LAWS OF MALAYSIA

ONLINE VERSION OF UPDATED

TEXT OF REPRINT

Act 333

ROAD TRANSPORT ACT 1987

As at 1 February 2013
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whilst the vehicle is being used for the purpose of any such
Government, Municipality or other local authority or public
body owning the same;

(b) to any motor vehicle at any time when it is being driven

for police purposes by or under the direction of a police
officer; or on a journey to or from any place undertaken
for salvage purposes pursuant to Part X of the Merchant
Shipping Ordinance 1952 [Ord. No. 70 of 1952];

(c) to any motor vehicle at any time when it is being driven

by or under the direction of a road transport officer for the
purpose of examining or testing the mechanism of the
motor vehicle or of testing the ability of a person to
control or to drive a motor vehicle in connection with an
application for a licence to drive a motor vehicle; or

(d) to a motor vehicle in respect of which the registered

owner has deposited with the Accountant General the sum
of one hundred and twenty-five thousand ringgit at any
time when such motor vehicle is being driven by the
registered owner or by his servant in the course of his
employment, or is otherwise subject to the control of the
registered owner.

Requirements in respect of policies

91. (1) In order to comply with the requirements of this Part, a policy
of insurance must be a policy which—

(a) is issued by a person who is an authorized insurer within

the meaning of this Part; and

(b) insures such person, or class of persons as may be

specified in the policy in respect of any liability which
may be incurred by him or them in respect of the death of
or bodily injury to any person caused by or arising out of
the use of the motor vehicle or land implement drawn
thereby on a road:
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Provided that such policy shall not be required to cover—

(aa) liability in respect of the death arising out of and in the

course of his employment of a person in the
employment of a person insured by the policy or of
bodily injury sustained by such a person arising out of
and in the course of his employment; or

(bb) except in the case of a motor vehicle in which

passengers are carried for hire or reward or by reason of
or in pursuance of a contract of employment, liability in
respect of the death of or bodily injury to persons being
carried in or upon or entering or getting onto or
alighting from the motor vehicle at the time of the
occurrence of the event out of which the claims arise; or

(cc) any contractual liability.

(2) (a) Where any payment is made (whether or not with any
admission of liability) by—

(i) an authorized insurer under or in consequence of a policy

issued under this Act;

(ii) the owner of a motor vehicle in relation to the user of

which a security under section 93 is in force; or

(iii) the owner of a motor vehicle who has made a deposit

under paragraph 90(5)(d),

in respect of the death of or bodily injury to any person arising out of

the use of a motor vehicle on a road, and the person who has so died
or been bodily injured has to the knowledge of the authorized insurer
or such owner, as the case may be, received treatment at a hospital,
whether as an inpatient or as an outpatient, in respect of the injury so
arising, there shall also be paid by the authorized insurer or such
owner to such hospital the expenses reasonably incurred by the
hospital in affording such treatment, after deducting from such
expenses any moneys actually received by the hospital in payment of
a specific charge for such treatment:
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Provided that the amount to be paid by the authorized insurer or

such owner shall not exceed four hundred ringgit for each person so
treated as an inpatient or forty ringgit for each person so treated as an
outpatient.

(b) For the purposes of this subsection, the expression ―hospital‖

means an institution (not being an institution carried on for profit)
which provides medical or surgical treatment for inpatients and the
expression ―expenses reasonably incurred‖ means—

(i) in relation to a person who receives treatment at a hospital

as an inpatient, an amount for each day such person is
maintained in such hospital representing the average daily
cost for each inpatient of the maintenance of the hospital
and the staff thereof and the maintenance and treatment of
the inpatients; provided that in respect of a Government
hospital which admits paying patients, ―expenses
reasonably incurred‖ means the amount chargeable to a
member of the general public, in a ward of the class
occupied by the person who received treatment, in
accordance with the scale of fees from time to time in
force at such hospital; and

(ii) in relation to a person who receives treatment at a hospital

as an outpatient, reasonable expenses actually incurred.

(3) Notwithstanding anything in any written law, a person issuing a

policy of insurance under this section shall be liable to indemnify the
person or class of persons specified in the policy in respect of any
liability which the policy purports to cover in the case of that person
or class of persons.

(4) A policy shall be of no effect for the purposes of this Part

unless and until there is delivered by the insurer to the person by
whom the policy is effected a certificate (in this Act referred to as a
―certificate of insurance‖) in the prescribed form and containing such
particulars of any conditions subject to which the policy is issued and
of any other matters as may be prescribed, and different forms and
different particulars may be prescribed in relation to different cases or
circumstances.
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Furnishing of returns and information by insurers

92. The Minister may require any authorized insurer to furnish such
returns and information relating to the motor vehicle insurance
business carried on by the insurer as the Minister may require.

Requirements in respect of securities

93. (1) In order to comply with the requirements of this Part, a

security must—

(a) be given either by an authorized insurer or by some body

of persons approved by the Minister after consultation
with the Minister of Finance, which carries on in Malaysia
the business of giving securities of a like kind; and

(b) consist of an undertaking by the giver of the security to

make good, subject to any conditions specified therein and
up to an amount, in the case of an undertaking relating to
the use of public service vehicles, of not less than two
hundred and twenty-five thousand ringgit, and in any
other case, of not less than forty thousand ringgit, any
failure by the owner of the vehicle or such other person or
class of persons as may be specified in the security to
discharge any such liability as is required to be covered by
a policy of insurance under section 91 which may be
incurred by him or by them.

