Motorists on Baillou Hill Road (Road Traffic Department)
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Bahamian insurers yesterday warned they and the Government are rapidly running out of time to resolve the “confusion” and uncertainty surrounding implementation of the new Road Traffic Act reforms.
Industry executives told Tribune Business there are “some administrative headaches” over how the legislative changes passed by Parliament earlier this year will be enacted in practice. They asserted that these issues must be addressed before the amendments take effect on January 1, 2025 - a deadline that is just six to seven weeks away.
Describing some of the reforms as “a heavy burden”, as they effectively make Bahamian property and casualty insurers responsible for policing uninsured drivers, they explained that among the unresolved issues is how to align clients with the Act’s new requirement that they renew coverage during their birth month.
This, from the Government’s perspective, is designed to ensure insurance policy renewals occur in the same month as persons licence their vehicle. This will act as another check by, in theory, forcing all drivers to ensure they have coverage otherwise their autos will not be licensed by the Road Traffic Department.
However, at present auto insurance policies are “all over the place” when it comes to being aligned with a driver’s birth month. And, while some clients may only require a two-three month extension to take coverage to the relevant month, insurance executives yesterday said this would potentially breach the Road Traffic (Amendment) Act 2024’s stipulation that policies must remain in force for a minimum six months.
This was identified as just one of the issues that needs to be resolved in the Government’s bid to crack down on the estimated 30-40 percent of Bahamian drivers who either lack, or possess inadequate, auto insurance coverage with the Royal Bahamas Police Force (RBPF) asserting that 50 percent of all traffic accidents involve uninsured vehicles.
Bruce Ferguson, president of Professional Insurance Consultants (PIC), told Tribune Business that brokers and agents such as himself are all waiting for “mandates” from the underwriters on whose behalf they issue policies - the likes of Bahamas First, RoyalStar Assurance and Security & General - over how to implement the Road Traffic Act reforms.
“It’s all rather unclear. It’s so confusing,” he disclosed. “We’re really awaiting confirmation from the insurers as to how we should handle the various changes. One of the biggest changes is people having to insure in the month of their birthday.
“We’ve only got another six weeks before it comes into force. The biggest concern for clients is that many like to stagger their payments throughout the year; they don’t like all their bills to fall into one month. They will now have to licence their vehicle in the month of their birthday, and insure it as well.
“It puts a big burden on people. A big concern is a lot of people will not have the money and will go uninsured. The Road Traffic Act is now saying there should be no insurance policy unless it’s intact for at least six months, but that begs the question who’s issuing six-month policies as that’s not the done thing in The Bahamas. We don’t issue any six-month policies; that’s only done in certain US states.”
Mr Ferguson said PIC has several clients who have already sought to renew their policies for just a few months to align with their birthday so as to get ahead of the reforms taking effect. “We’ve had clients already coming in and chopping and changing regarding renewal dates, and they’re only going to renew this to that month as that’s their birthday,” he added.
“That’s fair enough, but you may be jumping the gun because we don’t know how this is going to work in practice... The problem is that there hasn’t been a lot of dialogue and agreement between the industry and the Road Traffic Department. There’s been a couple of meetings, but I don’t think anything’s been decided. Suddenly the Act’s in place. What’s the position with all of that?
“It has been suggested that there may be some alterations, but that hasn’t happened yet. One can imagine there will be no differences come January 1. We have to meet that and assume it will be the law. We’re still waiting for insurers to to direct us on how we should handle certain aspects. That’s where we stand on the broker side.”
A senior insurance industry executive, speaking on condition of anonymity, said they understood that the Bahamas Insurance Association (BIA), the industry body, was in talks with the relevant government agencies such as the Ministry of Energy and Transport and Road Traffic Department to determine how implementation of the reforms will be handled.
“There are some quite complex issues in administering the legislation,” they said. “They’re in discussions to go through all the details. It’s going to create some administrative headaches that need to be addressed.”
The source identified the minimum six-month coverage requirement, and stipulation that policies be renewed in a person’s birth month, as especially challenging given that renewal dates are currently “all over the place” and not aligned with birthdays and vehicle licensing.
“All those policies fall due at different times,” the source said. “They’re going to have to extend the policies but they’re making you have a minimum six months of coverage. Some people extending their policies to their birthday won’t comply with the minimum six months’ coverage. They may only have to extend for three to four months. There are administrative issues involved with it.
