HARMONIZATION OF THIRD PARTY MOTOR VEHICLE
INSURANCE SCHEME FOR THE COMESA/SADC/EAC
REGION
RECORD OF KICK-OFF MEETING OF THE
TRIPARTITE STEERING COMMITTEE HELD ON 23 RD
AUGUST, 2011 AT TAJ PAMODZI HOTEL, LUSAKA,
ZAMBIA
MEETING CHAIRPERSON: Chief Transport
Economist, Ministry of Transport and
Communications, Botswana - Ms. Elvies Joina
MEETING PARTICIPANTS
COMESA Secretariat
:
Insurance Expert - Mr.
Kelvin Chisongo
SADC Secretariat
:
Senior Programme Officer –
Transport, Ms. Mapolao Mokoena
EAC Secretariat
:
Senior
Materials/Procurement
Engineer,
Mr.
Gratian
Rutaserwa
Trade Mark South Africa (TMSA): Mr. Charles
Chaitezvi, Ms. Lina Chauke
Tripartite Steering Committee Members Present:
(as per list of participants)
Rayfact
Investments
(Pty.)
Limited
–
The
Consultants, Mr. Peter Magaya
AGENDA
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
1.
Opening of the Meeting & Welcome (Host
and RECs)
2.
Introductions
3.
Adoption of the Agenda
4.
Remarks from COMESA Representative
5.
Statement
of
Objectives
SADC
Secretariat
6.
Project Management & Terms of Reference –
COMESA/Trade Mark South Africa
7.
Inception Report – Rayfact Investments
(Pty.) Limited
8.
Discussions
9.
Resolutions
10.
Conclusion of Meeting
1.
Opening of the Meeting & Welcome
(Host and RECs)
1.1 Ms. Mapoloa Mokoena introduced the
Chairperson of the day, Ms. Elvies Joina –
Chief
Transport
Economist,
Ministry
of
Transport and Communications of Botswana,
who in turn introduced the host from Zambia
and asked her to give the opening remarks.
1.2 Ms. Mwendalubi Moono Msoka of Zambia
welcomed all the guests and extended an
invitation for them to visit the city after
the meeting. She advised that Zambia was
pleased to host the guests at the meeting.
2.
Introductions
Ms. Mokoena advised the meeting that some
members present had attended the kick-off
meeting on Liberalization of Road Transport
in the ESA Region so for the sake of time,
members should introduce themselves when
they wanted to speak during the meeting.
2|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
3.
Adoption of the Agenda
Mr. Pumi Mfwankila of Zambia proposed and
Mr. Dominic Rurangirwa of Rwanda seconded
the adoption of the Agenda.
4.
Remarks from COMESA Secretariat –
Insurance Expert, Mr. Kelvin Chisongo
4.1
Mr.
Kelvin
Chisongo,
an
Insurance
(Yellow Card) Expert at COMESA, gave brief
outline of the COMESA Yellow Card Scheme and
its inherent benefits to the members. He
mentioned that there were thirteen countries
that were participating in the COMESA Yellow
Card Scheme. While Tanzania is not a member
of COMESA, it was a member of the COMESA
Yellow Card Scheme. On the other hand in the
EAC, 4 countries belonged to COMESA and one
was SADC, so there were over-laps in terms
of the administration of the Yellow Card
Scheme.
4.2 According to Mr. Chisongo, the main
advantages of the COMESA Yellow Card Scheme
were that;
a) it facilitates the smooth movement of
vehicles across member states;
b) it provides third party insurance as
required by the country being visited by
the driver;
c) it is obtained in the country of origin
of the driver/motorist before starting on
the outward journey; it saves time and can
be bought in the country’s local currency;
d) it provides common systems for claims
settlement
across
the
member
states,
3|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
particularly
through
the
inter-bureau
agreements and the COMESA Clearing House;
e) the systems is now automated in some
countries and it is easy for member states
to access information regarding foreign
vehicles
when
they
get
involved
in
accidents;
f) the insurance also has a reinsurance
facility that deals with large claims in
excess
of
the
individual
country’s
underwriting limits;
g) the Yellow Card system is now a tried and
tested system compared to other systems in
the region – both local and bi-lateral
ones;
h) the Yellow Card system is private sector
driven in that in the main most local
insurance participants are private-owned
companies to the extent that the scheme
should
be
run
profitably
without
compromising the insurance standards.
4.3 Mr. Chisongo then attended to questions
fielded by the members some of which are
covered in the summary of advantages.
5.
Statement of Objectives - SADC
Secretariat, Senior Programme Officer
Transport – Ms. Mapolao Rosemary
Mokoena
Ms. Mokoena informed the meeting that the
objective of the project on Harmonization of
the Yellow Card Systems with the local
systems in the eight beneficiary countries
was
that
it
had
proved
difficult
for
transporters from those countries to move
4|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
into
the
Yellow
Card
member
states.
