Capital Ethiopia Newspaper

IFO blasts Ethiopian Insurance, praises Oromia Insurance

Enforcement of new law begins next Sunday

The Insurance Fund Office (IFO) is blaming the Ethiopian Insurance company (EIC) for delays registering vehicles for Third Party Insurance policies. Meanwhile other insurance companies are being praised for remaining open after business hours and on weekends to complete the project. The IFO has also denied Nyala Insurance Company’s special proposal which plans to make its Olympia branch the only Third Party Insurance policy registration center.

Alemu Ejigu, the director of operations told Capital that EIC is not meeting the expectations of the office. He said that some organizations have appealed to the office because they have not received proper service from EIC. He explained that EIC has  shown less interest to register its customers for third party policies, and didn’t give expected response for some requests and returned them back. On the other hand the Office has especially praised Oromia Insurance Company (OIC) for their work. IFO confirmed that OIC is working even more than expected by sending letters to non-customer organizations as well.

Meanwhile, the IFO has denied Taxi Associations’ request to provide a long term payment mechanism. The payment mechanism of premium is not related to IFO. The associations can negotiate with the insurance companies that can elongate the total payment, but for not more than 90 days because of the National Bank of Ethiopia’s directive, Alemu told Capital.

Only six days are left for the deadline to register vehicles with third party insurances. The insurance fund office (IFO) has said in mid November that about half of the existing vehicles (total is 350,000) have yet to sign up with the 13 nationwide insurance companies.

As the proclamation 559/2008 article 37 says starting from next Sunday, All vehicles owners who don’t have Third Party Insurance sticker on their car front shield will face fines up to 5,000 birr or up to two years imprisonment.

Starting from the coming Sunday all new vehicles on the roads of Ethiopia through importation must join the Third Party Insurance immediately.

The acting Director of IFO, Sisay Abaferda, says every vehicle owner needs to buy third party insurance since it is awarded an annual vehicle checkup sticker by the concerned authority. All same type of vehicles in purpose and kind, whether they are new or not pay equal amount of premium without the need of the insurances checkup.

IFO has said that the three months time they allotted was sufficient and no additional time will be given without a penalty. Insurance firms on their part claim that the period is very short to handle all their customers and fear they may not be able to serve them all even by working extra hours and over the week end.

To buy the premium the minimum total cost is 537 birr for vehicles less than 1600cc and used for private purpose and the maximum total amount is 4,510 birr for NPR, FSR, and FVR model vehicles which are believed to be the most accident prone. IFO’s stickers are made in England to avoid forgery.

The fund office made clear that the current premium amount paid for the insurance will be valid for one year only. Sources have indicated that there are even insurance companies who don’t buy third party insurance policy premium for their own vehicles.

The insurance office told Capital that totally 334,750 sticker and certificates have been issued to 13 insurance companies. Among this the Ethiopian insurance corporation (EIC) has taken the majority.

Sisay affirmed that on December 10, IFO will start providing the promised packages to the victims, including paying the medical cost of victims who are hit by vehicles up to 1,000 birr. Any injured party can get free medical service at any medical center any time. The fund will pay 15,000 birr for body loss due to accidents and 40,000 in case of death in a hit and run accident.

Though policies differ, most insurance companies pay up to 200,000 birr for multiple fatalities and 30,000 in case of death. The new law has no maximum amount for aggregate death. This is the first time there has been a law with a specific amount of reimbursement for accidents or bodily injury.