Kuwait: Insurers protest measure on auto claims
Source: Middle East Insurance Review | Mar 2018
Insurers have expressed concern over the forthcoming implementation of a provision (Article 41) of the traffic law that allows immediate settlement of minor traffic accident claims.
The Ministry of Interior has decided to implement the measure starting from March in the Capital governorate on an experimental basis and then extend it to the rest of the country after reviewing the pilot project in the Capital governorate.
Under the new procedures, the victim of a traffic accident needs to fill up a reconciliation order form with all necessary details, including the amount of his claim. He would then approach the insurance company, and the insurer is obligated to pay the claim immediately.
The victim has to pay KWD20 (US$67) to the Traffic Violations Department before he receives a copy of the reconciliation order. The form will be available at police stations and with patrol teams.
Mr Mohammad Al-Zanati, an insurance industry executive, said the decision came as a major blow to insurers, as it will result in them bearing huge losses. He suggested increasing the premiums payable for motor insurance, reported Arab Times Online.
Ms Mayadah Al-Ali, Manager of Dar Al-Salaam Insurance Mayadah, said car owners would be happy about this decision as it will enable them to receive compensation within a few days.
However, the decision will create a big problem for insurers especially since those who cause the traffic accidents will not have to pay compensation. She suggested the payment of compensation be shared on a 50-50 basis between the insurer and the individual responsible for the traffic accident.
The Kuwait Insurance Federation stressed the need to hold a meeting with the authorities to discuss the matter and offer suggestions to resolve it. M
KWD1 = US$3.33