Royal Decree No. 34/94 on the Vehicle Insurance Law

Royal Decree
No. 34/94
On the Issuance of the Vehicle Insurance Law
,We, Qaboos bin Said, Sultan of Oman
After perusal of the Oman Sultani Decree No. 26/1975 promulgating the Law on the Regulation of the Administrative Apparatus of the State and its amendments, The Oman Sultani Decree No. 12/1979 promulgating the Insurance Companies Law and its amendments, The Oman Sultani Decree No. 28/1993 promulgating the Traffic Law, And based on the public interest ,requirements :Issued the following Decree
Article 1: The provisions of the enclosed Law shall apply concerning the insurance of vehicles and
such insurance shall be subject to the provisions of the said Insurance Companies Law without .contradicting the provisions of this Law
Article 2:The Executive President of the Capital Market Authority shall issue the decisions
.necessary for the implementation of this Law
Article 3: Any provision that contradicts the provisions of this Law shall be cancelled
Article 4: This Decree shall be published in the Official Gazette and shall enter into effect on the
.day following a period of four months from the date of publication Issued on: 22 Shawwal 1414H Corresponding to: 3 April 1994 Qaboos bin Said Sultan of Oman
Article 1: In application of the provisions of this Law, the following terms shall have the
:meanings stated beside them, unless the context requires otherwise .President: Executive President of the Capital Market Authority Vehicle: Any vehicle for the transport of passengers or goods, a motorcycle or trailer whether moving mechanically or in any other way (other than using animals) used or intended to be used .on the road within the boundaries of the Sultanate Road: Any land way available for the passage of vehicles anywhere within the boundaries of the .Sultanate Passenger: Any person inside the vehicle within the limits of the number of licensed seats, or getting into or out of the vehicle. Insurer: Insurance company licensed to operate in the .Sultanate Insured: Owner of the vehicle of which the road accidents are covered by the insurer according to

.the provisions of this Law. Any person driving the insured vehicle shall be considered as insured .Family: Parents, spouse and children of the insured Third Party: Every person other than the insured and the like and other than their family .members, even if that person works for the owner of the vehicle .Comprehensive Insurance: Insurance of the body of the vehicle itself with third-party insurance Accident: Everything that occurs due to the vehicle or as a result of its use, scattering, falling, .explosion, fire or theft, even if it is not rolling :Article 2 a- All vehicles shall be insured under third-party insurance according to the provisions of this Law and the rules promulgated by a Decision issued by the President for the regulation of the conclusion thereof. Such insurance shall cover all that occurs to others, including the passengers of the insured vehicle, such as decease, physical injuries, treatment expenses due to the accident as well as material damages occurring to the properties of others (except for the properties held by the insured or the like under trust, custody or possession), and caused by the accidents of the vehicle taking place at the Sultanate and within any other geographical limits agreed to be insured. All vehicles shall be insured to cover the expenses of treatment of the injuries occurring to the insured and the like and their family members because of the accident, according to the provisions of this Law and the rules issued under a decision from the President to regulate the conclusion thereof. The insurance premium shall be determined, in such event, in coordination .with the Capital Market Authority b- The insurer shall not reject an insurance application or insurance renewal of a vehicle subject to the provisions of this Law, as long as the vehicle meets the conditions set forth in the Traffic Law. If the insured wishes to benefit from the provisions of the Law concerning the policies in force at the time of its entry into force, this shall be against an additional premium, provided .that the application is submitted before the occurrence of an accident entailing claim c- This compulsory insurance shall not cover the material damages resulting directly during and because of operating the vehicle in drilling, lifting or in engineering, construction, agricultural, contracting or other similar works. The operating of the vehicle under this paragraph shall not .include the running of the vehicle on the road from and to the operating site
Article 3: 1- This Law shall apply to the insurance policies issued or renewed on the date of its
entry into effect. The insurance policies issued before its entry into effect shall remain valid until they are renewed. The President may issue a decision of the unified forms that the insurance companies shall follow upon issuance of the insurance policies and their annexes as well as the .application, certificate and notification of this insurance according to the provisions of the Law The insured shall have the right to amend the insurance premiums according to any legislation -2 that increases its obligations in the valid policies before their renewal
Article 4: The vehicles' registration authority at the Royal Oman Police shall not register any
vehicle subject to the provisions of this Law, renew the registration thereof, license its operating or conduct any other transaction, unless the owner thereof submits an insurance policy that is valid throughout the validity period of the licence according to the provisions of this Law and the .above-mentioned Insurance Companies Law
Article 5: a- The insurer and the insured shall not cancel the compulsory insurance of the vehicle
according to the provisions of this Law throughout its validity period, as long as the licence of the vehicle is valid. Such cancellation, if it occurs, shall not entail any effect. With the exception of the condition of submittal of a new insurance policy "or certificate" for the remaining validity .period of such insurance

