5.

MOTOR INSURANCE CLAIMS MANUAL

1. POLICY

1.1. SERVICE PHILOSOPHY/MISSION

1.1.1. UNIC-ETHIOPIA strives to be the best Insurance Company in the

country. It recognizes that providing honest, prompt and courteous
claims services to its customers is the single most important success
factor in achieving this mission.

At UNIC-ETHIOPIA, We know that the time our customer needs his/her

insurance most is when he/she has a claim!

To ensure prompt, fair and efficient delivery of claims services to third

party claimants within the parameters of obligatory motor third party
insurance coverage.

1.1.2. The Company is thus committed to provide a prompt, fair and honest
service to its clients. To this end UNIC-ETHIOPIA recognizes that the
quality of its services depends on:

 The quality of its staff – the company, therefore, will continue to

invest to raise the level of professionalism in its people.

 The capacity and strength of its partners- the Company thus

employs the services of suppliers with adequate capital, physical
and technical capacity.

1.1.3. All employees of the Company, particularly the claims personnel shall
diligently strive towards the achievement of the Company's service
philosophy; treat all clients of the Company and third party claimants
with respect and courtesy.

1.2. NOTIFICATION AND VERIFICATION OF CLAIMS

1.2.1. Notification of a claim shall be the responsibility of the insured or

his/her legal representative and immediate notification is required. All

1
 incidents irrespective of whether they are covered under the relevant
policy or not have to be reported in a reasonable time.

1.2.2. Claims shall be investigated, handled and processed only after verifying
and ascertaining that the notified claim is in conformity with the type of
cover provided and the vehicle insured; and that the accident is within
the period of insurance.

1.2.3. A claim occurring outside the area of the Addis Ababa may be intimated
to the nearest outlying Branch which will act as a liaison office
concerning the claim.

1.2.3.1. The outlying Branches may be authorized by Manager, Claims

Division/Operations Department to fully or partially handle the
claim under compelling circumstances.

1.3. EXCESS AND/ OR OUTSTANDING PREMIUM

1.3.1. It is the company policy that any applicable excess charge and
outstanding premium balance shall be collected in advance before any
claim is settled.

1.4. TOWING AND RECOVERY

1.4.1. The Company employs only those towing and recovery service providers
which are selected for their capacity and technical efficiency and which
signed a service agreement with Company.

1.4.2. The towed vehicle shall be parked in the Company’s parking shed
prepared for this purpose unless specially agreed and approved by the
claims manager in consultation with Operations Department.

1.5. TENDER HANDLING

1.5.1. The repair work of all damaged vehicles shall be handled by Tender in
accordance with the procedures laid down in this manual.

2
1.6. ASSESSMENT OF DAMAGED VEHICLES

1.6.1. All body and mechanical damages of motor vehicles including market
and salvage value shall be assessed by competent surveyors of the
Company who are required:

 To complete the post-risk survey form without leaving any blank

space.
 To conduct an exhaustive survey by listing all visible damaged parts
(body and mechanical) during the first survey.
1.6.2. Where the size of the claim is substantial such as to involve reinsurance
or is likely to involve litigation, or circumstances compel, an
independent surveyor may be invited to give his report.

1.7. APPROVAL OF CLAIMS

1.7.1. APPROVAL AUTHORITY (WORKORDER AND PAYMENTS)

1.7.1.1. Claims (work order and payments) are approved at different

authority levels depending on the size of the claim as
estimated in the survey report, garages estimate or
independent surveyor report and agreed payable amount.

Accordingly, the following officials of the Company are

authorized to approve.

Claims of up to the size opposite their titles:

Claims Supervisor Birr 10,000.00

Asst. Claims Manager Birr 25,000.00
Manager Claims Division Birr 50,000.00
Manager Operations Birr 75,000.00
DGM, Operations Dep. Birr 100,000.00
Chief Executive Officer Over Birr 100,000.00

1.7.1.2. Claims in excess of the limit of authority of a specified level

shall be referred to and approved by the immediately higher

3
 approving authority. Where subsequent information reveals
that the cost of the claim would be such that it should have
been approved by a higher approving authority, this shall be
done immediately.

1.7.1.3. The Chief Executive Officer may revise authority limits for
each position/officer and/or delegate additional approving
authority from time to time as may be deemed necessary.

1.7.1.4. All ex–gratia payments shall be approved by the Chief

Executive Officer of the Company and a note/remark to this
effect shall always be recorded in the claim file.

1.7.1.5. All total loss claims and abandonment of such total loss
vehicles shall be approved by the Chief Executive Officer of the
Company.

1.7.2. CLAIMS PAYMENT

1.7.2.1. The Company does not encourage payment in cash for a

repairable vehicle. Claim amounts shall be paid to a repairing
Garage unless cash settlement is preferred for some compelling
reasons or vehicle is a total loss.

1.7.2.2. Where cash is paid in lieu of repairs, the insured shall make
the vehicle available for inspection immediately after repair for
the policy to apply if not expired.

1.7.2.3. Cash payment shall, however, be effected for unobtainable

parts immediately based on the last catalogue price proforma
invoice obtained from the dealer and the Claims Division shall
inform the respective branch accordingly.

1.8. THIRD-PARTY RECOVERIES

1.8.1. Where a third-party is indicated to be at fault, recovery follow-up shall

immediately commence while the claim is being processed.

4
 1.9. REJECTION OF CLAIMS

1.9.1. No claim shall be rejected without the knowledge and approval of the
Chief Executive Officer.

1.9.2. Reinstatement of rejected claims, on acceptable ground, shall be subject

to approval by the Chief Executive Officer.

1.10. CONTRIBUTION FOR BETTERMENT

Where an already depreciated, deteriorated, or damaged part of a vehicle

needs to be replaced by new subsequent to a recent insured damage, the
insured shall be required to contribute for any betterment.

1.11. DISPENSATION

Where dispensation is required on any of the provisions in this manual as

appropriate, this shall, unless specifically indicated otherwise in the
appropriate units of the manual, be given only at the authorization of the
Chief Executive Officer.

2. PROCEDURES

2.1. CLAIMS NOTIFICATION

2.1.1. A claim may be intimated to the Company either verbally or in writing

using any appropriate media. However, the Company shall not take any
action until the insured or his agent duly completes a Notification of
Motor Accident Form.

2.1.2. Upon notification of a claim by insured or his agent or legal

representative, a "Notification of Motor Accident Form" (FORM-MOC
002) shall be completed and signed.

