MUSCAT -- Motor insurance providers have welcomed the Orange Card Auto Insurance Scheme as a significant step in addressing the often protracted delays and hassles associated with the settlement of cross-border accident claims. The scheme, which came into effect in the Sultanate on September 1, requires motorists crossing national borders to obtain an 'Orange Card' as insurance cover on their vehicles. It does away with the longstanding practice by insurance companies of endorsing geographic extensions on the motor insurance policies of their clients seeking coverage during cross-border travel.
"The Orange Card scheme will be beneficial to the insured parties, as it establishes a well-defined system for the speedy settlement of accident claims. It also eliminates the delays and cumbersome formalities that the insured and third party claimants tend to face when cross-border accident claims are being processed," commented Dr J Retnakumar, Resident Manager -- The New India Assurance Company.
The Orange Card System was instituted by the General Arab Insurance Federation (GAIF), a pan-Arab body whose aim is to promote interactions between the insurance sectors in the Arab states, as well as to stimulate the growth of the insurance industry in general. Around 20 Arab League countries, including the Sultanate of Oman, are members of GAIF, which was established in 1964 following a call by leading Arab insurance firms for an umbrella grouping to advance its collective interests.
GAIF launched the Orange Card system following an agreement concluded by Arab states in Tunisia in 1975 allowing the free movement of vehicles across borders. Oman was among the first countries to ratify the agreement with the promulgation of Royal Decree 50/1977. Under the Orange Card system, each member state agrees to set up a Unified Office for the Orange Card, which administers the scheme within that country. It also co-ordinates claim settlement procedures with their counterparts in other member states.
Thus, Oman-registered vehicles with Third Party insurance coverage must mandatorily obtain an Orange Card before crossing national borders. In Oman, Orange Cards can be obtained from one of eight insurance companies that have met GAIF criteria to be part of the Orange Card Agreement, and duly approved by the Capital Market Authority (CMA).
They are Dhofar Insurance, Oman United Insurance, Ahlia Insurance, Al Madinah Al Khalijiyah Insurance, Omani-Qatari Insurance, Muscat Insurance, Falcon Insurance, and Vision Insurance. Other insurers can obtain their requirements of Orange Cards from any of the eight approved firms. In the event of an accident abroad involving a Third Party claim, the claim will be processed by the Unified Office of the Orange Card in that country in co-ordination with its counterpart in the Sultanate.
The latter in turn will inform the insurer of the vehicle in Oman. According to industry experts, the new scheme will streamline cross-border claim settlement procedures at a time when traffic accidents are on the increase. Third Party victims in particular can hope to have their claims settled rapidly through the intervention of the local Unified Office.
By Conrad Prabhu
© Oman Daily Observer 2008
