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Chinamasa against Road Accident Fund
28 Jun 2017 at 14:09hrs | Views
Finance minister Patrick Chinamasa said he is against the establishment of a Road Accident Fund (RAF), aimed at assisting road accident victims, as it will negatively affect insurance firms' revenues and burden taxpayers.
This comes as Transport minister Joram Gumbo has been pushing for the setting up of a RAF - in line with the United Nations Decade of Road Safety action plan - and his ministry has been holding various consultative meetings across the country.
Gumbo's initiative was borne out of the realisation that third party insurance, one avenue to compensate road accident victims, was not playing its part due to the proliferation of fake insurance policies.
Chinamasa, however, said there was need for insurance firms to uphold the greatest level of professionalism and be guided by principles of good governance in the management of insurance funds.
"There's a perception that insurance companies don't want to accept liability and we need to understand and engage those who are advocating for the establishment of the Road Accident Fund and close that perception gap," he said.
"I have been advised that you run pools at the Insurance Council of Zimbabwe to cater for hazardous risks that your individual members are not prepared to underwrite. We want to see all those initiatives benefiting the insuring public through prompt payment of claims and all such liabilities being met to the satisfaction of the policy holders," Chinamasa told insurance players in Harare on Monday.
According to official statistics, Zimbabwe experiences about 1 700 fatalities annually with over 30 000 people getting injured in road accidents.
In most cases, the government ends up compensating the bereaved cases due to lack of proper insurance cover and insurance firms' refusal to pay claims.
"It is really such attitudes that can give rise to some of the initiatives that I think are not in the right direction like the establishment of insurance road fund. That basically is reflecting that all is not well in the insurance sector and we need to put our house together, our act together, so that we are seen to honour our obligations," Chinamasa said.
Zimbabwe is the only country in the Southern African Development Community region without a Road Accident Fund to compensate road traffic accident victims.
Market experts also agree with Chinamasa asserting that not only will the RAF add extra burden on the taxpayers, but also that the funds will not reach the intended persons as evidenced by the failure of the Road Fund to refurbish the country's roads.
This comes as Transport minister Joram Gumbo has been pushing for the setting up of a RAF - in line with the United Nations Decade of Road Safety action plan - and his ministry has been holding various consultative meetings across the country.
Gumbo's initiative was borne out of the realisation that third party insurance, one avenue to compensate road accident victims, was not playing its part due to the proliferation of fake insurance policies.
Chinamasa, however, said there was need for insurance firms to uphold the greatest level of professionalism and be guided by principles of good governance in the management of insurance funds.
"There's a perception that insurance companies don't want to accept liability and we need to understand and engage those who are advocating for the establishment of the Road Accident Fund and close that perception gap," he said.
"I have been advised that you run pools at the Insurance Council of Zimbabwe to cater for hazardous risks that your individual members are not prepared to underwrite. We want to see all those initiatives benefiting the insuring public through prompt payment of claims and all such liabilities being met to the satisfaction of the policy holders," Chinamasa told insurance players in Harare on Monday.
In most cases, the government ends up compensating the bereaved cases due to lack of proper insurance cover and insurance firms' refusal to pay claims.
"It is really such attitudes that can give rise to some of the initiatives that I think are not in the right direction like the establishment of insurance road fund. That basically is reflecting that all is not well in the insurance sector and we need to put our house together, our act together, so that we are seen to honour our obligations," Chinamasa said.
Zimbabwe is the only country in the Southern African Development Community region without a Road Accident Fund to compensate road traffic accident victims.
Market experts also agree with Chinamasa asserting that not only will the RAF add extra burden on the taxpayers, but also that the funds will not reach the intended persons as evidenced by the failure of the Road Fund to refurbish the country's roads.
Source - dailynews