2.1.3. If notice of accident is received other than in writing, a "Temporary

Notice of Accident Form (FORM- MOC 001) shall be completed by the
officer receiving the details of the claim.

2.1.4. If notice of accident letter is received, ensure that particulars of the

accident and description of the vehicle (s) involved in the accident is/are

5
 given until full and detail information is submitted formally by
completing the "Notification of Motor Accident Form."

2.1.5. In case where the insured failed to complete “Notification of Motor

Accident Form” (Form No. MOC 002) within three days after the receipt
of temporary notice, the claims division shall send reminder to the client
emphasizing that the Company shall not take any action until the
insured or his agent duly completes a Notification of Motor Accident
Form.

2.1.6. Where completion of claim form is not possible for unforeseen reasons, a
claim file shall be opened based on information received under
temporary notice (Form No. MOC 001) with the knowledge and
authorization of the claims manager.

2.1.7. In completing the Notification of Motor Accident Form the assigned

officer shall assist the claimant, check that each & every relevant
question is answered properly and the form is complete in every aspect.

2.1.8. The officer, assisting the claimant, shall provide to the claimant, against
signature for the receipt of same, a list of supporting documents
and evidences that the claimant should produce stressing the
importance of presenting all relevant supporting documents in time.
(FORM- MOC 003)

2.1.9. The officer in charge must ensure that copy of the driving license and
owner ship title certificate of the vehicle are collected at the initial stage
along with the claim notification completed by the insured or his legal
representative.

2.1.10. The Claims Division Manager or the assistant claims manager and the
concerned Branch managers shall be notified of all claims lodged.

2.1.11. Incase claim notification is submitted to branches other than Head

office, the branch manager or officer in charge shall provide to the
claimant a list of supporting documents and evidences that the

6
 claimant should produce stressing the importance of presenting all
relevant supporting documents in time.

2.1.12. The branch shall send the claim notification and other relevant
documents received from the customer immediately to the claims
division at head office using the fastest possible means for timely
record, follow up and handling.

2.1.13. The branch shall retain copy of all documents and keep properly for
future reference and incase the original documents lost in transit.

2.1.14. In cases where supporting documents are not timely received, the
claims Division shall fortnightly send reminders to clients at least three
times emphasizing that the claim would otherwise be closed.

2.1.15. When, however, all efforts to obtain supporting documents fail, the
claim file is temporarily closed and the client notified accordingly with
the knowledge and consent of the claims manager.

2.1.16. However, when claims involve reinsurances and third party

beneficiaries within the legal limitation period, special attention should
be given to such claims and the Operations Department should
approve any cancellation of provisions for such outstanding losses.

2.1.17. Unless the driver and/or assistant driver are injured and unable to
appear, they shall be required to give full details of the accident in
writing and the driver shall sign on the notification of Motor Accident
Form.

2.1.18. The validity of the driving license shall be checked by the assigned
officer at the time of notification. For this purpose the officer in charge
should immediately prepare a letter to the concerned licensing
authority and request confirmation as to the validity of the license
produced by the driver and follow up the collection of the confirmation
on time.

7
 2.1.19. If the driver is unable to produce his/her driving license for any reason,
the case shall be brought to the attention of the Claims Division
Manager for further instruction.

2.2. ENTERY IN RECORDS

2.2.1. All information required as per the standard motor register book shall
be properly recorded by the assigned claims registration officer. Ticks
and dashes, unauthorized symbols or abbreviations are not allowed.
Instead, the initials N.A. (not applicable) are to be used. As a legal
document, the register book should be prepared neatly.

2.2.2. A claim file shall be opened for all claims lodged with all particulars
shown on it. Claim files so opened shall be numbered sequentially in a
numbering system peculiar to the motor class of business with each
claim carrying a unique number.

2.2.3. Registration and opening of claim file as per 2.2.2 above shall be
completed and passed to the concerned supervisor in 15 minutes upon
receipt of motor claim notification form.

2.2.4. The supervisor shall immediately review the claim notification, consult
the claims manager/ assistant claims manager and record in writing the
next course of action and pass file to the concerned officer with proper
instruction and direction in 20 minutes.

2.2.5. The officer in charge has the duty to enter all necessary particulars to
the system and assign system generated number to the claim file and
conduct assignment of inspector for further investigation and/or towing
service in 35 minutes.

2.2.6. A preliminary estimate of the cost of the claim/provision shall be set by

the officer in consultation with the supervisor based on the information
available at the time of report.

2.2.7. The claim file shall always be updated for any additional relevant
information. All additional relevant documents shall be fastened in the

8
 file chronologically and shall be numbered by the assigned officer
sequentially.

2.2.8. Any action taken or any communication made with respect to a

particular claim should be made in writing. Where discussions are
made, instructions given, or agreements reached verbally, such
events should be adequately noted in writing by the concerned claims
official.

2.3. VERIFICATEION of COVER and ACCOUNTS

2.3.1. Upon notification of a claim, underwriting information and accounts

position should be obtained from the system and attached to the claim
file (Form No. MOC 004).

2.3.2. In case of system failure/interruption where the notified claim

necessitates an urgent attention, immediate action shall be taken by
examining the insurance policy and ensuring the validity of the claim by
the claims Division until formal underwriting verification/information is
obtained from the system.

2.3.3. Where the policy/cover details are required for the purpose mentioned
under 2.3.2 above, the underwriting branch has the duty either to
provide the policy file or complete underwriting verification form (Form
No. MOC 005) and send to the claims division within one day.

2.3.4. If the claim is valid, claims services shall commence immediately. If the
claim is not, however, covered under the relevant policy for any valid
reason, the claims officer shall present the case with his comments to
the claims manager for decision and/or instruction and an immediate
action shall be taken accordingly.

2.3.5. The officer is not allowed to inform the customer the invalidity or
rejection of the claim outright before formal decision is being made by
authorized official.

9
 2.3.6. It is the duty of the claims manager/assistant claims manager to explain
to the claimant with respect and due care the ground for rendering
decision as to the invalidity of the claim in line with the policy terms,
conditions and exceptions.

2.3.7. The decision as to the invalidity of the claim has to be communicated to

the claimant in writing within one day after the date of decision by the
authorized body.

2.3.8. Where there is any outstanding premium in respect of the relevant

policy, the insured shall be required to settle the whole balance
forthwith before a repair work order could be given to a garage.

2.3.9. For clients requesting dispensation of the provision under 2.3.5 above,
this shall be given only at the written authorization of the DGM,
Operations or the CEO and for a period not extending beyond the repair
period.

