The South African Insurance Association (Saia) views the Road Accident Fund Amendment Bill as a positive step.
The Bill is currently being debated in the National Council of Provinces and is expected to be passed into law in the near future.
According to Tracy Pitman, Saia executive officer, the Road Accident Fund currently has a sizeable deficit and this Bill aims to reverse this deficit position by putting certain limits on the benefits payable.
“The South African Insurance Association supports the government’s socially responsible position, which is a compromise between providing meaningful cover to as many people as possible and keeping the fund financially afloat,” Pitman said on Friday.
She said that while the insurance industry is able to offer top-up-type products, it has lost the ability to sell certain liability products. The short-term insurers have accepted the loss of their ability to sell these products simply because it is the right thing to do in the broader social context of ensuring the future viability of the fund.
Pitman added that the proposed changes to the Road Accident Fund do not suddenly create the need for consumers to ensure that they are adequately insured for their possible future losses. This need has always existed — loss of earnings insurance has always been important to ensure that one is covered for loss of income for any reason, not only from a road accident. — I-Net Bridge