KHAYA SITHOLE: Only a revised business model will cure RAF’s problems
Road Accident Fund does not have the protections of a traditional insurance agency
The Road Accident Fund (RAF) — saddled with the burdensome mandate of covering road accidents in a country where compliance with the rules of the road is marginal and load-shedding creates eternal chaos at traffic lights — finds itself in the crosshairs on multiple fronts.
For a start, the fund is keen to shift from an insurance accounting standard to a social benefits accounting standard. The upside for the RAF would be that rather than reflecting liabilities of over R330bn in its financial statements due to the rules of the insurance accounting standard, it would have the more elegant option of the social benefits standard, which results in only R30bn in liabilities...
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