MVA takes quantum leap of faith
The Motor Vehicle Accident Fund has unveiled an ambitious five-year plan that should see it move from its current technically insolvent position to a solvent position.
In a recent presentation to journalists, MVA Fund Chief Financial Officer, James Nyandoro outlined plans that, if implemented successfully, will see the fund turn its loss-making operations into a surplus. In the 2010/11 financial year, the Fund recorded a deficit of N$38 million bringing the accumulated deficit since the Fund’s inception in 2004 to a staggering N$542 million.
Despite the gloomy picture, the fund expects to make a surplus of N$91 million from its operations by the year 2017. As a part of this turn-around programme, a number of proposals have been put forward. These include the approval of legislative amendments to remove the injury grant as a benefit to accident victims which the fund says will minimise fraudulent claims. About 50 suspected cases are currently under investigation for fraudulent claims associated with the injury grant.
Nyandoro believes the removal of the injury grant will save the fund N$40 million annually and increase the chance of a speedy recovery while ensuring a comprehensive rehabilitation of accident victims. The MVA Fund says there is a general belief by victims that the sicker they appear, the more money they will get from the fund.
Other legislative amendments include the introduction of surcharges on the annual registration of vehicles in the country and foreign registered vehicles entering Namibia as well as the limitation of people allowed to travel on the back of a bakkie.
Nyandoro attributed the bad financial position of the fund to the settlement of the claim where three Belgian tourists were killed in a road accident involving former world boxing champion, Harry Simon. The tourists’ claims has so far increased the liabilities of the fund by N$150 million which is likely to increase to around N$250 million when the claim is finally settled in full.
A high number of litigations costing the fund N$46 million and high hospitalisation costs have also contributed to the fund’s growing liabilities.