Therefore some of the affected countries had
asked to be included in the Yellow Card
Scheme. On the other hand the local systems
applying in the individual countries did not
cater
for
requirements
in
the
foreign
countries so there was a need to harmonize
the different systems. The Protocol on
Harmonization of the Yellow Card System with
the other systems is in line with the other
regional goals on harmonization, she said.
6.
Project
Management
&
Terms
of
Reference
(TOR)
–
Trade
Mark
South
Africa
o.b.o.
COMESA/SADC/EAC
Secretariats
Mr. Charles Chaitezvi advised that the Terms
of Reference were specific as indicated in
the
working
papers
in
the
files
for
delegates. For the sake of time, he referred
members present to the notes.
7.
Inception
Report
–
Rayfact
Investments
(Pty.)
Limited
(the
Consultants)
Mr. Peter Magaya, presented a slideshow of
his company’s report (copy attached to these
minutes). On enquiry, he conceded that the
document in the file of documents for
delegates was indeed the initial proposal to
SADC which was submitted in March, 2011. The
final preliminary report would be presented
to
members
via
the
COMESA/EAC/SADC
5|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
Secretariats. Of particular note in the
presentation were the following issues;
a)
the Consultants’ TOR were based on the
Workplan on Harmonization of the Yellow Card
Scheme with existing local systems agreed on
at the Task Force Meeting held in Gaborone,
Botswana between 16th and 17th March, 2010 and
subsequently adopted by the SADC Ministers
Responsible for Transport in November, 2010;
b)
arising
from
the
Workplan,
the
Consultants
would
be
holding
national
workshops in eight countries namely; Angola,
Botswana,
Democratic
Republic
of
Congo
(DRC), Mozambique, Namibia, Lesotho, South
Africa and Swaziland;
c)
the
assignment
should
culminate
in
concrete proposals regarding changes needed
in
legal,
institutional
and
logistical
systems of each of the beneficiary countries
so that implementation of the harmonization
project becomes tenable;
d)
based on this mandate, the timeframe for
this project is four months starting August,
2011 and ending in November, 2011.
8.
Discussions & Follow Up Questions
8.1 On question from Mr. Charles Chaitezvi of
TMSA regarding viability of the Yellow
Card System, Mr. Chisongo pointed out
that in 2010, the Yellow Card members
collected and remitted United States
Dollars 5,2million and close to 25% of
the business was transacted at the border
of exit from the motorist’s country of
origin.
6|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
8.2 In response to a question from a member
from Uganda as to the meaning of Yellow
Card, Mr. Chisongo advised that the
Yellow Card was a name given to a
compulsory
form
of
insurance
issued
within COMESA with the intention that the
insured client could use that card in a
foreign country. Europe operates the
green card, while Asia has an orange card
for third party insurance.
8.3 As to the challenges and opportunities
the COMESA Yellow Card was facing, Mr.
Chisongo explained that nowadays things
are better than before in
a) that some five out of the thirteen
countries were automated and online to be
able to view details on Yellow Cards
issued by other countries
b)the remittance of funds for claims is
better due to less controls on foreign
currency remittances;
c) for remittances, there are the COMESA
Clearing House and COMESA Bank;
d) the Management Technical Committee
meets quarterly to review the performance
of the Scheme while the ZEPRE – Third
Party Motor Reinsurance Pool serves as
consulting bodies to the Scheme;
e) the Scheme’s financial statements are
audited every year and members of the
National Bureaux share in profits arising
from the operations of the scheme.
8.4 On a question from TMSA regarding other
payments, such as carbon tax and fuel
levy, payable at the border, Ms. Mokoena
advised that all such payments are being
7|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
harmonized under the Liberalization of
Road Transport in the ESA Region so that
there is limited financial transactions
and delays at the borders.
8.5 Mr. Barney Curtis of FESARTA raised the
following issues which he said should be
noted in the report and attended to by
the consultants;
a) for
South
Africa,
there
was
considerable
work
done
towards
harmonizing the Yellow Card System with
the Fuel Levy system to the extent that
there might be no need for further
research or delay in executing this
project;
b) the
project
is
covering
only
8countries based in SADC, yet the
Yellow Card is a Tripartite arrangement
within
COMESA/EAC/SADC
Region;
the
assignment
should
include
other
countries outside SADC that are not yet
participating;
c) there was need for comparison of cost
of the insurance cover i.e. Yellow Card
Scheme
against
local
third
party
insurance systems in line with limits
of liability covered.