2.4. CLAM PROCESSING

2.4.1. FOLLOW-UP

2.4.1.1. Once a claim is ascertained to be valid at the verification stage,

it is assigned to a claims officer for handling and follow-up.

2.4.1.2. The officer in charge shall be responsible for the handling,

follow-up and documentation of the claim till its final
settlement.

2.4.1.3. The claims Officer shall investigate, check and verify the details
of the Claim/claimants etc. as given in the accident form.

2.4.1.4. An inspector shall also be assigned immediately in 35 minutes

after the claim notification is reviewed to investigate the case
whenever the claim necessitates his attendance.

2.4.1.5. The inspector has the duty to ensure that, before assigning
towing service, particulars are being taken by police and goods

10
 and fuel product carried on the truck and tanker respectively
are unloaded so that the vehicle is necessitating a towing
service. The insured has to sign undertaking to this effect before
the assignment of towing service. (Form MOC 006)

2.4.1.6. The inspector who has been assigned to follow up a claim shall
give a detailed report immediately within one day upon return.
His report should include, among other things, type and cause
of accident, suggestion etc.

2.4.1.7. Regional Branches attending the scene of accident on behalf of

Head Office and other branches shall write a detailed report
about the accident which should reach Head Office in 2 days
upon return from the scene of accident.

2.4.1.8. If the claim is believed not to be genuine or calls for further

investigation, the claims Officer/Branch Manager attending the
scene of accident shall present the file with his/her
comments/report to the claims Division Manager who in turn
shall consult DGM-Operations for decision and /or instruction
and accordingly an immediate action shall be taken.

2.4.2. TOWING AND RECOVERY

2.4.2.1. All towing services shall be requested to the claims Division of

the Head Office, which shall either approve the proposal by the
Branch, if any, or request a service provider using the "Towing
Service Requisition" form (Form No. MOC 007) and the towed
vehicle shall be parked in the Company's Recovery site or
approved parking shed.

2.4.2.2. The delivery or handing over of the towed vehicle to the insured
or places other than the recovery compound must be authorized
by the claims Division Manager.

11
2.4.2.3. The Insured or Insured's Agent or the Inspector as the case may
be shall hand over damaged vehicles necessitating a towing
service to an authorized towing service provider using
"Damaged Vehicles Handing-over Form" (Form NO MOC 008).

2.4.2.4. Vehicles shall always be towed in the presence of company

inspector unless the claims manager, evaluating circumstances,
authorizes otherwise.

2.4.2.5. Damaged vehicles which do not require a towing service shall be

handed over directly to the Recovery Unit/Branch using the
same handing-over form in the presence of the inspector.

2.4.2.6. The Recovery Unit/Branch shall complete a "Damaged Vehicles

Receipt" form( Form NO.MOC 009) and shall counter-check with
the copy of the "Damaged Vehicle Handing-Over" form stated
under item 2.4.2.3 above, the discrepancy (if any) of which shall
be clearly shown in the remark part of this form.

2.4.2.7. A copy of the "Damaged Vehicles Receipt" form shall be sent to

the claims division for all vehicles towed to the Recovery Unit.

2.4.2.8. A register book shall be maintained by the Recovery Unit

showing plate No., Branch's name, and date and time of arrival
to and evacuation from the parking shed of damaged vehicles.

2.4.2.9. The recovery unit shall prepare a report on monthly basis

showing list of vehicles delivered/released and send to the
claims division with a copy to the Operations Department and
HR & Administration using FORM- MOC 010.

2.4.2.10. The supervisor in charge shall follow up on regular basis the

status of each vehicle which is found under the custody of the
recovery unit and prepare a weekly report and submit to the
Claims Division Manager (Form No. MOC 011)

12
 2.4.2.11. The Claims Division Manager, upon receipt of a report under
item no 2.4.2.10 above, shall be able to compile the status of
vehicles at recovery unit on monthly basis and report to the
Operations Department for the possible management
intervention in taking appropriate measure on time.(Form No.
MOC 012)

2.4.2.12. Towing and recovery charges may be settled at Head Office

and charged to the accounts of the respective branches the
service has been provided to.

2.4.2.13. If the towing crane is returned without rendering service due

to force majeure or insured’s fault, only 75% of the standard
tariff shall be paid to the towing service provider.

2.4.2.14. If the towing service is interrupted due to insured’s fault,

towing charge paid as per item no. 2.4.2.13 above shall be
collected from the insured or deducted from payable claim
amount.

2.4.2.15. The Recovery Unit shall post the name of the respective
Branch on all vehicles towed to the parking shed.

2.4.3. ASSESSMENT AND SURVEYING

2.4.3.1. The Recovery Unit and the assigned inspector shall notify the
Claims Division the receipt of damaged vehicle(s) on the same
day.

2.4.3.2. The Claims officer shall immediately complete post risk survey
request form (Form no. MOC 013) within one hour after
notification by the recovery unit/inspector that the vehicle is
delivered to the recovery unit and pass to the chief surveyor
to carry out post-risk survey for damaged vehicles and
establish market value immediately before the accident
including salvage value of such vehicles.

13
2.4.3.3. The motor claims supervisor has the duty to follow up and
make sure that the activity under 2.4.3.2 has been
accomplished in the required manner and within the specified
time.

2.4.3.4. The assigned surveyor shall inspect the damaged vehicle and
list out parts to be replaced and repaired and deliver the list to
the motor claims supervisor within a maximum of 2 days upon
receipt of the request for the purpose of tender process. (Form-
MOC 0014). He shall take note of the serial numbers, if any, of
or put identifying marks on the major mechanical/body parts
likely to be replaced as a result of the accident.

2.4.3.5. All vehicles, other than drivable, belonging to third party and
those owned by organizations with own garages, shall be
inspected at the recovery unit/Branch Office.

2.4.3.6. The assigned surveyor shall prepare and submit a complete

body assessment report up to a maximum of 5 days upon
receipt of survey request depending on the severity of the
damage and the complexity of assessment.

The surveyor's report shall include, among others, the followings:

 List of damaged body parts to be replaced or repaired

 Cost of parts and labor charges
 Time required for repairing
 Contribution, etc
 Estimates of External visible mechanical damage
 Internal suspected mechanical damages
 Salvage and pre-accident (market) value.
2.4.3.7. If, in the opinion of the surveyor, a vehicle could not be repaired
economically, he shall give his opinion including the need to

14
 conduct mechanical assessment before proceeding with body
damage repair work.

