A new report assessing the impact of compulsory third-party vehicle insurance in South Africa is set to be published at the end of the month.
The report, commissioned by The South African Insurance Association (SAIA), will indicate how the introduction of Compulsory Third Party Motor Property Insurance (CTPMPI) will impact road safety and the costs related to the high accident rate in the country.
The Road Accident Fund (RAF) reportedly spends up to R1.5 billion a month covering victims of road accidents in South Africa.
Dawie Buys, manager: Insurance Risks at SAIA, says that in recent years 70% of the total cost of motor claims in SA have been accident related. He said that as few as 35% of vehicles in the country are currently insured.
He said that the SAIA has been advocating for the introduction of Compulsory Third Party Motor Property Insurance for a long time and it is still on top of our members agenda.
He noted that the last Motivation Document was submitted to the Department of Transport (DoT) during 2010, and since then the SAIA had various discussions about this topic with the Financial Services Board (FSB), National Treasury (NT) and agencies of the DoT i.e. The Road Traffic Management Corporation (RTMC) and the Road Traffic Infringement Agency (RTIA).
The association appointed Price Waterhouse Coopers to research the feasibility of the introduction of CTPMPI into South Africa.
“This is currently underway and although we have been provided with an interim briefing document the final report should become available at the end of November 2015,” Buys said.
He said that once all the information has become available the SAIA Task Team will provide a report to the SAIA Board for consideration and approval, “and we hope that this will be done early next year”.
“Thereafter a full proposal will be submitted to Government for their consideration at the highest level.”
“We unfortunately will have no control over the normal legislation process and should Government and ourselves come to some agreement it is difficult to predict how long it will take to enact a law for the introduction of CTPMPI,” Buys said.
The Department of Transport did not respond to emails sent by Business tech.