8.6 Mr. Dominique Rurangirwa of Rwanda wanted
to know which Ministers of Transport had
endorsed the Workplan on Harmonization of
the Yellow Card with the Fuel Levy and
Cash Systems, Mr. Magaya advised him that
the
SADC
Ministers
Responsible
for
Transport were the ones who endorsed the
Workplan on Harmonization.
8|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
8.7 Mr.
Rurangirwa
proposed
that
the
consultants should also carry out a
background check in the EAC region and
other blocks such as WACA so as to come
up with a better situational analysis of
the respective countries being worked
upon.
8.8 Mr.
Gratian
Rutaserwa
of
the
EAC
Secretariat queried why Tanzania was not
included in the harmonization project,
yet it was a member of the Yellow Card
Scheme and on the other hand Tanzania had
problems with their local system where
motorist go without insurance cover and
collection of premium. The answer given
was that Tanzania was already operating
the Yellow Card System and the intention
was to integrate the eight into being
members of the Yellow Card System.
8.9 Engineer David Steven Makanga of Uganda
highlighted some editorial errors found
in
the
proposal.
The
Chairperson
suggested that the speaker should pass
the information to the consultant so that
no detail could be lost. Mr. Magaya
commended Eng. Makanga for his sterling
effort in going through the paper and
highlighting the short-comings therein.
He promised to take the changes into
account in his final report which would
be submitted for adoption.
8.10
Mr. Ronald Amanyire of Uganda asked
what
those
countries
who
were
not
signatories to the Yellow Card would do
to access the Yellow Card Scheme. He
proposed that there was need for adoption
9|Page
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
of e.g. the Botswana Fuel Levy and Cash
systems by some of the countries that
were having problems with their local
systems. He emphasized the need to
evaluate the local systems so that the
pros and cons of introducing the Yellow
Card Scheme to the particular countries
are wiighed. Mr. Magaya advised Mr.
Amanyire that those countries that were
not members of COMESA Yellow Card Scheme
should
join
through
their
countries
either through their member institutions
or the Protocol on Harmonization.
8.11
Mr. Godwin Tlhogo – Chief Transport
Officer of Botswana, informed the meeting
that Botswana was in the process of
reviewing
the
legislation
on
transportation so it was imperative that
the project on harmonization is speeded
up so that the changes it would bring
would
be
included
in
the
revised
legislation.
Mr.
Magaya
noted
this
comment and advised that the progress of
the project depended on agreement on the
national workshop time-table given to Ms.
Mokoena of the SADC Secretariat and the
outcomes of each of those workshops. 8.12
Mr. Pumi Mfwankila, the Principal
Licensing Officer of the Road Transport
and Safety Agency of Zambia, indicated
that
the
inception
report
was
commendable. However, he recommended that
the study could look at the ideal scheme
for
cross-border
road
transportation
besides the Yellow Card Scheme. According
to him, the study should include Zambia’s
10 | P a g e
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
legislation on third party insurance –
limits on death and injury and regional
study tours of Africa and Europe. He also
recommended that Consultants should look
into the current programmes which the
African Trade Organization were working
on in order to link same with this
project.
8.13
He suggested that a problem analysis
should be done to underline the problems
belying the status of road traffic and
third party insurance in the different
countries.
8.14
Mr. Chaitezvi of TMSA observed that
the assumption seemed to be that the
Yellow Card Scheme was a given. In his
analysis, the idea arising from the
meeting was that the consultants should
look at alternatives which would be more
practical in application. Therefore the
TOR should be clearly stated to include
both Harmonization of the COMESA Yellow
Card System with the existing local
systems e.g. the fuel levy system and the
cash systems and the extension of the
local systems to cover motorists going
abroad
so
that
the
systems
became
complimentary.
8.15
Mr.
Rurangirwa
asked
what
jurisdiction the Yellow Card was under,
the average time it took member bureaux
to settle a standard claim and the nature
of liability the insurance covered. Mr.
Chisongo of COMESA advised that usually
where the claim was straight-forward and
the information was available, a claim
11 | P a g e
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
would take about two or so weeks. He
informed the meeting that the national
bureau where the claim happened would
settle the claim on behalf of the foreign
driver and the insurer under which the
driver was insured through. The claim
would be settled in line with the limits
and jurisdiction applying in the yellow
card issuing country. According to Mr.
Chisongo,
the
third
party
liability
insurance was limited to death, injury
and third party property damage where
such extension is included.
8.16
Mr. Mfwankila highlighted that in
spite
of
the
explanation
from
Mr.
