AMENDMENTS TO THE ROAD ACCIDENT FUND

1
AMENDMENTS TO THE ROAD ACCIDENT FUND

• HOW THIS AFFECTS YOU

2
POINTS FOR DISCUSSION

• Summary of adverse changes
• External environment in which the changes have
  occurred
• Consequences of changes
• Duties of Brokers
• Opportunities

3
RESTRICTIVE AMENDMENTS

• General Damages (Pain, suffering, Loss of
  Amenities of Life) limited to serious injuries
• Damages for loss of income capped at R160 000
• Loss of support claims limited to R160 000 for
  all dependents
• Medical expenses (other than in emergency
  situations) are limited to the rates of public
  health institutions

4
RESTRICTIVE AMENDMENTS (Continued)

• COMMON LAW RIGHT TO SUE THE PARTY CAUSING THE
  LOSS
• HAS BEEN REMOVED
• What of foreigners ?
• Claims against compatriots
• Claims against South African residents

5
EXTERNAL ENVIRONMENT

• VEHICLE POPULATION FOR THE PERIOD BETWEEN
• 31 MARCH 2007 TO 31 MARCH 2008
• The number of registered vehicles has increased
  from 8 727 062 to 9 182 677
• The total number of vehicles that are
  un-roadworthy and/or unlicensed has increased by
  18,23
• On a national basis and over an 8 year period
  the average number of vehicles per kilometre of
  road has increased by 36,6
• Source Road Traffic Report March 2008
• Compiled by Road traffic Management Corporation

6
EXTERNAL ENVIRONMENT (Continued)

• FATALITIES AND INJURIES
• Violence and motor vehicle accidents continue to
  be major causes
• of death in South Africa
• Violence is the major cause of non natural death
  accounting for 36 of all deaths
• Transport related deaths account for 32 of all
  non natural fatalities
• Source The 9th Annual Report of the National
  Injury
• Mortality Surveillance System

7
OVERALL MANNER OF DEATH
Non-Transport 28.9
Transport 71.1
8
EXTERNAL ENVIRONMENT (Continued)

• Other Contributing Factors
• Increased alcohol and substance abuse
• Deteriorating roads
• Increase in road rage
• High Exposure with Limited Legal Rights of
  Recovery

9
REGULATORY REALITY

• Delays in proving claim
• Access to legal assistance
• Access to supporting documentation
• Administrative inefficiencies
• RAF
• Deceased Estates
• Delays in settlement of proven claims

10
DUTIES OF THE INTERMEDIARY

• Section 2 of FAIS General Code of Conduct
• A provider must at all times render financial
  services honestly, fairly, with due skill, care
  and diligence, and in the interests of clients
  and integrity of the financial services
  industry.

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DUTIES OF THEINTERMEDIARY (Continued)

• Educate the client to enable him to make well
  informed decisions
• Analyse needs
• Identify gaps in cover
• Propose solutions
• Deliver

12
OPPORTUNITIES

• Exposure and Duties Opportunities
• So Leap into action
• Create awareness
• Locally
• International Clients
• Tourists
• Establish Solutions
• Implement in a holistic and integrated manner

13
INTEGRATED SOLUTIONS (Continued)

• Short Term Insurance
• Group Personal Accident
• Stated Benefits
• RAF Specific
• Schemes
• Per Motor Vehicle
• Lift Clubs
• Employers
• Private
• Disability and medical (monitor regulatory
  developments)
• Hybrid ?
• If appropriate and with appropriate skills and
  competencies

14
INTEGRATED SOLUTIONS

• Establish policies in place including
• Medical Schemes
• Limits
• Extent Do they cater for private care
• Life and Disability
• Group Schemes
• Individual Policies
• Capital Disability
• Income Protection

15
INTEGRATED SOLUTIONS (Continued)

• In developing solutions be careful not to
  restrict the cover
• in a reactive manner to the exclusion of other
  accidental causes of death or injury as reflected
  in the statistics
• to the exclusion of other solutions
• unless otherwise agreed by your client.

16
INDUSTRY CONSIDERATION

• Lobby to
• reclaim right to institute legal action in excess
  of the RAF limits
• The removal of these rights perpetuates an
  environment of non accountability
• and if successful
• introduce compulsory third party liability
  insurance to cover such exposure
• Control through annual issue of vehicle licences

17

• Thank you
• for your time and patience