The Insurance Fund Administration Service (IFAS) is set to introduce a new arrangement at the end of 2021, compelling health institutions to treat those injured in road accidents for up to 40,000 Br. As it stands, health facilities provide emergency treatment costing up to 2,000 Br as part of the third-party motor insurance policy while victims are expected to cover additional expenses or wait for claim compensation from insurance companies to cover costs up to 40,000 Br.
The Fund pays compensation for accidents that occurred by uninsured vehicles or if the injury involves hit-and-run crime. Last year, IFAS paid one million Birr to health institutions and 38 victims as compensation for injury, death and property damage.
“Many aren't getting the medical attention they need because the costs are beyond the limit specified by law,” said Adel Abdulahi, head of operations at IFAS.
However, administrators of health institutions are unhappy collecting compensations from insurance companies, and the IFAS can take considerable time.
Teklehaimanot General Hospital is yet to be paid for the services it provided last year, according to its representative, who attended a consultative meeting IFAS officials held on Wednesday, November 10, 2021, at the Capital Hotel on Haile Gebreselassie Avenue.
Health institutions and victims receive compensation from insurance companies when injuries are caused by vehicles insured. Insurance firms pay within a few days of claims filed before their agents, supported by doctors' notes, according to Abraham Mersha, deputy CEO of Nib Insurance.
Last year, 18 insurance companies collected 855 million Br in premiums from third-party policies while paying out half a billion Birr in claims. Executives of insurance firms blame the "insufficient" premium rates applicable to the industry for the loss ratio for the third-party policy that reaches 100pc.
Officials of the IFAS are revising the premium rates, with recommendations to amend the proclamation that governs third-party insurance policy, people familiar with the process disclosed to Fortune. If it passes, the amendment will be the first since a proclamation was enacted nine years ago. The annual premium rates range between 188 Br and 2,700 Br depending on the type of vehicle, and the amount of compensation for death or injury stands at 40,000 Br. In damage to property, compensation can reach up to 100,000 Br.
Although the adjustment is expected to significantly raise compensations and premium rates, officials say nothing is certain until the financial cost of risk and uncertainty is analysed. Two consulting firms are bidding to win the contract to study the options for revising premiums and compensations.
The new arrangement will also be part of the amendment, Adel disclosed.
PUBLISHED ON
Nov 13,2021 [ VOL
22 , NO
1124]
Fortune News | May 29,2021
Fortune News | Jan 22,2022
Radar | Feb 08,2020
Sunday with Eden | May 11,2019
Radar | Mar 26,2022
Dec 22 , 2024 . By TIZITA SHEWAFERAW
Charged with transforming colossal state-owned enterprises into modern and competitiv...
Aug 18 , 2024 . By AKSAH ITALO
Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...
Jul 28 , 2024 . By TIZITA SHEWAFERAW
Unhabitual, perhaps too many, Samuel Gebreyohannes, 38, used to occasionally enjoy a couple of beers at breakfast. However, he recently swit...
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transporting commodities, and f...
Jul 12 , 2025
Political leaders and their policy advisors often promise great leaps forward, yet th...
Jul 5 , 2025
Six years ago, Ethiopia was the darling of international liberal commentators. A year...
Jun 28 , 2025
Meseret Damtie, the assertive auditor general, has never been shy about naming names...
Jun 21 , 2025
A well-worn adage says, “Budget is not destiny, but it is direction.” Examining t...
Loading your updates...