Impact of Act
22 July, 2017, 12:00 am
AN insurance provider in Fiji is conducting an analysis on how its operations will be impacted with the introduction of the new Accident Compensation Act next year.
Government in the 2017-2018 National Budget had introduced the new law which will essentially replace the existing Motor Vehicle’s Third Party Insurance Act 1948.
Sun Insurance, one of Fiji’s leading insurance companies with more than 60,000 policyholders, has projected a reduction in their gross revenue and estimated job losses with the new Act.
According to Sun Insurance chief executive officer Lolesh Sharma, the company will incur a loss of $4.5 million to their gross revenue when the Accident Compensation Act comes into force from January 1 next year.
“There will be estimated job losses of around 20 to 30 staff which includes job losses suffered by commissioned agents around the country, in particular rural parts of the country,” he said.
This includes Sun Insurance agents in Sigatoka, Ba, Nadi, Lautoka, Rakiraki, Tavua, Tavenui, Savusavu and Labasa.
“This is where our agents and service centres are heavily reliant on compulsory third party for their income,” Mr Sharma said.
He also confirmed the legislation reforms would also largely affect their entry level staff, mostly customer service officers and personal injury claims specialists.
The new act, Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum earlier this year, said was needed to be repealed and a new provision put in place.
This, he said, was essentially to provide the immediate justice to ordinary Fijians who were currently being not covered under the current legal framework.
The new law will also see the establishment of the Fiji Accident Compensation Commission (FACC), where motor vehicle accident victims can seek compensation by lodging their own claims.
Meanwhile, Mr Sharma raised concerns on insurance companies being “wrongly blamed” for the shortfalls of the Motor Vehicle Third Party Act.
“Unfortunate that the likes of the Consumer Council of Fiji are wrongly blaming the insurance companies,” he said.
“Some very basic understanding of the CTP framework will make one realise that Motor Vehicles (Third Party Insurance) Act is a very old piece of legislation.
“The Act is some 74 years old. Understandably there are issues with this old piece of legislation, just like any old piece of legislation.
“Even insurance companies for many years have sought a review of these archaic limits.”