Transcript Slide 1

ISSUES OF ENFORCEMENT
OF MOTOR VEHICLE
INSURANCE POLICY: A
ROAD SAFETY
PERSPECTIVE
A PRESENTATION
BY
OSITA CHIDOKA
AT THE INSURANCE FUTURE SUMMIT,
TRANSCORP HILTON HOTEL, ABUJA
APRIL 7- 8, 2008
PREAMBLE
Due to rapid
Economic growth
in the 70’s & 80’s,
and lack of a Lead
agency in Road Safety,
Nigeria witnessed
an Increase in
Road Traffic
accidents
Federal
Governmen
t
Intervention
FRSC was
established vide
Cap 141 Laws of
the federation as
Amended by the
FRSC Act 2007
FEDERAL ROAD
SAFETY COMMISSION (FRSC)
(1988-2008)
ROAD TRAFFIC CRASHES
IN
NIGERIA
ROAD CRASH RECORDS BETWEEN
1996-2006 (NIGERIA)
FATAL
SERIOUS
MINOR
TOTAL
CASES
NO.
KILLED
NO.
INJURED
TOTAL
CASUALTY
1996
4790
6964
4688
16442
6364
15290
21654
DOWNWARD
1997
4800
7701
4987
17488
6500
10786
17286
DOWNWARD
1998
4757
7081
4300
16138
6538
17341
23879
UPWARD
1999
4621
6888
4356
15865
6795
17728
24523
UPWARD
2000
5287
6820
4499
16606
8473
20677
29150
UPWARD
2001
6966
8185
5379
20530
9946
23249
33195
DOWNWARD
2002
4029
7190
3325
14544
7407
22112
29519
DOWNWARD
2003
3910
7882
2572
14364
6452
18116
24568
DOWNWARD
2004
3275
6948
4051
14274
5351
16897
22248
DOWNWARD
2005
2299
4143
2620
9062
4519
15779
20298
DOWNWARD
2006
2600
5550
964
9114
4944
17390
22334
UPWARD
9132
4916
20944
25860
UPWARD
YEAR
2007
KEY:
UPWARD MOVEMENT OF ROAD CRASH
.
DOWNWARD OR UPWARD
MOVEMENT OF CRASH SEVERITY
DOWNWARD MOVEMENT OF ROAD CRASH
Source: Nigeria Police/Federal Road Safety Commission- 2007
YEARLY COMPARISON OF FATAL,
SERIOUS & TOTAL CASES OF CRASHES
The
9132
2299
4143
2600
6948
There is a rise in
crashes
compared
previous year
2006.This shows
that there is need
for intervention to
check this
upward trend
5550
2003
9114
2002
9062
14274
2001
3275
2000
7882
1999
3910
5287
6820
1998
7190
4621
6888
1997
4029
4757
7081
1996
6966
8185
4800
5000
4790
6964
10000
7701
15000
14364
14544
16606
15865
16138
17488
16442
20000
20530
25000
issues that gave rise to the high incidence of road
carnage in 2001 are what we are determined to
effectively tackle in the 4year Rolling plan under the
Mass Transportation sector. For example, staff morale
was so low in 2001, there was paucity of logistics, and
corporate inertia owing to the then merger with the Police
2004
2005
2006
0
T0TAL CASES
FATAL CASES
2007
SERIOUS CASES
source: Nigeria Police /Federal Road Safety Commission 2007
SOME ALARMING FACTS
• FERMA would need an estimated 70 billion Naira to
rehabilitate 3,500km of road network annually under the
Systematic Road Strengthing and Enhancement
Programme (SRSE)……………Daily independent, Thursday
February, 2008
• The Lagos-Ibadan-Ogbomosho-Ilorin-Jebba-Minna
Expressway in Nigeria is ranked amongst the 23 most
dangerous roads in the World by the Association for Safe
International Road Travel, U.S.A. The road is described as a
congested road with deep potholes and a median in
disrepair that links northern and southern Nigeria.
• There are an estimated 15 million drivers in Nigeria,
however license production by FRSC till date stands at
an estimated 3,686,303…………………. Department of
Motor Vehicle Administration (FRSC, October, 2007)
ROAD TRAFFIC CRASHES (RTCs): THE
SOCIO-ECONOMIC COST
• It is estimated that developing countries currently
loose an estimated $100 billion every year from
Road Traffic Crashes, twice as much as its total
development assistance ……….(The World Bank Group,
www.worldbank.org/transport/roads/safety.htm, Accessed 4th Feb, 2008)
• An estimated 50 million people are injured and 1.2
million die every year from Road Traffic
Crashes….(RTA: Emerging Epidemic, Indian Journal of
Neorotrauma, Vol. 3. No.1, 2006)
• Road traffic Death to increase by 80% in developing
countries by 2020 if adequate measures are not
taken ……….(WHO, World Health Day report, April 2004)
THE INSURANCE INDUSTRY
IN NIGERIA
WHAT IS THE VEHICLE INSURANCE POLICY
•
‘NO PERSON SHALL USE OR CAUSE OR PERMIT ANY OTHER PERSON
TO USE A MOTOR VEHICLE ON A ROAD UNLESS A LIABILITY WHICH HE
MAY THEREBY INCUR IN RESPECT OF DAMAGE TO THE PROPERTY OF
THIRD PARTIES IS ISSUED WITH AN INSURER UNDER THIS ACT.’ Section
68 (1) of the INSURANCE ACT 2003 ACT No.1.