b- If the period of compulsory insurance of the vehicle expires, the owner thereof shall be alone liable for any claim against the vehicle resulting from an accident occurring during the period of .interruption of the insurance
Article 6: If the vehicle was sold before expiry of the insurance period, and without prejudice to
the provision of paragraph (b) of the previous Article, the original insured and insurer shall remain liable for any claim from others against the vehicle. If the insurance is comprehensive, the original insurer shall remain liable for the compensation for any material damages incurred because of traffic accidents under this Law, until the name of the new owner is notified to the .vehicles registration authority at the Royal Oman Police
Article 7: If the investigations prove that the liability for the occurrence of a traffic accident is
shared between two or more vehicles, the person injured physically and the heirs of the deceased third party because of such accident shall have the right to obtain the amounts ruled by the Courts of the Sultanate from the insurers of all the vehicles sharing the liability for the accident, each according to the rate of liability for the insured vehicle. In all events, if the investigations do not determine the rates of error of the vehicles sharing liability for the .accident, the liability shall be considered distributed evenly between them
Article 8: The Chairman of the Board of the Capital Market Authority may - after the consent of
the Cabinet - issue a decision to establish a security fund to assist the persons injured physically and the heirs of the deceased and to compensate for the material damages occurring during the vehicles' accidents in case the vehicle causing the accident is not known. The decision issued in this regard shall regulate the work rules of the fund, the funding sources thereof, the rates or amounts borne by each source, the rules of disbursement of assistance as well as the conditions .and exceptions to be available upon the coverage of the above-mentioned accidents The Chairman of the Authority may add other cases to be covered by the fund assistance after .obtaining the consent of the Cabinet :Article 9: The President may determine by a decision issued by him a- The minimum benefits and conditions to be met in the optional insurance on the insured and the like as well as their families against physical injuries and death occurred because of their vehicles' accidents. The insurance companies shall offer the conclusion of such insurance on the insurance claimants of the vehicles, even if it is not comprehensive insurance, and the companies shall show the benefits and conditions of optional insurance, without prejudice to the minimum limits set forth in each of the request of the vehicles' insurance policy, as well as a proof of the selection of the insured in this regard in each of .the insurance certificate, notice and policy b- The bases of evaluation and settlement of compensation for the physical damages occurring to the vehicles because of traffic accidents and the liabilities of the insurers concerned with such compensation and the distribution of the latter to the entitled parties. The provisions of this paragraph applies in particular to the damages occurring to the vehicles proved to be sharing the liability for the occurrence of a traffic accident and the .damages occurring to the vehicles sold by instalments
Article 9 Bis: The vehicles cancelled as a result of an accident shall be evaluated by specialised
companies exercising this activity by virtue of licences issued by the Capital Market Authority .according to the regulations issued in this regard
Article 10: The Authority for Settlement of Commercial Disputes shall resolve the lawsuits arising
.from the application and interpretation of this Law
Article 11: a- The insured shall not submit or accept any offer of compensation for the damaged
without the written consent of the insurer. Any settlement between the insured and the .damaged shall not be valid towards the insurer if it was conducted without the latter's consent

