SA’s new driving demerit system may affect insurance industry negatively

SA’s new driving demerit system may affect insurance industry negatively

- SA President, Cyril Ramaphosa, recently signed off on a new demerit system for the country’s drivers

- A report has surfaced suggesting that this new law may adversely affect the insurance industry

- The bill is also seeing opposition from the Organisation Undoing Tax Abuse (Outa), who claims that the system is just another way for the SA government to gather revenue

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South African President, Cyril Ramaphosa, approved a bill recently, which would have the country’s drivers punished on a demerit system.

The system would make sure that drivers who commit traffic offences would receive demerits, which, when added up, could result in the loss of a driver’s licence.

The bill has been met with controversy, particularly from insurance companies, who claim the system will affect their industry negatively, Fin24 reported.

Executive Head, Vera Nagtegaal, explained that the demerit system could unreasonably raise the insurance premiums of South African drivers.

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“The suspension of a motorist’s license is likely to increase their insurance premiums or excess, influenced by greater perceived risk on the insurer’s part,” Nagtegaal said.

Nagtegaal also commented on how energy is being misdirected into the implementation of the driving demerit system.

South Africa’s needs when it comes to traffic laws are around the education of drivers and pedestrians; our country has an extremely high number of pedestrian fatalities and this should be a bigger concern.

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“These campaigns have simply targeted motorists instead of incorporating education programmes also aimed at teaching pedestrians about road safety and taking responsibility for their individual conduct when making use of road facilities,” Nagtegaal stated.

The Organisation Undoing Tax Abuse (OUTA) has also expressed concern when it comes to the new driving demerit system, pointing out that this bill may just be a new way for the government to collect revenue while side-stepping real issues.

“The focus should be on road safety, not on an administratively complicated system aimed at collecting revenue,” OUTA explained.

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