High Noon for the Road Accident Fund (Part 2)

Road accident fund

High Noon for the Road Accident Fund (Part 2)

 

“The other alternative is always to turn this fund around to match the requirements.”

 

Cooper said it had been a “very imperfect system” and it needed to be altered into a societal benefit system. “If we can turn across the fund, there will be no demand for Satchwell’s recommendations, where no one understands the actual price of the system indicated.”

 

A Financial Services Board report this week, however, said the tips of the 2002 Satchwell commission of inquiry “must certainly be discussed at ministerial level and bold conclusions must certainly be taken” to execute a fresh road mishap benefit scheme “as soon as possible”.

 

Within the routine study to the fund tabled in parliament, Jeff van Rooyen, the executive officer and registrar of short-term insurance at the Financial Services Board, said the RAF’s collected deficit stood at R23million by the end of March last year compared with R16million in the preceding year. It was stated technically insolvent last year.

 

“With no sign that the deteriorating tendency will subside… the truth is the RAF is certainly on the brink of complete bankruptcy and fiscal recovery seems hopeless,” Van Rooyen said.

 

Claims paid to individuals injured in road accidents rose 23 percent to R3,1-billion

 

last year, while provision for outstanding claims rose 32 percent to R23,8-billion. Interim measures to stabilise the fund promptly contain a weekly, rather than daily, payout, a fresh verification system, “a very serious highlevel audit and extensive forensic audit by external agencies”, freezing of contracts, a moratorium on offerings to sufferers and “stakeholder engagement”.

 

“We expect certain things will incite lots of controversy, therefore there’s a demand for public help to obviate pricey remedies,” Cooper described.

 

A bill proposing a dramatically decreased benefit scheme was thrown out of parliament this past year due to the effect it might have on inferior and badly wounded accident victims.

 

Following the Cape Town meeting, Dean Lester, the representative for the South African Association of Personal Injury Lawyers, welcomed efforts to improve relations with service providers. “Most large payments end in summonses against the RAF and are settled in the court measures,” he said, “because they’re constantly trying to underpay. To prevent this means literally retraining RAF staff to solve issues out of court.”

 

He warned that not an excessive amount of emphasis must be given to fraud while incompetence and mismanagement of systems and RAF staff were disregarded.

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