Only proper road safety will solve the RAF problem
The methods used to delay compensation and dubious accounting paint a rosier picture than is the case
I read Business Day’s editorial on the Road Accident Fund (RAF) with interest. The “improvement” by R300bn of the financial position of the RAF needs to be properly understood. This “saving” is the result of the manner in which the RAF’s contingent liability was calculated.
In the past and because the road traffic crash (RTC) compensation system was prior to 1986 insurance premium driven, the contingent liability was, after the system changed to fuel levy funding instead of by insurance premiums, calculated as if the RAF was a short-term insurance company, which it was not. This gave a skewed picture of the RAF’s contingent liability as the fuel levy was designed and meant to cover RTC personal injury liability on a pay as you go basis...
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