BMA to hold public forum on motor insurance

The BMA will hold a 'public hearing' to discuss the proposed new structure, on 29th December 2003.

The aim of the event is to have an open discussion with concerned parties and those representing the public, to explain the proposed tariff structure and to address any other concerns related to third party motor insurance.

The final draft of the new tariff structure, being prepared by BMA's Directorate of Insurance Supervision, will take into account any positive suggestions made or concerns raised at the event.

"The public hearing is aimed at gauging public opinion on the new tariff structure and to give relevant parties an opportunity to comment on it, prior to its finalisation," said Mr. Anwar Khalifa Al Sadah, Executive Director, Financial Institutions Supervision, at the BMA.

"We do not believe that such an issue, affecting a large section of the public, should be decided behind closed doors."

The BMA has invited members of Parliament's Economic Affairs Committee, representatives of the Consumer Protection Society and Bahrain Transparency Society, as well as members of the media, to participate in the public hearing.

Panelists, alongside the BMA, will also include representatives of organizations, which have a stake in implementing the tariffs, namely the Bahrain Insurance Association (BIA) and the Traffic and Licensing Directorate.

Mr. Al Sadah said there was a need to revise the existing tariff structure, in order to reward good drivers and penalize only the bad ones.

The existing tariff structure, which was introduced in 1995, set a maximum ceiling on third party motor rates, with insurance companies free to voluntarily give discounts to good drivers.

"What is happening now is that insurance companies have dispensed with the practice of giving discounts and are imposing the maximum rate on all drivers," said Mr. Tawfiq Shehab, Director, Insurance Supervision, at the BMA.

"We feel there is a need to bring about a certain fairness in the system, to encourage people to be good drivers."

The situation on Bahrain's roads is changing dramatically, with traffic congestion and fatalities on the rise every year, he noted.

According to official statistics, the number of registered vehicles has grown 40% in the last seven years, from 179,732 in 1996 to 250,978 in 2002.

The number of fatalities, arising from road accidents, has increased 42% to 81 in 2002, from 57 in 1996.

"We believe there is a very important social benefit to be derived from a tariff system that rewards good and safe drivers, since society, as a whole, has a stake in making the roads safer and we all have to work together to achieve this objective," said Mr. Shehab.