•
THE ABOVE ‘…SHALL COVER LIABILITY OF NOT LESS THAN
N1MILLION)’. Section 68 (2).
•
THE ABOVE ‘…SHALL BE IN ADDITION TO THE LIABILITIES REQUIRED
TO BE INSURED UNDER THE MOTOR VEHICLE (THIRD PARTY)
INSURANCE ACT 1950…’ Section 68 (3).
•
‘A PERSON WHO CONTRAVENES THE PROVISIONS OF THE SECTION
COMMITS AN OFFENCE AND LIABLE ON CONVICTION TO A FINE OF
N250,000 OR IMPRISONMENT FOR 1YEAR OR BOTH’. Section 68 (4).
COMPLIANCE LEVEL OF MOTOR
VEHICLE INSURANCE POLICY
•
MOST DRIVERS DRIVE WITHOUT
INSURANCE PAPERS AND DO
NOT PATRONISE INSURERS
•
MOST PEOPLE DO NOT HAVE
CONFIDENCE IN INSURANCE
CLAIMS
•
SOME DRIVERS DRIVE WITH
EXPIRED INSURANCE PAPERS
•
MOST DRIVERS USE TOUTS TO
OBTAIN FAKE/FORGED
INSURANCE DOCUMENTS
•
COMPLIANCE IS AT A LEVEL OF
NEAR NON-COMPLIANCE
LEVELS OF COMPLIANCE WITH
MANDATORY THIRD PARTY
VEHICLE INSURANCE
COUNTRY COMPLIANCE
1. Costa Rica
84%
2. UK
90-95%
3. Ghana
70%
4. Pakistan
3-5%
5. Nigeria
?
Source: GRSP Focus, Motor Vehicle insurers & Road
Safety, 2003
LOW PUBLIC CONFIDENCE IN POLICY
‘The Insurance Companies, according to former President Olusegun
Obasanjo smile at you when you come to pick up a Policy and frown at
you when you come to make a claim. Charlatans , knowing fully well that
nobody comes for claims came with fake Insurance Companies only for
one purpose- to give people paper to get pass the Police at check points.
The system is so chaotic that even the Insurance Companies are finding it
difficult to identify their own Policy Certificates while the Law Enforcement
Agencies are completely incapacitated in that regard’.-04 November, 2007
11:00:00 BETHEL OBIOMA
PICK A
POLICY
WITH US
AS WE
LOVE YOU
TOO
MUCH
THIS IS
TOO
GOOD
TO BE
TRUE!!!
MOTOR
VEHICLE
INSURANCE
POLICY
AN ACCIDENT OCCURS
GIVE ME
THE
CLAIM
YOU
PROMISE
D
MOTOR
VEHICLE
INSURANCE
POLICY
WHAT
CLAIM?
YOU ARE
NOT
ENTITLED
TO ANY
PICTORIAL OF ROAD CRASHES
A ROAD CRASH INVOLVING A CAR
ALONG BODE SAADU ROAD
A FIRE ROAD CRASH ALONG BODE
SAADU ROAD INVOLVING AN
OVERLOADED BUS ALL OCCUPANTS
WERE TRAPPED AND BURNT ALIVE
A ROAD CRASH INVOLVING A BUS
THAT ROLLED OVER
ROAD CRASH PICTURES
THE WAY FORWARD
SOME INITIAL CHALLENGES OF
FRSC DATABASE
• The FRSC Database was last updated in 2003 .
• Corrupted Data
• There was no link between vehicle information
and their registered keepers.
• The FRSC vehicle license production stands at
8million number plates.
• However, only an estimated 0.3m records of
registration have been captured in the database
due to non return of form MVA01 by the various
State Boards of Internal Revenue
NEW DEVELOPMENTS
(FRSC DATABASE)
• A Consulting firm has been engaged to review and reengineer the Vehicle License process.
• The process of overhauling the National Drivers License
Scheme is in progress.
• Such processes will ensure that Motor Vehicle licenses
would only be issued upon presentation of valid
insurance policies (minimum third party).
• The Drivers License database has been cleaned and
updated with 2.4 million records.
• Online verification of Drivers License will commence
soon to deal with the issue of fake/multiple drivers
license
• 12 VSATs installed in the Zonal Commands and another
85 to be deployed in all the License processing
centers/Sector Commands
FRSC DATABASE
VEHICLE
INSURANCE
INFO
To determine
insurance
premium
OFFENDERS
REGISTRY
VEHICLE
LICENSE
INFORMATION
FRSC
DATA
BASE
The FRSC Data base is already
Host to information of estimated
2.4 million drivers
PERSONAL
INFORMATION
DRIVERS
LICENSES
INFORMATION
HOW DO WE IMPROVE THE NIGERIA
SITUATION ?
