A recent announcement that St. Maarten Roadside Services has been modified to Caribbean Accident and Roadside Service (CARS) and that insurance policyholders would be required to pay a NAf. 31 per year fee for its services has raised many eyebrows.
According to insurance consultant Cleveland Beresford, there is no valid jurisdiction by which consumers are obliged to pay this fee. The regulatory body for such decisions is the Central Bank of the Netherlands Antilles.
The Daily Herald contacted the Central Bank for clarity on its position on the announcement. A representative of the bank stated that the bank was indeed responsible for monitoring the insurance companies, but it had no control over their marketing.
In a joint press release, the insurance companies ASKA, ENNIA, New India, Gulf, FATUM and NAGICO explained that CARS had teamed up with the operating system Vision and local police authorities to enable accurate and timely capture of information to avoid fraud. The service will also assist in providing the authorities with tools for fighting crime and for dealing with repeat offenders on the road.
Beresford said that although this new initiative was placing the local insurance industry up to date with the rest of the world, it was not reinventing the wheel of roadside services and furthermore was not being exercised accurately.
He explained that in other countries the type of information CARS was being established to gather was entered in an information bank that was coordinated with the legal departments.
All the insurance companies have open access to the information with regard to accidents fed into this bank. Moreover, in terms of payment, parties representing the various insurance companies pay the price for the information extracted from this bank.
In the press release issued pertaining to CARS, it was explained that on the suppliers’ side, the insurance companies would partially absorb the costs involved, while on the consumers’ side there would be a mandatory administrative charge of NAf. 31 per year.
Beresford noted that there were insured motorists with no-claim discounts up to 60 per cent and administering such a fee, which would be charged to other parties who might be involved in accidents, would be unfair.
Moreover, he said that considering issues pertaining to the Treaty of Concordia, one question that arises, is how would the new service be applied to a French-side-insured driver who had an accident on the Dutch side. He said that until a good working relationship was established with the French side, a question remained as to how the French insurance companies would contribute to CARS.
The joint press release stated that policy owners would experience a completely new and improved level of service. Among these improvements are new service vehicles for CARS and a mobile unit outfitted with a desk to enable greater consumer comfort when filling out forms and collecting vehicle accident data at the scene of an accident.
On this note, Beresford said that based on the number of people insured, which was significant, it would have to be outlined how the fees accumulated would be equivalent to the operational expenses for CARS.
Furthermore, Beresford said, while CARS is a good initiative, there is a question as to whether it is a public or private company. He said that if it was a private company and assistance was needed from government or the insurance companies, a budget would have to be submitted at the end of each year.
Based on the number of accident claims every company incurs within the insurance bank, he suggested that a contribution be considered and, if insufficient, be based on the budget presented. Insurance companies would then be subsidised on a proportional basis.
Furthermore, he said, the number of insured parties each company has must be considered, as it would not be justified for the insurance company that had fewer or no accidents to be contributing the same amount.
Beresford emphasised that CARS would have to be transparent as to the expenditures involved and reiterated that this still could not oblige the insured party to pay a fee for the service. "You cannot at this stage dictate to people that it is obligatory," he stressed.