Yellow Card Insurance Scheme headache

March 29, 2017
| Report Focus News

Common Market for Eastern and Southern Africa (COMESA) countries are cracking their heads on how to revitalize the Yellow Card Insurance Scheme enacted by the bloc more than 30 years ago but has remained ineffective.

The Yellow Card is a regional motor vehicle insurance scheme that provides third party legal liability cover and compensation for medical expenses resulting from road traffic accidents on visiting motorists in any member state.

The Comesa Council of Ministers came up with the idea at its sixth meeting in Bujumbura, Burundi in July, 1985 when it agreed to have a compulsory Third Party Motor Vehicle Insurance Scheme, and the Protocol on establishment of the scheme was signed on December 4, 1986 in Addis Ababa, Ethiopia by 14 countries.
Insurance experts from the regional bloc are meeting in Victoria Falls to deliberate on ways of revitalizing the facility, which has been facing challenges over the years.
Some of the challenges include delays in settlement of claims by countries, low uptake, fraud as well as failure to harmonise laws by individual member states.
The strategic planning meeting, being attended by 11 countries Burundi, Djibouti, DRC, Ethiopia, Kenya, Malawi, Rwanda, South Sudan, Tanzania, Zambia and Zimbabwe, seeks to foster a way forward in dealing with these challenges

Speaking at the planning meeting, Zimbabwe Industry and Commerce Minister Mike Bimha, whose speech was read by director for International Trade in the Ministry Beatrice Mutetwa, challenged member states to urgently seek ways of revamping the scheme.

He said the Yellow Car Scheme is important in facilitating intra-regional transit traffic, trade and tourism.
“The Yellow Card Scheme has been widely accepted throughout COMESA region and beyond. This has greatly contributed to the facilitation of cross border movement of goods and persons within the region,” said the Minister.

He went on: “Yellow Card has made travelling easy but has faced challenges such as delays in settlement of claims for compensation of victims, limited utilization of the scheme, delays in computerization and differences in third party laws of member states among others.
“It’s therefore necessary for this meeting to address these challenges and come up with strategies that will bring efficiency and quality service in the region as we boost intra Africa trade.”

The Comesa Yellow Card recognizes member countries and their motorists, guaranteeing minimum insurance cover required by the laws of the country visited by travelling motorists.

Most importantly, is that one buys cover in one country and uses it for the entire period of travel around member states without paying at each border.
If involved in accident in any member country, one has to inform that country’s Yellow Card National Bureau which will handle the matter.
The facility now extends to Sadc states and over 180 insurance companies in the COMESA region are involved in the issuance of Yellow Cards and operations of the scheme.