Middle East - Bahrain: Fund launched to compensate motor victims
Source: Middle East Insurance Review | May 2016
The Central Bank of Bahrain (CBB) has announced the launch of a compensation fund for victims of motor accidents after a two-year delay due to the lack of capital.
Compensation will be made from the fund where the vehicle causing the accident lacks insurance cover at the time of the incident or where the case involves a hit-and-run and the identity of the driver or car owner cannot be ascertained and bankruptcy of the insured. Compensation will be paid in respect of incidents that take place within Bahrain.
All insurers in the Kingdom will contribute 1% of their motor insurance revenue or BHD5,000 (US$13,250) a year whichever is higher, to the fund. With annual motor premiums of around BHD72 million a year, the fund is expected to receive at least BHD70,000 a year in contributions. Other sources of revenue include donations, grants and investment returns.
Compensation will be retroactive for those affected in cases that occurred since the establishment of the fund, according to local media reports. Compensation of BHD10,000 is payable in the case of death or total disability. Those who suffer partial disability will be given a proportion of BHD10,000. The beneficiaries will not be barred from seeking higher compensation, where possible, from those who caused the accident.
The fund has a seven-member board of directors, comprising representatives from the CBB, the Bahrain Insurance Association, the General Directorate of Traffic and experts in financial and insurance services.
The fund will also work to recover the amount of compensation it has paid from those causing the accident in question, to avoid moral hazard.
BHD1 = US$2.65