2.4.4. TENDERING AND AWARD

Invitation for Tender

2.4.4.1. The Company shall maintain a list of approved garages with

reliable services, stratified by specialization, facility, technical
and financial capacity, for the purpose of body and mechanical
repairs of damaged vehicles. Such a list shall be updated
periodically and compiled on the basis of technical competence
and efficiency of the garages concerned.

2.4.4.2. Claims Division is allowed to repair damaged vehicles at garage

outside the list whenever it is insured’s choice and subject to
undertaking signed by the insured (Form-MOC 0015) to
undertake a role of follow-up and responsibility for the delay
and poor workmanship.

2.4.4.3. In exceptional cases where a vehicle requires special handling,

the Claims Division may give the repair business to an
appropriate garage on or outside the list without necessarily
following the Tender procedure at the authorization of DGM,
Operations. A statement to this effect shall always be written in
the claim file and shall be signed by the Claims Manager and
the DGM, Operations.

2.4.4.4. If the insured has his own garage he may be allowed to

participate in the bid.

2.4.4.5. All body and mechanical damages the cost of which does not
exceed Birr 1,000- shall be repaired in garages of the clients'
choice without following the normal tender procedure. (This
embraces light vehicles up to pick-ups as classified by the

15
 Road Transport Authority). However, before such repairs are
undertaken the following procedures have to be applied:

- The client shall make the damaged vehicle available for

inspection to the insuring Branch.

- The client shall obtain and present to the insuring Branch

estimates of repairs from two garages.

- The insuring Branch shall approve the least estimate and

work order shall be given in the name of the Claimant.

- Follow-up of repair shall be the responsibility of the

insured.

- If repair figures appear to be exaggerated, normal tendering

procedure of the Company would take place.

2.4.4.6. As soon as the Claims Division is notified of the receipt of the

damaged vehicle at the Recovery unit, and upon receipt of the
list as mentioned under 2.4.3.4, shall invite garages on the
same day to submit their bids. (Form-MOC 016)

2.4.4.7. Tender for the repair of damaged vehicles shall be handled as

follows:-

- The Claims officer or in his /her absence Claims supervisor

shall select two garages in rotation basis from the list of
garages retained by the Claims Division and the names of
these garages should not be disclosed to the
client/claimant.

- Garages selected by the company have to be called

immediately to collect the invitation for bid.

- If damage of any vehicle is to be estimated outside of the

recovery yard for any reason, garages selected by the
company have to be accompanied by the inspector.

16
 - The insured /claimant shall also propose two garages of
his/her choice which he/she may need them to participate
in the tender for the repair of his /her vehicle through the
Garage Selection Confirmation agreement' (FORM-MOC
017).

2.4.4.8. If the insured is not willing to invite garages of his/her own

choice, the Company shall invite four garages up on receipt of
undertaking signed by the insured. (Form-MOC 018)

2.4.4.9. Branches outside Addis Ababa shall conduct tender according

to the existing circumstances using the garages available in
their locality.

2.4.4.10. Clients with their own garages:-

Organizations (other than vehicle repair garages) which have

their own competent repair workshops shall be allowed as
exceptions to repair their vehicles in their own garages,
subject to joint surveyors' or technicians' assessment and final
approval by the CEO and agreement reached thereon in
respect of body and mechanical repair cost.

2.4.4.11. The surveyor shall deliver the original body assessment report
to the claims Division in a sealed envelope immediately up on
completion of same in line with item no. 2.4.3.6 above.

2.4.4.12. The garages shall deposit their bids in sealed envelopes within
three days after receipt of invitation. Failure to submit bids
within the prescribed time limits shall be notified to the
Operations Department. Such acts may entail blacklisting
and/or cancellation from the list of approved garages for the
company.

2.4.4.13. The claims officer is responsible to follow-up and has the duty
to ensure that garages have deposited their bid within the

17
 time specified under 2.4.4.12. Frequent deviations by the
garages have to be reported regularly to the assistant claims
manager/claims manager who in turn shall report to the
Operations Department for appropriate measure.

Opening of Tenders

2.4.4.14. The claims Division shall ensure that a minimum of three bids
and a survey report are available before the evaluation of the
tender is considered by the appropriate approving authority
soon after submission of the bids.

2.4.4.15. All sealed envelopes shall be opened and initialed by the

claims manager/assistant claims manager and the DGM-
Operations/Manager, Operations as appropriate. The bids so
opened shall be analyzed and the bid winner decided soon by
the appropriate approving authority. (Form-MOC 019)

Selection and Award

Body and Visible Mechanical Repairs

2.4.4.16. The appropriate approving authority shall examine the claim

file along with the following documents:

Notification of Motor Accident, Underwriting and Accounts

Verification, inspector' Report, Traffic police and/or other
similar report, Garage repair estimates, Survey Report, and
policy file (if necessary) including copy of ownership title
certificate, driving license, photograph of the damaged vehicle
etc.

2.4.4.17. The claims officer has the duty to complete check list (FORM-
MOC 020) and make sure that all the above documents are
attached in the claim file for evaluation by the approving
authority.

18
 The following types of claims, however, may be handled
without the need for a traffic police Report:

- Own damage claims resulting from accidents that

happened out of the traffic road with sufficient explanation
from the insured to this effect.

- Third-party claims where the insured proves that at the

time when the damage was caused, the vehicle had been
stolen from him.

- Own damage claims where both parties to the accident are

insured by the Company and provided one of the claimants
has admitted responsibility and liability.

2.4.4.18. The approving authority after having satisfied themselves with

the genuiness of the claim and that the file is sufficiently
documented and is handled in accordance with this manual,
evaluates, the bid on the basis of price, delivery time and an
overall compliance with the requirements of the tender
documents, and awards the repair to the winner.

2.4.4.19. The claims supervisor has the duty to propose the approval of
work order within two days after the winner garage is declared
by the approving authority.

2.4.4.20. When there is an indication of gang up by bidder garages to

raise repair cost and as a result the difference revealed is so
big when compared to surveyor's repair cost estimate, the
approving authority may decide either to disqualify the
tender bidders and have the tender re-conducted under strict
secrecy or assign independent surveyor to conduct
assessment and report

2.4.4.21. If the repair cost of the lowest bidder is greater by not more
than 10% from that of the surveyor's repair cost estimate, the

19
 assistant claims manager/claims manager may approach the
bidder as may be deemed necessary to make a discount and
award the tender at the negotiated price which shall be put in
writing into the records and approved by the approving
authority.

2.4.4.22. If, however, the repair cost difference is greater than 10%, the
assistant claims manager/claims manager may either
negotiate with any of the bidders who would cut down their
price to a reasonable level or re-tender it as it deems
appropriate. However, CEO or DGM-Operations-Non-life may
decide otherwise on compelling circumstances and the reason
for the decision shall be recorded in the claim file.

