House Debates Bill to Exempt JUTC from Third Party Risk


The House of Representatives yesterday (Dec. 1) began debate on a bill to validate the exemption of the Jamaica Urban Transit Company (JUTC) from the provisions of the Motor Vehicle Insurance (third party risks) Act from April 1, 2004 to November 20, 2008.
This is by virtue of the JUTC having established and maintained a self-insurance fund, effective April 1, 2004. Cabinet, in 2004, gave approval for the then Minister to exempt the company from the provisions of the Motor Vehicle Insurance Third Party Risk Act, as provided for under the Public Passenger Transport Kingston Metropolitan Transport Region Act.
Minister of Transport and Works, Hon. Michael Henry, explained that because the requisite order was not finalised by the then Minister, the Attorney General, last year advised that validating legislation would have to be passed by Parliament, for the insurance scheme, from the date of its inception to the date when the order was finally made. The legislation also indemnifies the Crown and those persons, who acted on behalf of the JUTC in good faith, in relation to the scheme.
Cabinet then approved the introduction of the necessary legislation to validate the self-insurance scheme, and issued drafting instructions to the Chief Parliamentary Counsel.
“An order was then made by me, for the JUTC to establish and maintain an insurance fund in accordance with the Motor Vehicle Insurance Third Party Risk Act as provided under section 14 of the Public Passenger Transport Kingston Metropolitan Transport Region Act effective November 21, 2008,” Mr. Henry told the House.
He informed that Cabinet had approved the insurance fund in 2003, as it was thought then that this would result in substantial savings to the JUTC and assist in making its operations more viable. “The JUTC was seeking to self-insure third party liability arising from the operation of the fleet of buses, with the exception of large catastrophic losses, which would be protected by excess of loss insurance,” he noted.
“The nature of a third party claim, particularly those involving serious bodily injuries, usually require lengthy process of investigation, information gathering and exchange thereof, negotiation, and in some cases due legal process, which may take years to finalise,” Mr. Henry pointed out.
The insurance scheme is monitored by a management team, comprising but not limited to, representatives from the Ministries responsible for finance and transport. Its responsibilities include: monitoring to ensure availability of a sum of money through regular monthly contributions for making good on all losses, damage, cost and expenses, which the company may suffer, incur or become liable to, or in connection with any risk against which the JUTC is required to be insured under the Motor Vehicle Insurance Third Party Risk Act.
The team also oversees the management of the scheme and ensures that the management of the fund is separate and external to the JUTC. It is mandated to direct annual actuarial review of the fund, and assess the recommendations of the actuary; make recommendations to the board and management of the JUTC in keeping with the requirements and the policy of the Ministry of Finance and the Public Service; direct and ensure that the fund is used exclusively for the settlement of damage, cost and expense, which the JUTC may suffer, incur, or become liable to under the Motor Vehicle Insurance Third Party Risk Act.
The committee has held seven meetings between January and November.

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