THE ENFORCEABILITY OF MOTOR VEHICLE INSURANCE IN CAMEROON
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This project has five chapters and it focuses on the enforceability of motor vehicle insurance in Cameroon. Chapter one consists of a general introduction, statement of the problem, objectives, significance, and justifications of the study, research methodology, research questions, synopsis of chapters, and definition of key terms. Chapter two focuses on the evolution of motor vehicle insurance in Cameroon. Chapter three focuses on legal instruments and institutions for the enforceability of motor vehicle insurance in Cameroon. Chapter four consists of problems faced in the enforcement of motor vehicle insurance in Cameroon. Lastly, chapter five is a summary of findings, recommendations, and conclusion.
BACKGROUND TO THE STUDY
The laws of England, France, and Cameroon have responded to the demands of our daily life by looking for ways in which one can react to the present changing economic and social conditions. The increased number of death and injuries made the legislatures see the need for motor vehicle insurance to be a necessity. The best remedy was to make motor vehicle insurance compulsory for all motorists to be insured so that those involved in motor accidents have adequate compensation.
The introduction of compulsory motor insurance led to great criticism during the early twentieth century. This was because of the fear of state intervention in the professional organizations hence the hostile reaction from insurers against the idea of compulsory motor insurance.
In England, the public was in support of government intervention to introduce measures to reduce the tragic effects of road traffic accidents.
The Royal Commission on transport inquired in 1929. In its report, it suggested that the Minister of Transport should make sure that motor vehicle is compulsory to ensure that victims of road accidents are well compensated. The minister on his part consulted the Association of British Insurers who were against the idea. The British insurers were afraid of state control over their industry. They express the fear of undesirable risks, which might lead to heavy losses. These losses might push them to increase the rate of premium; this situation might not be hard only on them but on the insurance companies themselves
Despite the opposition, the legislators made insurance against motor liability compulsory. The British Traffic Act 1930 introduced compulsory insurance. This was the beginning of the protection of third parties. Compulsory insurance alone could not achieve this, thus it was followed by legislation to protect third parties against insolvency of the insured or insurer and certain conditions in policies. Finally, in 1946 the Motor Insurer’s Bureau was created to fulfill this function.
In the case of France, the introduction of compulsory insurance at first did not succeed. In 1935 it was introduced to public transport vehicles and racing drivers. The idea to extend this scope to others was highly resisted. The main reason was that it was against the freedom of an individual to compel a person to insure and the insurer would be denied their freedom to select risks. Third-party protection was developed in another way. The government instead preferred to protect the public against insolvent insurers. This was achieved in 1938 which regulated the insurance industry. On the other hand, opinions were in favor of the creation of a motor guarantee fund. This was evident in 1951 when the finance law No.1508 of 31 December 1951 in France, establish the Fonds de Garantie Automobile in its article 15. Later, however, the financial deficit of the fund rendered the law on compulsory motor insurance inevitable. Compulsory insurance was introduced for all motorists in 1958 by-law No.208 of February 1958 and Decree No.59-135 of 7 January 1959.
Compulsory insurance was first introduced in early West Africa. The British legislation was extended to four West African countries that are Nigeria by the motor vehicle (third party insurance) Act 1945; Gambia, by the motor vehicle (third party insurance) Ordinance 1948; Ghana by the motor vehicle (third party insurance) Ordinance 1949 as amended in 1960; Sierra Leone, by motor vehicle (third party insurance) Ordinance 1949. Cameroon later introduced compulsory motor insurance by law No.65-LF-9 of 22 May 1965. As in West African countries the main reason for this is to ensure that money is available to compensate the innocent victims injured or killed in road accidents whatever may be the financial position of the tortfeasor, that is, the negligent motorist.
STATEMENT OF THE PROBLEM
Insurance in Cameroon is regulated by La Conference InterAfricain des Marches d’Assurance known in English as the Inter African Insurance Market Conference (CIMA) which came into force in February 1995 and comprises fourteen African states. There are two main types of insurance: life insurance and non-life insurance. Their objectives are at making sure that the insured is compensated after the occurrence of a loss or risk. Nevertheless, there are several insurance policies and equally different types of consumers which are: fire insurance consumers, marine insurance consumers, life policyholders amongst which are motor insurance consumers which is our focus in this research.
One can still despite the existence of insurance and their stands towards the enforceability of motor insurance, questions their effectiveness because most insurance scholars have reviewed that insurance contract is contracts of adhesion. This is so because a typical purchaser has little or no power to negotiate the price and the terms of the insurance policy, he can only choose the kind and the amount of coverage. Thus it raises the need of the researchers to know how insurance company enforces motor insurance.
Furthermore, corruption and fraud in Cameroon is another problem faced by not only motor insurance consumers but also by the insurer. It is problem faced by the insurer in the sense that some insured sometimes intentionally give falsified information about the property he intends to insure (bad faith). This is the reason why good faith is one of the most important elements of an insurance contract. As for corruption, most police and gendarme officers doing routine checks on vehicles on the road collect bribes from the uninsured motorist and allow them to ply on the road without an insurance cover. Nevertheless, our main concern here is to find out how motor insurance is enforced in Cameroon despite the unfair and fraudulent practice of motor insurance in Cameroon and the adhesive nature of motor insurance contract.
OBJECTIVES OF THE STUDY
- The main objective of this study is to examine how motor vehicle insurance is being enforced in Cameroon.
The specific objectives include:
- Identifying the legal and institutional framework towards the enforceability of motor vehicle insurance in Cameroon.
- Analyzing the problems towards the enforceability of motor vehicle insurance in Cameroon
- Making recommendations.
- How effective is the enforceability of motor vehicle insurance in Cameroon?
- What are the various legal and institutional bodies that are put in place for the enforceability of motor vehicle insurance in Cameroon?
- How effective are the legal and institutional bodies?
- What are the various problems that hinder the enforceability of motor vehicle insurance in Cameroon?
- What recommendations can be made as concerns the enforceability of motor vehicle insurance?