2.4.4.23. Before repair work orders for body and/or mechanical are
given, the claims Division/Branches shall make sure that
spare parts are available in the market and if it is confirmed
otherwise, the following actions shall be taken:

- The claims Division/Branch shall pay the insured the total

repair estimate of the vehicle plus cost of unobtainable
part(s) as per the relevant policy endorsement subject to
approval of such measure by the operations department.
- The insured shall have to sign 'Discharge Receipt as full
satisfaction for the claim'.
- The claims division shall keep the insuring branch informed
of settlement of claim on cash basis to make sure that the
vehicle is in an insurable condition for the relevant policy
to continue to apply, be reinstated, or renewed as
appropriate.
2.4.4.24. If the vehicle has bank interest, written
confirmation/agreement has to be obtained from the
respective bank before cash payment is made in the name of
the insured only.

20
2.4.4.25. However, if the insured insisted on the issuance of work order
under the above situation, the insured shall sign undertaking
(FORM-MOC 021) to take responsibility for the delay due to
non-availability of spare parts.

2.4.4.26. The insured is allowed, to give the repair work to any garage of
his choice provided that he pays 3% of the repair cost to the
winner garage as service charge with a minimum charge of
Birr 100-and a maximum of Birr 1,000- The liability of the
Company, however, remains limited to the least price bid and
applicable to the garage chosen by the company.

2.4.4.27. Claims Division/Branches shall place an order for a body

repair work as soon as the bid winner garage is known (or
garage of the client's choice following the existing procedures).
The Repair Work Order (FORM-MOC 022) shall be completed
in duplicate, the original shall be given to the garage, and the
copy shall be retained in the claim file.

2.4.4.28. The claims officer has the duty to attach the guideline (FORM-
MOC 023) with the work order to enable the garage/insured to
comply with conditions necessary for the purchase of parts
such as price, genuine parts etc.

2.4.4.29. The body repair work order shall state, among other points
that:

- No mechanical work is to commence until mechanical

damages are assessed by the Company.
- The Company shall not be liable for any repair work or
change of parts made by the garage other than those stated
in the work order or authorized by supplementary work
order(s).
- The vehicle shall not be released to the insured without the
written authorization of the company (FORM-MOC 037).

21
2.4.4.30. If the submitted bids are expensive and re-bidding is found to
be of necessity, additional garages shall be selected by the
approving authority to submit their bids upon receipt of a
supplementary bid. Procedures starting 2.4.4.11 shall be
repeated as appropriate.

Mechanical Damages

2.4.4.31. At the same time a body repair work order is given to a garage,
where applicable, a mechanical damage assessment request,
'Damaged Vehicles inspection Requisition Form' (FORM-MOC
0013) shall be prepared by the claims Officer in charge and
authorized by the Claims Manager/Assistant claims Manager.

2.4.4.32. Mechanical damage assessment shall be made as soon as the

damaged vehicle is handed-over to the body repair garage,
unless it is found necessary, for technical reason, that body
repair work be completed first in order to conduct mechanical
assessment.

2.4.4.33. When the repair work is to be done in the insured's own

garages the mechanical damage assessment shall be made
together with the body damage assessment.

2.4.4.34. When a vehicle sustains a mechanical damage the repair work

shall be awarded to a garage that is qualified for body as well
as mechanical repairs.

2.4.4.35. The damaged vehicle shall be dismantled upon the instruction

of the Claims Manager/Assistant Claims Manager and in the
presence of the surveyor.

2.4.4.36. The surveyor shall make assessment on whether the alleged

damages are attributable to the accident or not. All
mechanical reports requesting specialist garage inspection
shall immediately be delivered to the specialist shop at the

22
 recommendation of the surveyor and approval of the Claims
Manager as soon as possible.

2.4.4.37. The surveyor, then shall collect proforma invoice for

mechanical parts and labor charges, and specialist certificate;
completes his mechanical damage assessment report and
submits all along with his report to the Claims Manager in two
to five days, depending on the complexity of assessment and
severity of the damage, after the receipt of mechanical
assessment request.

2.4.4.38. upon receipt of the mechanical damage assessment report, the

Claims Manager shall agree with the insured on any
contribution to be stated on post risk survey report(for body
and/or mechanical) and any other costs to be borne by the
insured and puts a memorandum of understanding to that
effect in the claim file.

2.4.4.39. The claims officer, upon receipt of the mechanical report along
with instruction by the claims manager/assistant claims
manager, shall prepare proposal for the approval of
mechanical work order in one day and pass to the approving
authority.

2.4.4.40. The claims Division shall issue a mechanical repair order to

the concerned garage in one day after approval using the
repair Work order (FORM-MOC 022) attaching the list of parts
to be replaced and repaired as shown in the survey report.

2.4.4.41. The claims officer has the duty to attach the guideline (FORM-
MOC 023) with the work order to enable the garage/insured to
comply with conditions necessary for the purchase of parts
such as price, genuine parts etc.

23
 2.4.4.42. A copy of the repair order with the list of parts to be replaced
and repaired including FORM-MOC 023(conditions for the
purchase of parts) shall be given to the insured for his
personal follow-up.

2.4.4.43. If the vehicle is damaged beyond economic repair or where in

the course of a repair limits of a given approving authority are
(to be) exceeded, the file shall be passed over to the next
higher approving body which shall examine and decide as
appropriate on the file.

2.4.5. REPAIR FOLLOW-UP

2.4.5.1. If the company undertakes to repair the vehicle under its

supervision and issues work order to the garage of its choice,
strict follow-up shall be made on the repair progress of the
vehicle.

2.4.5.2. The claims officer shall advise the company surveyor in writing
(FORM-MOC 024) to follow-up repair progress of vehicles
whose repair work has been agreed to be conducted under
our supervision.

2.4.5.3. The assigned surveyor shall follow-up the repair work of the
vehicle every two weeks after the delivery of the vehicle to the
garage and shall write the repair progress on the cover of the
respective claim file and shall bring to the attention of the
claims manager/assistant claims manager any
problems/complaints in connection with the repair work until
finalization.

2.4.5.4. Depending on the seriousness of the case, the company

surveyor is also expected to report findings to the Operation
Department for timely and appropriate measure.

24
 2.4.5.5. The claims manager shall act immediately to resolve any such
problems/complaints by closely working in consultation with
the Operations Department.

