COLLABORATION

Insurance regulator, NTSA in deal to curb fraud

Cartels behind fraud in motor vehicle insurance warned

In Summary

•The two on Thursday signed an MoU that will see them collaborate in supervision, compliance and enforcement of regulations.

•IRA CEO Godfrey Kiptum says the partnership will help curb fraud and other vices in the motor vehicle class of insurance business.

Wreckage of a car involved in an accident at Salgaa along Nakuru-Eldoret Highway.FILE
Wreckage of a car involved in an accident at Salgaa along Nakuru-Eldoret Highway.FILE

The Insurance Regulatory Authority (IRA) and National Transport and Safety Authority (NTSA) have partnered to curb fraud in the motor vehicle class of insurance business.

The two on Thursday signed an MoU that will see them collaborate in supervision, compliance and enforcement of regulations.

The MOU shall facilitate sharing of relevant data between NTSA, IRA and the insurance industry through structured exchange of information including but not limited to the use of integrators.

 

The exchange of information will include a verification module to enable IRA verify the policy information obtained by NTSA from the insurance companies.

The data exchange shall be enabled by the NTSA’s “Transport Integrated Management System (TIMS) which incorporates all functions relating to motor vehicle registration, licensing and inspection.

It is integrated with the electronic sticker (e-Sticker) system which will play critical role in supporting enforcement activities so as to reduce motor vehicle theft, and enable easy of tracking of unregistered motor vehicles on the road.

Speaking during the signing of the MOU, the Commissioner of Insurance who is also the CEO of IRA Godfrey Kiptum said the partnership will help curb fraud and other vices in the motor vehicle class of insurance business.

Ultimately, this will quicken the time taken to settle motor vehicle insurance claims since detailed data on the motor vehicles would be readily available, he said.

By signing this working protocol between IRA and NTSA, we are sending yet another very strong signal to the cartels behind fraud in motor vehicle insurance that their days are numbered”, said Kiptum.

In his remarks, NTSA Director General George Njao said the partnership will go a long way in enhancing service delivery to the citizens and ultimately enhance road safety in Kenya.

He further noted it will also assist in supporting enforcement of traffic rules especially in the PSVs sector, which serves more than 80 per cent of Kenyans.

The MOU also provided an opportunity for the two parties to create road safety awareness though collaborative efforts, to conduct joint road safety sensitization and education campaigns in order to reduce road accidents thereby leading to both a reduction in fatalities and insurance claims.

Data by IRA  for Q1(January – March 2020) shows a total of 576,930 claims were outstanding at the beginning of the quarter.

Claims paid during the quarter were 1,492,059 while rejected claims stood at 17,958.

13,036 claims were closed as 'no claims' during the quarter where the proportion of rejected general liability claims increased to 0.07 per cent compared to 0.05 per cent recorded in Q4 2019.

"The proportion of rejected general non-liability claims also increased to 0.8 per cent in Q1 2020 from 0.6 per cent reported in Q4 2019," IRA notes in its report.

In addition, the proportion of rejected long term business claims in Q1 2020 increased to 1.12 per cent from 0.16 per cent recorded in Q4 2019.