b- The person injured by an accident covered by insurance according to the provisions of this Law may involve the insurer in his lawsuit of claim of compensation before any Court or judicial authority. The involvement shall be through an announcement, including, in particular, the date of the accident, name of the causer of accident, vehicle's documents, .number and validity period of the insurance policy The insurer shall not be compelled to pay any amounts ruled by the Courts as compensation .unless it was involved in the lawsuit within the provisions of this Law and the insurance policy
Article 12: a- If the person injured by an accident dies because of the same accident, by virtue of
an approved medical certificate, within six months from the date of the accident, and he was compensated for his injury at an amount less than the death compensation, his heirs shall be entitled to obtain the remaining amount for the death compensation. If the injury compensation is equivalent to or exceeds the death compensation, the compensation paid for the injury shall .be considered as death compensation b- The injured person and the heirs of the deceased person due to an accident shall have the right to combine the compensation imposed by law and any other amounts due to the same injured or deceased by virtue of optional insurance policies or contracts concluded and covering .his physical injury or death because of accidents c- Without prejudice to the provisions of this Law, the liability of the insurer towards others for .the death and physical injuries shall be limited to the whole amount ruled by the Courts
Article 13: The person injured by an accident may file a direct lawsuit against the insurer and the
defence that the insurer may adhere to against the insured shall not be valid against the injured
Article 14: The insurer shall, within the limits of the payments made to the injured, replace the
latter in his rights against the person liable for the occurrence of accident who is not authorised .to drive the vehicle
Article 15: Without prejudice to the obligation of the insurer - in all cases - to pay the due
compensation (according to the provisions of this Law) to the third party for the physical injuries, death or materials damages occurring to the properties thereof, the insurer shall have the right to refrain from payment as per this obligation for the insured and / or the like, and shall refrain from compensating them for physical injuries occurring to them or their family members (in case the vehicle's insurance policy covers these injuries) or the material damages occurring to the :insured vehicle (in case of comprehensive insurance), in the following cases a- If it was proved that the insurance was based on false statements made by the insured or in case the latter hides essential facts that would affect the acceptance of the risk coverage .by the company, the insurance price or conditions b- If the accident is caused by the use of the vehicle for a purpose other than the licensed purpose, or in a race, competition or speed tests. If the number of passengers exceeded the allowed number, the cargo exceeded the limits, was not well bundled or it exceeded the .allowed limits of length, width or height c- If the driver of the vehicle, whether the insured or any other person driving the vehicle with the consent of the insured, does not hold a valid driving licence for the type of vehicle, without the licence being withdrawn by virtue of an order issued by the competent .authorities, or the driver was under the effects of alcohol or drugs d- If it was proved that the accident, decease or physical injury was caused by an act committed intentionally by the insured. The right of referral to the insurer according to the provisions of this Article shall not entail any prejudice to the right of the person damaged .by the insured
Article 16: a- The lawsuits arising from the application of this Law shall not be heard after expiry

of a period of two years from the date of occurrence of the incident regarding which the lawsuit was filed. However, in case of hiding substantial data related to the insured risk or submitting incorrect data, the said prescription period shall start from the date of knowledge of the person .of interest in filing the lawsuit of the hidden or incorrect data b- The said prescription shall be ended by a registered letter or by handing over the documents .related to the claim to the concerned insurer within the period set forth in this paragraph
Article 17: a- Every insurance policy violating the provisions of this Law, the regulations,
decisions or orders issued pursuant thereto shall be punished by a fine not less than (5,000) five .thousand Omani Riyals and not exceeding (60,000) sixty thousand Omani Riyals b- If the same violation was repeated by the same insurance policy, the Executive President may prevent it temporarily for a period not exceeding one year, from exercising the activities of .vehicle insurance set forth in Article 1 (paragraph 1/e) of the said Insurance Companies Law The imposition of both penalties set forth in the previous paragraphs shall be by a justified decision from the Executive President after the written notification of the violating company to .submit its defence in writing within two weeks from the date of receiving the notification
Article 18: The Board of Directors of the Capital Market Authority may reconcile in the crimes
stipulated by this Law, the regulations, decisions or orders issued pursuant thereto, in any status of public lawsuit and before issuance of a judgment of the same, against an amount of money not less than double the minimum limit of the fine and not exceeding the maximum limit of the fine decided for this crime. The reconciliation shall entail the expiry of the public lawsuit in the .crime