2.5. EXCESS RECOVERIES

2.5.1. The claims officer shall ensure that Excess is collected in cash before the
claim is processed. However:

2.5.1.1. Corporate clients who cannot pay the excess before the claim is
processed shall effect payment any time before the repaired
vehicle is released, or

2.5.1.2. When claim payment is effected in cash, the claims Division

may deduct the excess payable by the insured from the
amount of claim payable. However, if the claim is subject to
recovery, the client has to pay in cash

2.5.2. A claims Debit Notes shall be issued for the purpose of cash collection of
recoveries/excess.

2.5.3. Excess collected from the insured shall be refunded to him if he produces
a court verdict which confirms that a third-party is responsible for the
accident and liable for the damage; otherwise the excess collected shall
only be refunded after the total amount of claim including the excess is
recovered from liable third-party/ies.

2.6. TOTAL LOSS

2.6.1. A damaged vehicle shall be declared 'total loss' if it is uneconomical to

repair taking the following points into consideration:

2.6.1.1. When the vehicle is totally destroyed/lost/due to insured peril.

2.6.1.2. When the repair cost is equal to or more than the sum insured.

2.6.1.3. If the repair cost (body, visible and suspected mechanical)

approaches to 50% of the sum insured, total loss can be
declared or if the estimated total repair cost exceeds the sum

25
 insured less the salvage value in which case the vehicle shall
be declared as constructive total loss.

2.6.1.4. Total loss amount can be determined by negotiation with the

insured where the basis for negotiation is the sum insured or
market value whichever is lower and certain percentage of
depreciation may be considered.

2.6.2. The Chief Executive Officer of the Company may, however,

allow/authorize total loss settlement based on grounds other than
mentioned above as long as declaring total loss is advantageous to the
company without compromising the interest of the claimant.

2.6.3. In all the above cases, the claims Division shall collect all relevant garage
estimates for counterchecking and as supporting evidences to declare
total loss and upon receipt of such documents and evidences, the claim
file shall be presented with comment by the claims manager/assistant
claims manager for approval of total loss proposal in one day.

2.6.4. Total loss claims that involve Duty Free vehicles shall be assessed by an
independent surveyor.

2.6.5. After the approval of total loss proposal and before a payment for a total
loss is effected Claims Division shall collect the following documents from
the insured:

 The ownership title certificate.

 Power of attorney confirming that the salvages can be disposed of
by or transferred to the Company.
 Inland Revenue tax clearance certificate in respect of vehicles for
commercial use only.
 Customs declaration in respect of Diplomatic vehicle.
 Clearance letter from Road Transport Authority.
 Discharge Receipt from the beneficiary.

26
 2.6.6. Before a proposal for total loss payment is made, the claims officer shall
make sure that the damaged vehicle(salvage/wreck) is under the custody
of the recovery unit and appropriate confirmation( format) signed by the
recovery unit has to be attached in the claim file.(Form No.25)

2.6.7. The claims division shall also make sure, before a payment for a total loss,
that duty and tax is paid on duty free vehicles in compliance with the
directive issued by the Ethiopian Revenue and Customs Authority
concerning insurance placement on duty free vehicles.

2.6.8. The claims division has the duty to examine details of documents stated
under item 2.6.5 above and make sure that all submitted documents are
proper and in order to enable the company dispose of or transfer the
salvage.

2.6.9. The claims division shall maintain separate registration book for total loss
vehicles which shall mainly contain, among other things, plate no., claim
no., amount settled, sum insured(OD only), salvage and market value etc.

2.6.10. The serial no. on the registration book given to the specific total loss
claim shall be written on the claim folder with a marker so that the
vehicle is marked as total loss for future action such as disposal
through auction or other mechanism.

2.6.11. Documents stated under item 2.6.5 shall be filed in the relevant claim
file. However, the Ownership Title Certificates shall immediately be
handed over to Manager, HR&ADM. against signature and shall be
properly registered and kept under safe and lock.

2.7. CLAIMS RECOVERIES

2.7.1. SELVAGE RECOVERIES

2.7.1.1. In case of repairs, all the body as well as mechanical replaced

parts shall be handed over by the garage to the surveyor who
shall immediately pass them to the Recovery Unit using the
"Replaced parts Delivery slip" (Form No. 26).

27
 The surveyor shall ensure that the replaced parts are those
parts of that particular repaired vehicle.

2.7.1.2. All replaceable parts subject to collection, in the opinion of the

surveyor, have to be collected at once so that late delivery of
partial / the remaining salvages and demand for payment is
strictly forbidden.

2.7.1.3. In cases where repair cost is settled before the collection of

salvage under compelling circumstances particularly for dealers
to facilitate the release of the vehicle, it shall be recorded in a
separate ‘salvage collection follow-up’ registration book which
shall contain, among others, claim no., plate no., name of
workshop, name of assigned inspector, date of assignment etc.

2.7.1.4. The claims officer shall provide the inspector, against signature,
with duly completed replaced parts delivery slip (Form no MOC
026) to enable the inspector follow-up the collection.

2.7.1.5 The inspector shall, accordingly, follow-up and reports the

collection of the salvage in one week after the date of
assignment.

2.7.1.6. Garages, except dealers, shall be required to transport the

replaced body and mechanical parts to the Recovery unit.

2.7.1.7. Claims Division shall ensure that all total loss declared vehicles
which are in the custody of garages or TP claimants are
collected intact in the presence of company surveyor.

2.7.1.8. Total loss declared vehicles shall not be abandoned unless their
recovery cost is confirmed to exceed the salvage value by
surveyor/independent surveyor.

2.7.1.9. The Recovery Unit shall issue a Salvage Goods Receiving

Voucher for all salvage collected the copy of which shall be filed
in the relevant claim file.

28
2.7.1.10. The Recovery Unit shall be responsible for maintaining a
complete record of all salvage collected, categorization of all
salvage in such a way that disposal decisions are simplified,
and facilitate for their timely disposal.

2.7.1.11. Salvages from claims with third-party recovery cases shall be

batched by plate Number of the subject insured vehicle,
marked as such, and kept separately until such time the
recovery case is finalized or decision rendered otherwise by the
management.

2.7.1.12. Disposal of salvages:

2.7.1.12.1. All salvages shall be disposed of at the initiation of the

claims Division by tender at least three times before the
closing of a financial year.

2.7.1.12.2. Floor bid price shall be determined based on surveyor’s

report and as approved by a bid committee comprising of
DGM – Finance & Admin, DGM- legal Services, Manager
Branch Operations and Claims Manager which
Committee shall also be responsible to open and evaluate
the bid.