(2) A security shall be of no effect for the purpose of this Part

unless there is issued by the person giving the security to the person
to whom it is given a certificate (in this Act referred to as a
―certificate of security‖) in the prescribed form and containing such
particulars of any conditions subject to which the security is issued
and of any other matters as may be prescribed, and different forms
and different particulars may be prescribed in relation to different
cases or circumstances.
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Certain conditions in policies or securities to be of no effect

94. Any condition in a policy or security issued or given for the

purposes of this Part providing that no liability shall arise under the
policy or security or that any liability so arising shall cease in the
event of some specified thing being done or omitted to be done after
the happening of the event giving rise to a claim under the policy or
security shall be of no effect in connection with such claims as are
mentioned in paragraph 91(1)(b):

Provided that nothing in this section shall be taken to render void

any provision in a policy or security requiring the person insured or
secured to repay to the insurer or the giver of the security any sums
which the latter may have become liable to pay under the policy or
security and which have been applied to the satisfaction of the claims
of third parties.

Avoidance of restrictions on scope of third party risks policies

95. Where a certificate of insurance has been delivered under

subsection 91(4) to the person by whom a policy has been effected,
so much of the policy as purports to restrict the insurance of the
persons insured by reference to any of the following matters:

(a) the age or physical or mental condition of persons driving

the motor vehicle;

(b) the condition of the motor vehicle;

(c) the number of persons that the motor vehicle carries;

(d) the weight or physical characteristics of the goods that the

motor vehicle carries;

(e) the times at which or the areas within which the motor
vehicle is used;

(f) the horsepower or value of the motor vehicle;

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(g) the carriage on the motor vehicle of any particular

apparatus;

(h) the carriage on the motor vehicle of any particular means

of identification other than any means of identification
required to be carried under Part II;

(i) the driver of the motor vehicle at the time of the accident
being under the influence of intoxicating liquor or of a
drug;

(j) the driver of the motor vehicle at the time of the accident
not holding a licence to drive or not holding a licence to
drive the particular motor vehicle;

(k) the motor vehicle being used for a purpose other than the
purpose stated in the policy,

shall, as respects such liabilities as are required to be covered by a

policy under paragraph 91(1)(b), be of no effect:

Provided that nothing in this section shall require an insurer to pay

any sum in respect of the liability of any person otherwise than in or
towards the discharge of that liability, and any sum paid by an insurer
in or towards the discharge of any liability of any person which is
covered by the policy by virtue only of this section shall be
recoverable by the insurer from that person.

Duty of insurers to satisfy judgements against persons insured in

respect of third party risks

96. (1) If, after a certificate of insurance has been delivered under
subsection 91(4) to the person by whom a policy has been effected,
judgement in respect of any such liability as is required to be covered
by a policy under paragraph 91(1)(b) (being a liability covered by the
terms of the policy) is given against any person insured by the policy,
then notwithstanding that the insurer may be entitled to avoid or
cancel, or may have avoided or cancelled the policy, the insurer shall,
subject to this section, pay to the persons entitled to the benefit of the
 Road Transport 149

judgement any sum payable in respect of the liability, including any

amount payable in respect of costs and any sum payable in respect of
interest on that sum by virtue of any written law relating to interest
on judgements.

(2) No sum shall be payable by an insurer under subsection (1)—

(a) in respect of any judgement, unless before or within seven

days after the commencement of the proceedings in which
the judgement was given, the insurer had notice of the
proceedings;

(b) in respect of any judgement, so long as execution is stayed

pending an appeal; or

(c) in connection with any liability, if before the happening of

the event which was the cause of the death or bodily
injury giving rise to the liability the policy was cancelled
by mutual consent or by virtue of any provision contained
therein and either—

(i) before the happening of the said event the

certificate was surrendered to the insurer or the
person to whom the certificate was delivered made
a statutory declaration stating that the certificate
had been lost or destroyed;

(ii) after the happening of the said event, but before

the expiration of a period of fourteen days from the
taking effect of the cancellation of the policy, the
certificate was surrendered to the insurer or the
person to whom the certificate was delivered made
such a statutory declaration as aforesaid; or

(iii) either before or after the happening of the said

event, but within the said period of fourteen days,
the insurer has commenced proceedings under this
Part in respect of the failure to surrender the
certificate.
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(3) No sum shall be payable by an insurer under subsection (1) if

before the date the liability was incurred, the insurer had obtained a
declaration from a court that the insurance was void or
unenforceable:

Provided that an insurer who has obtained such a declaration as

aforesaid in an action shall not become entitled to the benefit of this
subsection as respects any judgement obtained in proceedings
commenced before the commencement of that action unless, before
or within seven days after the commencement of that action, he has
given notice to the person who is the plaintiff in the said proceedings
specifying the grounds on which he proposes to rely, and any person
to whom notice of such an action is so given shall be entitled if he
thinks fit to be made a party thereto.

(4) If the amount which an insurer becomes liable under this

section to pay in respect of a liability of a person insured by a policy
exceeds the amount for which he would, apart from this section, be
liable under the policy in respect of that liability, he shall be entitled
to recover the excess from that person.

(5) In this section, the expression ―material‖ means of such a

nature as to influence the judgement of a prudent insurer in
determining whether he will take the risks, and if so at what premium
and on what conditions, and the expression ―liability covered by the
terms of the policy‖ means a liability but for the fact that the insurer
is entitled to avoid or cancel or has avoided or cancelled the policy.

(6) In this Part, reference to a certificate of insurance in any

provision relating to the surrender or the loss or destruction of a
certificate of insurance shall, in relation to policies under which more
than one certificate is issued, be construed as references to all the
certificates and shall, where any copy has been issued of any
certificate, be construed as including a reference to that copy.