Amendments to Motor Traffic Act set insurance industry back decades

Sri Lanka’s insurance industry stakeholders have warned that the amendments to the Motor Traffic Act, which were passed in parliament last month, in relation to mandatory police reports on accidents, risk setting the insurance industry back decades.

According to the amendments, after any accident, drivers and occupants of the vehicles involved would have to fill out a prescribed form and hand it over to the nearest police station for certification within 24 hours, without which, an insurance claim cannot be made.

The insurance industry stakeholder said this would be a great inconvenience to the public and vehicle users alike, since the processing at a police station could take 3-4 hours and more than one visit, which would become even worse if the accident happens during a long journey far away from a police station. “The vehicle population in Sri Lanka is estimated to be over 4 million.  Are our police stations geared to handle such situations?  Due to these reasons it took 3–4 months to get an insurance claim even up to 1990’s.  Are we going back to that era?” a motor insurance industry official who requested anonymity questioned.  

“But I must say insurance companies will benefit through this move and they will be happy to delay claims. But it is the innocent victims that will have to suffer,” he added.

Currently, most insurance providers are following an internationally recognized ‘On the Spot’ insurance claim method, which has evolved through market competition, for the benefit of the public. This innovation will be rendered impractical under the new rules.

Due to the ease of the ‘On the Spot’ type of insurance programmes, police officers too have on occasion advised motorists and mediated aggrieved parties to claim their insurance easily, instead of filing police reports. The insurance industry said that the new laws may prompt motorists to bribe officials like in the past without reducing the frequency of accidents, which is more related to the country’s road capacity, which is grossly inadequate.

The stakeholders said that there are much more efficient methods to collect data on accidents, if the government is keen to do so.