2.7.1.12.3. Such Tender shall be made open to the public by

publishing at least in one of the widely read news papers
in the Country.

2.7.1.12.4. A Tender is valid only when presented using and in

accordance with the tender document prepared by the
Company in a sealed envelope and posted in to the
official tender box which shall be placed at the Head
Office of the Company for the tender period.

2.7.1.12.5. Tenders shall remain open for at least Ten days from the
date of publication.

29
 2.7.1.12.6. Tenders shall be awarded to the highest price bidders for
each single item or batch of salvage.

2.7.1.12.7. The company may, however, cancel the tender fully or

partially with the consent and approval of Chief
Executive Officer and look for better offers through
negotiations or re-tender.

2.7.1.12.8. All the proceedings of the Tender shall be documented in

a file so designated by the committee. The Committee
shall present same along with a summary report and its
recommendations to the chief Executive Officer, copy to
DGM-Operations, for final approval or decision.

2.7.1.12.9. If approval is secured from the Chief Executive Officer on

the results of the tender as proposed by the committee,
HR and Administration, up on confirmation of collection
of the entire tendered sum prepare a 'Salvage Goods
Release Order' and forward to the Recovery Unit.

2.7.1.12.10. The Recovery Unit shall handover the salvage vehicle or

item to the concerned winner through a 'Salvage Goods
Issue Voucher'.

2.7.2. THIRD-PARTY RECOVERY

2.7.2.1. All claims declared to be the faults of third-parties by either the

insured or police traffic shall be recorded in the "Third-party
Recovery Register Book”. The recovery officer who is entrusted
to follow-up the recovery shall take the assignment against his
signature in the register book, and shall be required to report
the progress fortnightly using the "Third-party Recovery follow-
up Report: (FORM-MOC 28).

2.7.2.2. No single claim which is subject to recovery shall go through the

claims processes before it is registered in the “Third party

30
 Recovery Register Book” mentioned under item 2.7.2.1 above
and the claims manager/assistant claims manager is
responsible to make sure that recovery cases are properly
registered.

2.7.2.3. The claims division shall exert itself to fully settle any claim
subject to recovery in reasonable time as much as possible in
order to meet time limit restriction under subrogation right.

2.7.2.4. The inspector shall act swiftly to trace/collect all legal evidences
in respect of the Claim that would enable the Company
establish Liability.

2.7.2.5. It is essential that Legal services of the Company be involved

/advised at the early stages of such claims so that no legal
formalities and/or requirements are overlooked.

2.7.2.6. Where evidences are such that the third-party is responsible for
the loss or damage, the recovery officer shall make sure that the
Third-party is served by the company with a written reminder of
liability to the extent of all costs and expenses that may be
incurred as a result of such loss or damage.

2.7.2.7. The inspector or any other assigned staff shall obtain a

statement of acceptance of a liability in writing as soon as a
third-party admits fault.

2.7.2.8. The Claims Division shall make all possible efforts to collect all
recoverable amounts in cash from a liable third-party as soon
as the amount of claim is known. However, if the liable third-
party cannot effect an immediate settlement, he may give a
post-dated cheque or a promissory note with the approval of the
DGM – Operations.

2.7.2.9. Third-party recoveries not collected as stated in item no. 2.7.2.6

above shall be passed to Legal services for action and the

31
 recovery officer shall keep list of such cases as per the format
designed for the purpose.

2.7.2.10. Collection of recovery from a liable Third-party, where the

insured vehicle is declared total loss, shall be handled as
follows:

2.7.2.10.1. Recovery shall be collected after the salvage is sold.

However, the Third-party may take the salvage provided
that he pays the recovery amount, comprising of all the
costs and expenses incurred, in full.

2.7.2.10.2. If the value obtained from the sale of the salvage is equal
to or greater than all the costs and expenses incurred,
then there shall be no collection of recovery from the
liable Third-party.

2.7.2.10.3. If the value obtained from the sale of the salvage is less
than all the costs and expenses incurred, then the
difference shall be collected from the liable Third-party.

2.7.2.11. The recovery officer has the duty to report to the claims
manager/assistant claims manager the status of recovery
cases on monthly basis.

2.7.2.12. Problems of whatsoever nature encountered by the recovery

officer in dealing with third party recovery cases have to be
reported to the claims manager/assistant claims manager
immediately.

2.7.2.13. The claims manager or personnel delegated by him/her has

ultimate responsibility to ensure that recovery cases subject to
legal action are transferred to legal services on time.

2.7.2.10. No recovery case shall be closed for any reason before the
amount is fully recovered without the consent and decision of
the Chief Executive Officer/DGM – Operations/Non-life.

32
2.7.3. REINSURANCE

2.7.3.1. Once a claim is lodged and a first survey undertaken to set the
estimated cost of the claim, arrangements shall be made to
advise the respective reinsures of such loss where its cost is
expected to exceed the Company's priority using loss advice
sheet (Form No 29)

2.7.3.2. The claims supervisor shall make sure that loss advice slip
(Form No. 30) is issued from the system by reinsurance
department and send to reinsurers on time. Copy of the slip
shall be attached in the respective claim file or files if other
liabilities (workmen’s compensation and carriers’ liability) XL
Treaty is involved in one incident.

2.7.3.3. Debit notes shall be prepared to charge each of the participating

reinsurers for the excess loss paid in line with their respective
shares in the treaty. Debit notes shall be accompanied by Loss
settlement Advice sheets (Form No.031) which shall provide
more details of the claim to the reinsurers.

2.7.3.4. Where the respective treaties require so, reinsurers are advised
of outstanding losses which may give rise to a claim under the
treaty periodically as stipulated in the treaty provisions. All
claims paid thus far with respect to the relevant claims shall be
considered in determining the share of the reinsurers' from the
outstanding claims. The claims Division may maintain a
register book dedicated for such purpose.

2.7.3.5. Reinsurers' share under a certain paid claim shall be adjusted

for any actual recoveries made, third-party recoveries, etc.
through a credit note.

2.7.3.6. Salvage value in case of total loss shall, however, be deducted

from the actual claim amount to be debited to reinsurers’

33
 account at the initial stage based on estimated salvage value
proposed by the surveyor.

2.7.3.7. Death of or bodily injury to drivers/assistant drivers resulting

from a given accident involving the insured vehicle and being
handled under workmen's compensation claims; and loss
of/damage to property whilst being transported by the same
truck/tanker and covered under carriers’ liability policy must
be aggregated with the cost under the motor claims in
determining the excess loss that should pass to the motor &
Other Liabilities XL Treaty. This shall be done in all
communications with the respective reinsurers.