“It’s quite a heavy burden on the insurance industry. They are putting the onus on the insurance industry to administer it. It’s quite tight, and the penalties are very onerous. There’s a lot of administrative issues, and the cancellation and collection of certificates and making sure Road Traffic is advised.
“It puts a lot more burden on the industry to comply with the legislation. We’ll go along with it, but it needs to be practical. It’s very tight.” The reforms mandate that an auto insurance policy can only be cancelled “within six months” of being issued if the subject vehicle is no longer roadworthy or has been sold to another person.
“A policy of insurance shall be renewable annually within the birth month of the insured person,” the Road Traffic (Amendment) Act 2024 stipulates. The “policy of insurance” definition includes a 90-day cover note, but this cannot be extended and no other ‘cover note’ can be obtained for the same vehicle for six months.
Persons cancelling their insurance must surrender the certificate to the insurer, with the latter having just 48 hours to inform the Road Traffic Controller of this and provide all relevant details on the client involved as well as the reasons for the cancellations. Failure to do so could result in the insurer being fined up to $5,000.
Comments
IslandWarrior 6 days, 18 hours ago
As DKT Bahamas, formerly known as PTI Bahamas, and now in partnership with Deutsche Kennzeichen Technik, we are committed to enhancing public services through innovative technological solutions. We recognize the urgent need to address the high incidence of uninsured vehicles on Bahamian roads. Our proposal for an Automated Insurance Verification System (AIVS) aims to drastically reduce this issue, ensuring compliance with national insurance policies and enhancing road safety for all citizens.
Despite previous proposals in 2021 and 2023, which were not adopted by either the PLP or FNM administrations, DKT Bahamas remains steadfast in our commitment to work alongside the government to implement a robust, efficient, and transparent system. We believe that the challenges posed by uninsured drivers, which contribute to increased risks and costs for all road users, require a modern and proactive approach.
Our proposed AIVS would offer real-time insurance status checks, seamlessly integrated with existing governmental databases, to ensure all vehicles on the road are adequately insured. This system would not only streamline the process of insurance verification but also significantly reduce the potential for corruption and inefficiency within the Road Traffic Department by minimizing human intervention in the verification process.
Additionally, with DKT's expertise, we are enhancing our services to include advanced vehicle registration, precise vehicle identification, high-security production of registration plates, and comprehensive security features. These advancements are integral to our strategy to provide a comprehensive solution that addresses multiple facets of vehicle management and compliance.
DKT Bahamas is prepared to explore partnerships under a Public-Private Partnership (PPP) model, allowing for shared responsibilities and risks, thereby alleviating the financial burden on the state and ensuring the sustainability and effectiveness of the initiative.
We urge both the government and the public to support this initiative, which promises to enhance compliance, reduce administrative burdens, and most importantly, increase safety on our roads. DKT Bahamas is committed to delivering a system that is not only technologically advanced but also accessible and easy to use, ensuring that it benefits all stakeholders involved.
We look forward to constructive dialogue and a collaborative approach to resolve this pressing issue once and for all.
ohdrap4 6 days, 18 hours ago
Is this another copy and pasted app that returns null results?
I already pay enough fees and taxes, so nope can't support you.
You need to contact the right family, friend or lover and ask for their support.
IslandWarrior 6 days, 13 hours ago
Response to Public Feedback on DKT Bahamas' Proposed Vehicle Identification and Compliance System
Thank you for your feedback and concerns regarding the new vehicle control and secure system proposed by DKT Bahamas. We understand that changes in public systems can be met with apprehension, and we aim to address these concerns transparently.
Concern About Additional Fees and Taxes:
Clarification of Costs: The intention behind the Automated Insurance Verification System (AIVS) is not to impose new taxes or fees on vehicle owners but to reduce the overall costs associated with uninsured drivers and improve road safety. By ensuring all vehicles are insured and compliant with the law, the system aims to lower the risk and costs of accidents, which often fall on compliant drivers and insurance companies to cover. This, in turn, could potentially stabilize or reduce insurance premiums over time.