Chisongo, he had observed that it had
taken so long for a claim that occurred
in Rwanda involving a Zambian vehicle and
passengers to be settled. In response,
Mr. Chisongo reported to the meeting that
every claim had conditions for reporting
and
settlement
according
to
the
applicable jurisdiction. In the reported
claim, he informed the meeting that the
claim had been registered, an independent
assessor had been appointed to determine
quantity of loss while the reinsurance
pool managers (ZEPRE) had been informed
about the claim. At the time of the
meeting, COMESA and the Zambia National
Bureau on the Yellow Card were waiting
for
a
report
on
quantum
from
the
independent assessor. He also advised
that the cost of the claim would be
reimbursed to Rwanda once it was settled.
12 | P a g e
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
8.17
Mr. Curtis asked about what would
happen in case the claim exceeded $10,000
as
Mr.
Chisongo
mentioned
and
how
accountable were the National Bureau
regarding remittance of claims funds. The
answer was that in case the claim amount
exceeded the underwriting or settlement
limit
of
the
National
Bureau,
the
Reinsurance Pool would respond and pay
any amount in excess of the $10,000.00
since they would have already been
informed. Mr. Magaya added that each
National Bureau was accountable to COMESA
Secretariat
through
the
Council
of
Bureaux and the Technical Management
Committee which look at the operational
affairs of the Bureaux.
8.18
Mr.
Ephraim
Mokotedi,
Principal
Transport Officer, of Botswana asked the
consultant to carry out a thorough
analysis of the existing local schemes
and come up with recommendations on
improvement thereof. This would help the
process of harmonization of those systems
with the Yellow Card Scheme.
8.19
Mr. Bokhutlo Modukanele, Principal
Transport Officer I, of Botswana advised
the consultant that information from the
Ministry of Transport and Communication
should be sought from the Permanent
Secretary and not the Director. He also
note that the Botswana Ministry of
Finance controlled both the Motor Vehicle
Accident (MVA) Fund and the Botswana
Unified Revenue Services (BURS) hence
Consultants should involve that Ministry
13 | P a g e
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
in
terms
of
gathering
relevant
information for this project.
8.20
Mr. Muketambo Limwanya, Senior RTSA
of Zambia, suggested that the consultant
should consider bi-lateral arrangements
like the one between Namibia and Botswana
so
that
the
good
things
in
that
arrangement could be incorporated in the
harmonization process. The consultant
advised the speaker that the purpose of
harmonization of the Yellow Card Scheme
with the cash and fuel levy systems was
to make the system in line with other
multi-lateral
agreements
in
COMESA/SADC/EAC,
particularly
the
Protocols on Harmonization.
8.21
Regarding a question on the potential
start dates of the National Workshops,
Ms. Mokoena advised that she would give
the dates of her availability by the end
of the week of the meeting (Friday 26th
August, 2011) to the Consultants so that
they could finalize their itinerary.
9.
Resolutions Arising From the Meeting
9.1 Members agreed that the Consultants’
report would be adopted, subject to the
changes and corrections noted during the
meeting.
9.2 Whilst the Task Force Members understood
the
Terms
of
Reference
issued
to
the
Consultants by the Principals, TMSA on
behalf of COMESA/SADC/EAC, they agreed that
it might be necessary for the Consultants to
take a bit longer in order to address the
fears and concerns of the Task Force raised
14 | P a g e
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
during the meeting. In that regard, the
Consultants should agree with Principals
whether the assignment should be extended in
scope and time.
9.3
The
meeting
agreed
that
different
countries were facing problems with their
local systems, so it was imperative that the
Consultants carried out a problem analysis
in each country with the intention to
improve the local systems rather than focus
only on the Harmonization with the Yellow
Card System.
9.4
The
meeting
also
agreed
that
the
Consultants should carry out a thorough
analysis of the why the Yellow Card System
was introduced and review its advantages and
disadvantages so that Task Force Members
could appreciate the system better. It
should then also be easy to harmonize it
with the local systems.
9.5 It was also the Members agreement that
the
project
should
be
carried
out
at
Tripartite level rather than just for SADC
countries. Therefore, the Consultants should
develop legal instruments that would have
the Protocols on Harmonization of the Yellow
Card with the existing local systems in
COMESA, SADC and EAC region to cross-breed
for the benefit of member states. The multilateral agreements should be reviewed in
light of their advantages over the local bilateral country to country agreements.
10. Conclusion of Meeting
Ms. Elvies Joina thanked the Task Force
members one for their inputs during the
15 | P a g e
COMESA/EAC/SADC 3RD PARTY MOTOR VEHICLE INSURANCE SCHEME
meeting. She asked Ms. Msoka of Zambia to
close the meeting. Ms. Msoka thanked all the
delegates again for making the meeting
interesting. She encouraged everyone to
visit the beautiful city of Lusaka and feel
free to visit again in future. With those
remarks, the meeting ended at 14:40hours.
16 | P a g e