AKI rebuffs car racket claims

September 23, 2008 12:00 am

, NAIROBI, September 23 – The Association of Kenya Insurers on Monday denied claims it was to blame for a double registration racket involving buyers of salvage vehicles who collude with criminals.

The association’s chairman Tom Gichuhi said although insurance firms issue logbooks and transfer forms to salvage buyers, they were not obligated, in any way, to establish what the buyers do with the documents.

Mr Gichuhi, was reacting to last week’s claims by the Registrar of Motor Vehicles Simon Ole Kirgotty that insurance firms were flouting the law by failing to return log books and number plates of written-off vehicles to the Kenya Revenue Authority for de-registration.

“We have not flouted any existing law or regulation. What Kirgotty is talking about is a law that is yet to be implemented. It was only amended this year and comes to effect in January 2009,” he said.

In an interview with Capital News, Mr Gichuhi said the insurance firms were permitted by law to issue logbooks and transfer forms to salvage vehicle buyers to allow them hold proof of ownership.

Mr Kirgotty had pointed an accusing finger at the insurers of failing to return log books and registration number plates to the KRA, which made it easy for buyers to misuse them in registering stolen vehicles.

Mr Gichuhi said he had noted with concern the allegations by Mr Kirgotty whom he in turn accused of pre-empting their discussions and contents of the proposed change to the law.

“He cannot pretend that he is not aware that the law in question has not been effected. And therefore, we cannot be blamed for failing to comply with a non-existent law,” he said.

Once effected, the law will require all insurance companies to return log books and number plates of written off vehicles otherwise known as salvages to the KRA for de-registration.

Mr Gichuhi revealed that he had been holding talks with Mr Kirgotty on the best way to implement it.

Some of the key issues that have been under discussion include getting a clear definition of what a write-off vehicle is, to enable insurance firms and the KRA enforce the law.

There is also the question of the kind of document that would be issued to salvage vehicle buyers once the law requiring insurance firms to return log books to KRA goes into force.

The two had agreed to have a desk established at the KRA to receive the plate numbers and log books from insurance firms.

“These are some of the issues we have been deliberating on and have already signed a memorandum of understanding with KRA on how to implement the law. This MOU has been lying at KRA awaiting a signature, so we cannot be blamed at all,” he said.

Comprehensive insurance policy holders are required to surrender their log books to their insurance firm’s once they are compensated in addition to signing blank transfer forms which insurance firms issue to buyers of the salvage vehicles to facilitate transfer to new owners.

“This is what we have been doing and there is nothing wrong with it. There is no way we can sell salvage to someone and fail to give him or her documents to proof ownership. Whatever he or she does with these documents or logbooks is none of our business,” he said.

Regarding establishing a data base for all insurance companies and insured vehicles, Mr Gichuhi said his office was considering establishing one to avoid double insurance and added that there were cases where motorists insure their vehicles with two or more insurance companies in order to double-claim in case of an accident.

In an interview with Mr Kirgotty last week, he had indicated that he had ordered AKI to establish a database to enable them detect people who insure vehicles twice, sometimes using the same number plate with two different vehicles.

“It is not him to order us. He is not under any obligation to give us such orders. We have been planning to do this but it is not for their benefit, it is aimed at curbing double insurance from people out to fleece our industry,” Mr Gichuhi said.


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