Mbalula appoints new RAF board, which has a R292bn headache

The newly appointed Road Accident Fund (RAF) board will have to get the ball rolling to turn the institution around and should pay attention to how the institution manages its fund, Transport Minister Fikile Mbalula has said.

Mbalula announced the new 12 members of the board in Pretoria on Thursday. Half of them are women. Two other female members will be announced in due course.

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The institution has not had enough money to cover all claims lodged against it, as it is sitting with an actuarial liability of R292 billion.

R17.2 billion in finalised claims is owed but these could not be settled.

An additional 189,000 opened claims were still to be finalised, Mbalula said.

However, the majority of cases were settled out of court.

In the 2018/19 financial year, 22,366 cases were allocated trial dates, but only 86 served before a judge.

“This means that in 99.6% of all the cases on the court roll, the RAF settled out of court. In addition to the settlement, the institution also had to pay the legal costs of the complainants, which amounted to R6.3 billion. This is an area the incoming board will have to pay serious attention to,” said Mbalula.

The RAF could save an annual R2.9 billion by beefing up their internal capacity by involving in-sourced legal work and directly employing attorneys to process the caseload.

Some of the board’s priorities include revisions of structure and business processes, an integrated claims assessment system to improve on performance management, revision of supply chain management structures and reduction in legal costs.

“We will conclude a shareholder compact with the board to set out the priorities for the remainder of the current financial year.”

“The Road Accident Benefit Scheme Bill is currently before parliament and we will work with parliament to expedite the passage of the bill and give impetus to the transformation of the fund from its current configuration,” added the minister.

– rorisangk@citizen.co.za

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