation due to lack of insurance is not available. However, the absence of passenger insurance cover means that not only the negligent driver and his victim but also their families will suffer financial hardship in an unfortunate accident.

With an increase in our total motor vehicle population which grew by 21% between 1975 and 1979, there has also been an increase in the number of road casualties. Records from the Traffic Police Accident Unit show that the total number of casualties per 100,000 population has increased from 457.3 in 1974 to 569.6 in 1979. Total casualties per 10,000 vehicles increased from 366.5 to 397.3 for the same period. We will have to step up our road safety programmes but we must also ensure that accident victims are adequately covered by insurance so that they will be adequately compensated and do not become a burden to society.

I therefore propose to amend the existing Act to make it mandatory for all users of motor vehicles to take out insurance policies to cover liability to passengers. A provision has also been included in the Bill to ensure that the person using a motor vehicle does not avoid liability by making an arrangement with his passenger to negate or restrict his liability.

Additional premium will have to be paid by all motorists in order to have the benefit of passenger insurance. Premium rates are expected to be increased by 25% of the present rate charged for third party insurance or about $15 extra a year on average.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Ong Teng Cheong].

Bill considered in Committee; reported without amendment; read a Third time and passed.