Six companies sign MoU to create insurance pool for cross-border traffic
SIX of Cambodia's seven insurance companies have signed a memorandum of understanding to establish an insurance pool for cross-border travel to and from the Kingdom, industry officials confirmed Thursday.
The deal, signed on Tuesday, marks a further step towards the establishment of cross-border auto insurance following an ASEAN agreement from 2001. A government directive issued in March made it compulsory for vehicles crossing Cambodia's border to register third-party liability insurance.
Chhay Rattanak, chairman of the General Insurance Association of Cambodia (GIAC), the organisation that manages the scheme, said Thursday that the insurance policy would be launched at the beginning of next year at the latest.
"Cambodia has implemented it with Vietnam at Bavet ... and continues to negotiate with Thailand over the Poipet checkpoint, as well as with Laos," he said, adding that the initiative would help boost cross-border trade and tourism.
The number of border gates would prove a challenge in terms of managing the scheme, he said, with setup costs still under negotiation.
Differing insurance laws among Cambodia and its neighbours was another issue that had to be resolved, said In Meatra, the head of insurance at the Ministry of Economy and Finance. This includes differences between third-party, passenger and vehicle insurance. Those differences mean the passengers of a Cambodian vehicle that crashes abroad could return, but the vehicle would be impounded, according to current agreements and insurance regulations.
He said Thursday that Cambodia-Vietnam Insurance Company (CVIC) remained the only insurance company in the Kingdom not to sign on to the scheme because it had only been established last month.
"The MoU was prepared before [CIVC's] arrival.... It may join later," said In Meatra.
Infinity Insurance CEO David Carter said the pool would be equitable for all parties, meaning that risk, costs and revenues would be shared on a proportional basis.
"Infinity believes in and fully supports the cross-border motor vehicle insurance pool project as the best way to insure these types of risks," he said by email Thursday, adding that it would require close collaboration between the insurance sector, the GIAC and the government.
Currently, vehicles can only cross legally between Cambodia and Vietnam as part of an agreement that allows 150 vehicles across each day, said Chan Dara, deputy director general of the transport department at the Ministry of Public Works and Transport, even though agreements have been signed with all three of the Kingdom's neighbours.
An agreement was signed with Laos in April to permit 40 vehicles a day to cross, but problems on the Laotian side mean it is yet to be implemented, he added.
"As for Thailand, there is a deal, but it has not yet been enacted since we have had difficulties contacting the Thai side," said Chan Dara.