New Delhi: The Supreme Court has on Thursday laid down guidelines on considering compensation to persons.

The apex court has ordered all states to amend Motor Accident Claims Tribunal (MACT) rules to make it mandatory to auction uninsured vehicles involved in an accident and deposit the proceeds to the victim. The SC has directed all the states to implement the rule within 12 weeks. Currently this rule is applicable only in Delhi.

The MACT awards compensation after determining issues like income of the deceased, the deduction to be made towards the personal living expenses of the deceased and the multiplier to be applied with reference to the age of the deceased.

It may be noted that last month, Insurance Regulatory and Development Authority of India (Irdai) made long-term third party insurance policy mandatory following a Supreme Court order for both two and four-wheelers. As per the Motor Vehicles Act, third-party insurance is mandatory.

As per the court order, it is mandatory for all general insurance companies to issue a three-year third party insurance cover for new cars and five-year third party (TP) insurance cover for new two-wheelers as a separate product or as part of a comprehensive insurance product.

Irdai further said that after the introduction of long-term Motor TP arty Insurance, an insured should be given two options -- Long-term package cover offering both Motor TP insurance and own Damage insurance for three years or five years as the case may be or a bundled cover with a 3/5 year term for the TP component and a one-year term for the own damage.

(Reporter inputs Mahesh Gupta, Additional Inputs from PTI)