The Insurance Regulatory Authority (IRA) has been using a reward system for the sake of reducing motor insurance fraud. In light of a series of losses made by the vehicle insurance industry, the Authority has decided to introduce a non claims discount for careful drivers.
The IRA also employed the use of an anti-fraud police unit in order to curb the problem late. Speaking during the official launch of the unit last year, Police Commissioner Mathew Iteere noted that an accident involving a 14-seater matatu would have over 60 people claiming compensation. The IRA has since made plans to train officers in order to detect motor fraud. According to the Authority’s CEO, Sammy Makove, the regulator has increased its budget for this year in order to focus on fraud detection.
In response to this, the Ministry of Finance has since decided to allocate KES 300 million to the National Police Service Commission in order to ensure effectiveness and accountability of the police force in this and other sectors. The money is part of the 2012/2013 budget.
The IRA hopes that the motor insurance discounts will play a major role in reducing cases of fraud in the industry. The regulator states that the reward package will only apply to drivers who avoid insurance claims for at least one year. This comes shortly after Gateway launched its Pay As You Drive insurance package.