The Government of Sindh has introduced amendments to the Motor Vehicles legal framework through the Motor Vehicles (Amendment) Act, 2026, making third party liability insurance compulsory for all vehicles registered within the province. The reform is designed to strengthen financial protection mechanisms for individuals affected by road accidents and to ensure that compensation for damages, injuries, or fatalities can be addressed through an established insurance system.
According to an official statement released on Saturday, the Securities and Exchange Commission of Pakistan (SECP) has been actively engaging with provincial administrations across the country to expand the legal structure governing mandatory motor insurance. The objective of this coordination has been to build stronger enforcement mechanisms and ensure that third party motor insurance becomes a standard requirement within Pakistan’s vehicle regulatory ecosystem. Under the amendment to the Provincial Motor Vehicles Ordinance of 1965, a new provision titled Section 67-H has been introduced. The new section establishes third party liability insurance as a compulsory requirement for motor vehicles operating within Sindh. The revised framework links vehicle ownership and regulatory compliance directly to insurance coverage, significantly changing the administrative process around vehicle registration and taxation.
According to the updated rules, vehicles will no longer be eligible for registration or ownership transfer without valid third party liability insurance coverage. In addition, vehicle owners will also be required to maintain an active insurance policy in order to pay their annual token tax. The change effectively embeds insurance verification within the province’s vehicle regulatory processes, ensuring that motorists maintain minimum financial protection standards before being allowed to legally operate their vehicles.
Third party motor insurance represents one of the most basic and accessible forms of insurance protection. The policy primarily covers legal liabilities arising from road accidents where damage is caused to another individual’s property or when injuries or fatalities occur involving third parties. By mandating such coverage, the provincial government aims to provide a structured safety net for accident victims who often face financial challenges in securing compensation. The amendment also establishes defined compensation thresholds that will be applied under a no-fault structure, enabling faster financial relief for victims and their families. According to the provisions introduced under the law, compensation of Rs700,000 will be provided in cases where a road accident results in death, while Rs500,000 will be allocated in situations involving permanent disability.
With this legislative development, Sindh has become the first province in Pakistan to formally implement and enforce mandatory third party liability insurance through a strengthened regulatory framework tied directly to vehicle registration systems. Policymakers expect the move to significantly improve the financial security available to accident victims while also encouraging greater compliance among vehicle owners.
Supporting the implementation of the reform is a digital infrastructure developed by the Securities and Exchange Commission of Pakistan. The regulator has operationalised the Motor Insurance Repository, commonly referred to as MIR, which serves as a centralized electronic database containing records of motor insurance policies issued by insurers registered with the commission. The repository enables authorities to digitally verify the authenticity and validity of insurance policies, ensuring that only vehicles with legitimate coverage are allowed to complete regulatory processes such as registration or tax payments. The digital verification system also aims to reduce fraudulent documentation and improve transparency across the insurance ecosystem.
Beyond Sindh, the SECP is also working with transport authorities in other provinces to expand the use of the Motor Insurance Repository. The regulator has initiated collaboration with the Punjab Provincial Transport Authority to integrate the vehicle route permit framework with the MIR system, allowing online verification of insurance policies before permits are issued.
These efforts reflect a broader shift toward digitized compliance systems within Pakistan’s insurance and transport sectors. By linking regulatory processes with digital insurance verification platforms, authorities aim to improve enforcement, streamline administrative procedures, and strengthen financial protection for road users across the country.
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