The National Insurance Commission, NIC, says it is seeking a review of the portion of the Motor Insurance Act, 1958, which exempts government registered vehicles from buying insurance policies.
The Act stipulates that all vehicles must be covered for unlimited bodily injury and death compensation to third parties, such as fare paying passengers and pedestrians.
According to the Commission, the Act in its current form, does not offer adequate protection to persons who may suffer damages when they’re hit by state-owned vehicles, hence the need for the review to make it compulsory for government agencies to insure all their vehicles.
The Head of Supervision at the NIC, Seth Eshun, told Citi Business News this is just one of the many changes the Commission is working on introducing in the new Insurance Bill.
“There’s always this idea that the government can always self-insure. Government as it’s is now has the most funds so you can say that the government will be able to self-insure and give the requisite protection. It is the same idea that says that if you have more than 200 thousand cedis there you can basically give it to the Auditor General and because you have given that money to the Auditor General you don’t need to buy an insurance, so that is a form of self-insurance and that is the understanding.”
What we are seeking to do is to say that there is a risk. The kind of processes that Ghanaians have to go through to get compensation is not very straight if they are hit. I have suffered a police car hitting me and I knew what I had to go through to get in order to get my car fixed. So basically, all that this is saying is that, we want to make the process better, so one of the things is that after we have discussed with our lawyers and the people advising us, it was advised that instead of changing that in our current Act, we should rather seek to update the Motor Law and 1958,” he said.
The NIC says it would be in government’s interest if it accepts the review since it will save the country some money than the system that exists currently.
“The Motor law is owned by the Ministry of Transport and the Police. But we are mainly in the insurance sector so you don’t want to as it were take powers from them. So, we will finish our Act and then we will start the work with the Police and the Ministry of Transport. We have to make our case, we have to show the pros and cons of that decision and then government will take a decision based on it. Because there are a lot of cars if you go to some Ministries which could have easily been repaired if there was some insurance, so it is about us making our case,’ he said.
The Motor Insurance Database
In its quest to provide a centralized system from which security agencies and the general public including passengers of vehicles can check the validity of a vehicle insurance instantaneously, the NIC introduced the Motor Insurance Database, MID.
This was implemented on January 1, 2020, and the ultimate aim is to completely eliminate the phenomenon of fake insurance stickers.
Currently, the National Insurance Commission says it has already issued half a million motor insurance stickers using the MID.