Concern About System Effectiveness:
Technology and Results: The proposed system is far from a "copy and pasted app that returns null results." It is a robust integration of advanced RFID technology, mobile applications, and a centralized database that has been tailored to address specific challenges in the Bahamas, such as uninsured driving and vehicle fraud. We commit to ongoing updates and improvements based on real-world performance and feedback. Suggestion of Improper Influence:
Commitment to Integrity: DKT Bahamas is dedicated to maintaining the highest standards of ethics and transparency in all our proposals and implementations. We work in close collaboration with government agencies and stakeholders through transparent and regulated channels to ensure that our solutions serve the public interest without any undue influence. Public Involvement and Support:
Engagement and Dialogue: We encourage continued public dialogue and feedback such as yours, which is vital for shaping policies and systems that are in the best interest of all Bahamians. We are committed to engaging with the community, explaining the benefits of the system, and addressing any concerns through public forums, educational campaigns, and direct communications.
We invite all community members to join us in constructive discussions on how we can collectively enhance road safety and regulatory compliance in the Bahamas. Our goal is to create a safer, more efficient vehicular environment that benefits everyone, reducing the burden of uninsured driving and enhancing the effectiveness of law enforcement.
Thank you again for your feedback. We are listening and are here to work together to make positive changes for our community.
whatsup 18 hours, 35 minutes ago
EXACTLY
Dawes 6 days, 17 hours ago
Another policy from Government where they get the private sector to do the job the Government should do. All along Government increase their fees and do nothing to reduce their expenditures.
IslandWarrior 6 days, 14 hours ago
Uninsured drivers are just one aspect of the broader criminal culture that has taken hold in The Bahamas, making everyday life increasingly unsafe and uncertain. As this issue worsens, we are left to wonder what will come next. The lack of accountability on our roads reflects deeper problems in our society, where the rule of law is being tested and the sense of security is slipping away. We must acknowledge these realities and take urgent action to reverse the trend before living in our country becomes even more dangerous.
becks 6 days, 16 hours ago
I really don’t understand what the complication is for the auto insurers. My birth month is November and my car insurance renews in December. I went in to renew my insurance last week and asked them to just change the dates to align with the new government policy…..they refused…idiotic.
ThisIsOurs 6 days, 16 hours ago
They cant do that. The dates have to align with your insurance policy. What the insurance companies should have done and still can do, i.e., should be doing is, allow persons to purchase insurance up to their birthdate then thereafter purchase 6month or annual contracts. Or issue a new contract at birthdate crediting the prorated balance from the old policy.
ohdrap4 6 days, 15 hours ago
mine is up on the 31st before my birthday. i will leave the car uninsured for one day and renew the next day.
my husband is off by 9 months and the insurance company left it in.
ThisIsOurs 6 days, 4 hours ago
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ThisIsOurs 6 days, 3 hours ago
Not so much the insurance company, but "Road Traffic". Road Traffic has to log the date of the insurance policy. So if you went into them today with your new policy that starts tomorrow, theyd reject it. Its nonsensical, but that's what happens when companies digitize, spend millions on software but dont actually test systems against real world scenarios. This is very common. Testing takes times, needs time to plan, resources to do it and costs money so most companies dont, they cross their fingers and pray for the best, make statements like, nothing is perfect or do "something" to pretend like they did it. Then they spend the next five years trying to work around all the problems they introduced
No better example than the insurance company that lost millions on newly installed improperly tested software that couldnt efficiently process claims. I believe it was Bahamas First
May 2024 Tribune article by Neil Hartnell: "Bahamas First's Cayman subsidiary has been plagued with problems stemming from delays in processing claims as a result of introducing a new information technology (IT) system. Ms Treco conceded this had resulted in "a loss of business", with the improvements and corrections made unlikely to be fully felt until Bahamas First's 2025 financial year.
becks 5 days, 16 hours ago
Silly system. I renewed my car license last week for 2025. My car insurance expires on December 10th. In past years I would have renew my insurance last week before going to road traffic…this year the insurance company told me no…I have to wait to renew my insurance until December.
M0J0 5 days, 23 hours ago
The whole stupidity in this situation is how can you make up rules but do not amend the road traffic act which is the law. Asking for a friend.
ExposedU2C 2 days, 14 hours ago
Who the hell pays exorbitant insurance premiums for a vehicle these days?! You're much better off saving your hard earned money so that you can hire the right kind of politically connected lawyer who can get your case heard by the right kind of politically connected judge if you ever get sued in a civil action. LOL
whatsup 18 hours, 33 minutes ago
Sounds about right
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