The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Insurers yesterday revealed there is mass public and industry confusion over whether Road Traffic Act reforms have taken effect amid suggestions 2025 could now be treated as a “transition year”.

Anton Saunders, RoyalStar Assurance’s managing director, told Tribune Business he had seen a draft amendment to the reforms - passed by Parliament last year - which would give both the insurance sector and public a further 12-month period in which to adjust to the changes. They would then take effect in 2026, but he emphasised that this has yet to be debated or passed by law-makers.

Meanwhile, Bruce Ferguson, president of Professional Insurance Consultants (PIC), an insurance brokerage, said he had seen a Road Traffic Department circular that referred solely to the new legal requirement that drivers must obtain a minimum six months’ coverage.

He told this newspaper he has interpreted this as a signal that only this aspect of the Road Traffic Act reforms, which were set to take full effect from January 1, 2025, have been implemented while other elements such as drivers taking out or renewing coverage in their birth month has been delayed.

Jobeth Coleby-Davis, minister of energy and transport, did not respond to Tribune Business messages seeking comment before press time last night. But Mr Saunders, reiterating that RoyalStar as a motor insurance underwriter is “in the total dark” and has “no clue” what to do in relation to the reforms, urged “someone in authority” to urgently clarify the rules that presently apply so all parties are “on the same page”.

“From our side, RoyalStar, we are in a state of confusion,” he disclosed. “I’ve seen an amendment to the amendments that has not been passed by Parliament yet, but is being circulated, where there’s going to be a transition period to next year. We’ve seen it, but it’s not been passed by Parliament.

“That is saying the status quo remains, but gives everyone time to adjust to the minimum six months’ coverage and to renew in your birth month. That is what we are hearing, what we have seen but that has not been passed by Parliament yet. What is the law and status quo right now, I cannot tell you.

“Someone needs to step forward and say: ‘These are the rules that have been implemented’ so we have clarity. No one has that clarity. It is so sad. It is communication; proper communication, from someone in authority. I can speak for RoyalStar. We are in the dark, total dark. We have no clue what to do right now. We have put all our system changes on hold. I’m guessing just like you. Say something to clarify.”

The Road Traffic Act reforms involve changes such as mandating 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 as part of a bid to crack down on the estimated 30-40 percent of Bahamian drivers who are uninsured.

Mr Saunders, though, said consumers are just as confused and uncertain as the Bahamian insurance industry over whether the reforms are in force wholly, in part or not at all. “For the general public, the issue is some people are going through and renewing their policies as is, while other people are being told other things,” he told Tribune Business.

“I think the Road Traffic Department is just as confused as everyone else. The agents are taking the brunt of the complaints. They are the ones who are the face, they are on the front line. Consumers are mad and have no clarity on what to do. Some are being asked to go to the Road Traffic Department twice.

“It is just that, in the 21st century, someone in authority has to communicate with us, communicate with Bahamians and say these are the rules we are following so that everyone is on the same page. Consumers are not happy. They are frustrated and taking it out on the agents. The agents are saying this is the law as we know it today.”

Mr Ferguson, meanwhile, said the confusion had resulted in Bahamian insurance brokers and agents receiving different guidance from different property and casualty underwriters as to how to implement the Road Traffic Act reforms. He lamented that this process had been left until “the last possible second” and the Christmas/New Year holiday period.

“It’s all very confusing,” he confirmed to Tribune Business. “We’ve had different comments and different instructions from different carriers. The Insurance Commission also chimed in with their own draft guidelines and the Bahamas Insurance Brokers Association (BIBA) replied to them. Without going into detail, a lot of it’s extremely unclear.

“They were draft guidelines, and the Commission gave the industry three days to reply over the Christmas holiday.” Mr Ferguson then revealed he had seen a Road Traffic Department circular that only mentioned the requirement that all auto insurance policies last for a minimum six months.

“They seem to be ignoring, at this stage, having to take out insurance in the same month as your birth,” he added. “We’ve already anticipated that will cause massive problems because people will not be able to afford insurance and licensing in the same month. All that suggests to us they are probably not doing that.

“It [the circular] advised there must be a minimum of six months’ cover from now on; nothing about the birth date. That, combined with the fact the Insurance Commission did not comment on the birth date issue, which could be the biggest problem for insurance companies as it could lead to more uninsured drivers, leads us to think it is not being enforced at this stage...

“In a nutshell, we are playing it by ear. Quite honestly, they’ve taken the most sensible approach at this stage because to do otherwise would cause absolute chaos and have the unintended effect of having more people uninsured.”

Describing the minimum six months’ coverage as “not a problem”, given that most auto insurance policies last for a year, Mr Ferguson said the Government might have been able to develop a better solution for cracking down on uninsured drivers had it consulted with the insurance sector in developing the reforms.

“They had the right idea, but it was the wrong way to go about it,” he added. “If the authorities had come to the industry before rushing to Parliament and rushing these amendments through, we could have told them that and come up with a good solution to reduce the number of uninsured drivers.”

“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.