Compulsory motor third party liability in Mozambique

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<ul><li><p>Compulsory Third </p><p>Party Insurance in </p><p>Mozambique Presentation</p><p>4 February 2016</p><p>Presented by Henri Mittermayer</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>Presentation Structure:</p><p>I. Introduction brief history</p><p>II. The Law nr. 2/2003, of 21 January</p><p>III. Compulsory Insurance definition</p><p>IV. Compulsory Motor Third Party Liability and the Insurance Law</p><p>V. What is happening on the ground </p><p>VI. Final notes/ comments</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>I. Introduction brief history:</p><p>In 1991, Mozambique changed from socialist to freemarket economy. mozambican parliament regulatedthat any insurance and reinsurance activity could beexplored by either public or private entities, as long asthose entities were duly licensed.</p><p>The supervision of the insurance activity is under themandate of the Ministry of Finance -more specificalythe ISSM an entity subordinated to the Ministry ofFinance, which is responsible for the supervision of theInsurance activity in Mozambique.</p></li><li><p>Compulsory Motor Third Party Liability InsuranceIV. The Law nr. 2/2003, of 21 January:</p><p>In terms of this law the motor third party liability insurance is compulsory in the Republic of Mozambique and,</p><p>The transit on public roads of vehicles and trailerswithout the respective insurance cover obtained froman insurance company licensed in Mozambique is notallowed.</p><p>This insurance covers the civil liability of people orentities responsible for patrimonial and non-patrimonialdamages caused to third parties as a consequence ofany road accidents</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>II. Compulsory Insurance:</p><p>Compulsory Insurance can be defined as any type of </p><p>insurance an individual or business is legally required </p><p>to buy. Compulsory insurance is mandatory for </p><p>individuals and businesses that want to engage in </p><p>certain financially risky activities, such as operating an </p><p>automobile or operating a business with employees.</p><p>In Mozambique the following insurance classes are </p><p>compulsory:</p><p> Motor third party liability insurance;</p><p> Workman compensation insurance;</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>III. Compulsory Motor Third Party Liability and the</p><p>Insurance Law</p><p> As per the Mozambican Insurance Law, all the</p><p>compulsory insurance contracts in Mozambique must</p><p>be governed by the laws of Mozambique.</p><p> This is an exception to the general norm in terms of</p><p>which, the parties entering into an insurance contract</p><p>to cover risks located in Mozambique are free to chose</p><p>the law to govern their contract.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. The Law nr. 2/2003, of 21 January:</p><p>The following were the key motivations for the approval and publication of this law:</p><p>The growth of the road traffic in Mozambique, mainly inMaputo;</p><p>The proliferation of vehicles in Mozambique without anyinsurance;</p><p>A significant increase of road accidents, mainly the so calledHit and run.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. The Law nr. 2/2003, of 21 January:</p><p>Who should insure for third party liability?</p><p> The owner of the vehicle or asset. </p><p>Any person or institution with usufructuary rights to the vehicle or asset. </p><p>Lessee, in case of leasing.</p><p> if any other person contracts the insurance as requiredby the law, the legal obligation of the above mentionedpeople is considered as being complied with.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. The Law nr. 2/2003, of 21 January:</p><p>Minimum required sums Insured:</p><p> 300,000.00MZN</p><p> 20,000.00MZN maximum limit of indemnity to eachpassanger, for vehicles licensed for passanger transport(sum insured 20,000.00MZN x nr. Of allowedpassangers + 300,000.00MZN)</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. What is happening currently:</p><p>Short Term Certificates Sold at the Border : </p><p>What does the policy cover?</p><p>The policy covers The Insured for any Third Party Liability that might be incurred in Mozambique caused by or in connection with any vehicle described in the certificate of insurance.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. What is happening currently :</p><p>Short Term Certificates Sold at the Border : </p><p>The cover extends to both:</p><p>Death or bodily injury to any third party, other than to a person employed by the Insured or arising from the course of employment or if the person is a member of the same household.</p><p>Damage to all property, other than that property that belongs to the Insured.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. What is happening currently:</p><p>Short Term Certificates Sold at the Border: </p><p>Why is it compulsory?</p><p>Mozambique does not have an MVA Road Accident Fund - as in South Africa.</p><p>In respect of foreign registered vehicles the Mozambican authorities need to be assured that if any liability is incurred by the use of such vehicles on their roads; there is a Mozambican Insurance Policy that is valid to cover liability costs.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. What is happening currently :</p><p>Short Term Certificates Sold at the Border : </p><p>How long is the period of insurance?</p><p>The certificate is valid for 30days from date of inception noted on the certificate or date of entry into Mozambique - Unless otherwise arranged with Insurer.</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. What is happening currently:</p><p>Short Term Certificates Sold at the Border: </p><p>What is the limit of liability?</p><p>Unless otherwise stated in respect of any one occurrence Liability shall not exceed the limit of R1,000,000.00 (one million SA Rand)</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>IV. What is happening currently :</p><p>Short Term Certificates Sold at the Border: </p><p>Pricing: </p><p>Pricing is standard across all insurers .</p></li><li><p>Compulsory Motor Third Party Liability Insurance</p><p>VI. Final notes: </p><p>Risk Assessement and Fleet Managment. </p><p> Underinsurance Risk to the transport company.</p><p>Not a legal assistance policy !</p><p> Managing the purchase of individual certificates. </p><p> Consider : Alternative forms of purchase </p><p> Annual cover / e-purchase. </p></li><li><p>Compulsory Motor Third Party Liability Insurance</p></li></ul>

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