THE INSURANCE INDUSTRY: To partner with the FRSC in the
following area’s:
•
•
•
•
•
IN UTILIZING & FUNDING THE FRSC DATA BANK
LICENSING SCHEME
PROVISION OF PATROL EQUIPMENTS
JOINT ENLIGHTENMENT CAMPAIGNS
SUPPORT /SPONSOR THE PROVISION OF ‘ROAD SAFETY
FUND’ IN THE INSURANCE ACT
TO PROMOTE INDIVIDUAL PASSENGER INSURANCE BY
COMMERCIAL TRANSPORT COMPANIES
GOVERNMENT: TO ENACT A NEW INSURANCE ACT AND PROVIDE
FOR THE ‘ROAD SAFETY FUND’ SIMILAR TO THE ‘FIRE SERVICES
MAINTENANCE FUND’ IN SECTION 65(4) OF THE 2003 INSURANCE
ACT.
“SAFER ROADS, FEWER CLAIMS”
HOW CAN FRSC ENFORCE VEHICLE
INSURANCE POLICY ?
CREATING AN ENABLING ENVIRONMENT
FOR THE INSURANCE INDUSTRY: OUR
MISSION
FIGHT PIRACY THROUGH ICT SYSTEMS:
– Build a robust and enhanced Database for the ULS that shall
synchronize insurance policy information.
– The FRSC already has an information database of more than 2.6 million
drivers
– The Data base shall host records of all licensed drivers and vehicle
– Offenders register that shall capture:
– Driving history records (Crash & violation records)
– Drug & Alcohol records
OPTIMIZE ENFORCEMENT:
– Ensuring that registered/re-registered vehicles are insured and
are “Road worthy”.
– Enforce both driver and vehicle insurance.
“TO RESTORE THE INTEGRITY OF THE NIGERIAN DRIVERS”
LICENSE
ROAD SAFETY FUND
A CASE FOR A ROAD SAFETY FUND AS
PREMIUM
%
THE CURRENT INSURANCE ACT:
– ‘EVERY PUBLIC BUILDING SHALL BE INSURED WITH A
REGISTERED INSURER AGAINST THE HAZARDS OF COLLAPSE,
FIRE…’ Section 65 (1).
– ‘0.25 % OF THE NET PREMIUM RECEIVED BY EVERY DIRECT
INSURER ….SHALL BE PAID QUARTERLY BY EVERY INSURER INTO
A FIRE SERVICES MAINTENANCE FUND… FOR THE PURPOSE OF
PROVIDING GRANT OR EQUIPMENT TO INSTITUTIONS ENGAGED
IN FIRE FIGHTING SERVICES’ Section 65 (4).
THE PROPOSED ROAD SAFETY FUND:
– THE PERCENTAGE OF INSURANCE LEVIES DEDICATED TO ROAD
SAFETY SHALL BE DEDICATED TO ACCIDENT PREVENTION
MEASURES, ROAD SAFETY EQUIPMENT, ICT TECHONLOGIES TO
SUPPORT ROAD SAFETY FRONT-END OPERATIONS, RESCUE
OPERATIONS & ROAD FURNITURE.
WORLD BEST PRACTICES
The
province
of
Quebec, CANADA uses
insurance
premiums
from
motor
vehicle
insurance to fund road
safety activities, like
education
on
road
safety
and
public
enlightenment.
The GHANA National
Road
Safety
Commission
ACT,
1999 provides that a
levy on mandatory
third party insurance is
dedicated to Road
Safety infrastructure.
FINLAND, is the pioneer
country to enforce the use of
insurance levies to support
road safety activities for over
40 years. It has been
reported to raise $8million
per year for education &
publicity campaigns on Road
Safety.
In ZAMBIA, there is a
proposal to apply a 10%
levy on (compulsory) third
party insurance which is
estimated to amount to
about $1million per annum
Source: Wetteland, T & S. Lundebye (1997)
In the state of Victoria,
AUSTRALIA
insurance
levies
dedicated to Road
Safety were intially 3%
of premium, which
was later increased to
10%.
WHO BENEFITS FROM FRSC EFFICIENCY ?
• THE NATION- REDUCED ACCIDENTS, REDUCED CAR
THEFT (SECURITY), A BETTER IMAGE TO INVESTORS
•
INSURERS- MORE DRIVERS NOW INSURE THEIR
VEHICLES (LARGER CUSTOMER BASE), MORE MONEY,
FEWER CLAIMS FROM THE INSURED AS A RESULT OF
ACCIDENTS AND CAR THEFT REDUCTION
•
ROAD USERS- CONFIDENCE IN INSURANCE COMPANIES
WHILE FEWER PEOPLE INVOLVED IN ACCIDENTS AND
GREATER PEACE OF MIND.
•
DRIVERS/OWNERS- CONFIDENCE, SAFER ROAD, FULLER
LIVES AND FEWER THEFT CASES
THANK YOU
FOR
LISTENING