LSK Raises Flag Over New Insurance Law

The Law Society of Kenya ( LSK) has challenged the unconstitutionality of a new insurance law.

LSK Secretary Apollo Mboya said the Society has instructed Lawyer Fred Ngatia to file a suit challenging The Insurance (Motor Vehicle, Third Party Risks), Amendment Act, 2013.

“We ( LSK) are against the new insurance law that caps damages to Sh3 million in respect to passengers in motor vehicle accidents,” Mr. Mboya said.

He said that President Uhuru Kenyatta assented to the law on December 24th last year despite representation to him and Parliament.

Mr. Mboya said that the new law would deny accident victims the right to choose between the scheme and litigation and also undervalue certain degrees of disablement.

“The scheme is designed in such a manner as to deny victims legal representation as matter of right,” Mr. Mboya said.

The Insurance (Motor Vehicle, Third Party Risks), Amendment Bill, 2013 amended the Insurance (Motor Vehicle Third Party Risks), Act Cap 405 and thereby introduced a Schedule of structured payment of compensation under the Act similar to the Work Injury Benefits Act providing a maximum compensation in respect of death or fixed compensation for each body part based on individual income levels, nature and extent of injury sustained among others.

The Finance Minister in 2009, through a Gazette Notice introduced Section 5(b) to the Insurance (Motor Vehicle Third Party Risks), Act capping damages to Sh3 million in respect to passengers in any motor vehicle whether Private, PSV or Commercial.

“The Amendment will not serve the best interest of the public and continuously require review of the compensation amounts taking into account inflationary factors” Mr. Mboya said.

Mr. Mboya said that courts are still awarding more than Sh3 million as damages since majority of insured/clients were exposed to execution for over and above the amount. “Insurance companies increased premiums for anyone who proposes cover in excess of the Sh3 million for passengers injured or death caused by the insured motor vehicle,” Mr. Mboya said.

The Secretary/CEO said that the change in law remains unconstitutional and the Society has instructed Lawyer Fred Ngatia to challenge it in court on that basis.