2.7.3.8. The subject motor, workmen's compensation and/or carriers’

liability claim files shall be cross-referenced and all files visibly
marked by indicating the claim nos. and putting statement on
each file to the effect that they relate to the same event and are
to be aggregated for reinsurance recovery purposes.

2.8. PERSONAL ACCIDENT BENEFIT (P.A.B)

2.8.1. Personal accident benefit claims and medical expenses shall be

handled in accordance with the term and conditions of the respective
endorsement in the policy.

2.8.2. Documents such as medical board certificate, post-mortem certificate,

police or equivalent report, court certificate of legal heirs shall be
produced whenever applicable.

2.9. THIRD-PARTY CLAIMS HANLING

2.9.1 GENERAL

2.9.1.1. It is a policy condition that the policyholder should not

prejudice the position of the Company by admitting liability to
third-parties without the consent of the company.

34
2.9.1.2. Third-party claims shall be handled after the insured has
formally lodged the claim.

2.9.1.3. No third party claim shall be handled without the production of

police report confirming the fault of driver of the insured
vehicle.

2.9.1.4. Where production of police report is not practical for various

reasons and circumstances reveal beyond any doubt that the
driver of insured’s vehicle is at fault, third party claim may be
handled with the consent and approval of Operations
Department in which case an inspector shall be assigned
specially for third party vehicle claim, to analyze the claim and
give his view in establishing liability.

2.9.1.5. Utmost urgency and special attention shall be given to the

handling of third-party claims to avoid possible questions of
loss of use, consequential loss and/or other extra costs and
expenses.

2.9.1.6. The party responsible for the accident shall be determined by

examining all relevant evidences and reports: the policy
holder's statement, the inspector's report, the police report, etc

2.9.1.7. When, however, an insured declares that he is responsible for

the accident and/or is confirmed by a police report the claims
officer shall ensure that an immediate action is taken to finalize
the case.

2.9.1.8. All correspondence with a third-party claimant shall be marked

'Without prejudice'.

2.9.1.9. The company's liability for third-party claims shall be governed

by the provisions of Proclamation No. 559/2008 providing for
compulsory vehicle insurance against third party risks subject
to limits of amount shown in the policy.

35
 2.9.1.10. The claims Division shall settle third-party claims by effecting
cash payment. Any decision to repair a third-party
vehicle/property shall only be made by Manager, Operations
and then a written confirmation (Form No. 32) should be
obtained from the owner or his legal representative releasing
the Company from any possible question for loss of use and
other extra expenses that may arise due to delay in repairing
the vehicle.

2.9.1.11. On cash settlement of third-party claims, the claims

Division/Branch must obtain a properly worded discharge
receipt (Form No. 33) for all payments and the claims
Manager shall ensure that the company is fully discharged
from further liability.

2.9.2. THIRD-PARTY PROPERTY DAMAGE

2.9.2.1. It is of paramount importance that an inspector be assigned to

attend to all claims involving third-parties.

2.9.2.2. Third-party property damage other than vehicles shall be

handled by an inspector whenever applicable as stated in item
no. 2.9.1.4 above and reported fully to the claims Manager for
examination and decision.

2.9.2.3. For property damage, Third Party has to present his/her

estimate of damaged property and the Company may assign
own or independent surveyor depending on the complexity of
the claim and severity of the property damage.

2.9.2.4. It is preferable to effect cash settlement for third-party property

claims after the repair/maintenance cost has been properly
estimated. If, however, the third-party vehicle is to be repaired,
repair shall be handled in accordance with the "Tender

36
 Handling procedures" of this manual and subject to condition
under item no. 2.9.1.9 above.

2.9.3. THIRED-PARTY BODILY INJURY

The law is not clear on the subject of assessing the extent of third-party
claims for bodily injuries. Custom, equity and common sense play,
therefore, a very important part in dealing with these kinds of claims.

2.9.3.1. Third-party bodily injuries are handled in accordance with

article 2090 to 2123 of the Ethiopian civil Code and
Proclamation No. 559/2008 as far as the scope and limits of
liability are concerned. The claims Division may, however,
consult the Company's Legal Services for compensation in
connection with permanent total disablement and fatal injury
claims whenever the need arises.

2.9.3.2. Third-party compensations in respect of fatal and other injuries

shall be negotiated jointly by the claims Manager/Assistant
claims manager and the claims Officer and shall be approved by
the Manager, Operations.

2.9.3.3. Compensation payable in respect of fatal injury shall be

supported by:

2.9.3.3.1. Post-mortem certificate (Whenever possible)

2.9.3.3.2. Police or equivalent report.

2.9.3.3.3. Court certificate of legal heirs. (If the heirs of a deceased

person of less than 18 years old are the mother and /or
the father, they shall produce a declaration that they are
guardian or tutor from a court of law).

2.9.3.4. Compensation for permanent disability shall be supported by:

2.9.3.4.1. Medical Board's certificate (Whenever possible) and

2.9.3.4.2. Police or equivalent report.

37
 2.9.3.5. Medical expense up to the amount specified in the relevant
policy may be paid in advance to the health centre where the
injured third-party is being treated as in-patient or out-
patient considering the degree of injury involved.

2.9.3.6. The claims division shall maintain separate registration book

for third party claims and record all particulars/details
thereon.

2.10. CLAIMS SETTLEMENT

2.10.1. GENERAL

2.10.1.1. All Contribution amounts due from a client in respect of a

certain claim shall be paid in cash to the Company before
the repaired vehicle is released.

2.10.1.2. Upon receipt of a satisfaction note (FORM No. 34) dully

signed by the insured or his legal representative(s)
together with the repair invoice showing the breakdown of
the repair work with their respective prices, the claims
Division shall issue a vehicle release order to the Garage.

2.10.1.3. The company surveyor shall countercheck invoices received

from garages for body as well as mechanical repair works
as appropriate against the relevant survey reports and
repair work orders and shall submit summary(Form No.
35) and his comments on any variation works, if any to the
claims supervisor in 2 days.

2.10.1.4. The claims officer, upon receipt of the final part cost
summary under 2.10.1.3 shall prepare final payment
summary (FORM-MOC 034), propose approval of payment
and pass file to the approving authority in one day.

2.10.1.5. Where repair settlement approvals are referred to a higher

approving authority, such authority shall approve the

38
 payment as proposed or decide otherwise and return the
file in one day.

2.10.1.6. If the approving authority returns the file without approval

but with comment (using file referral/instruction Form No.
35), the personnel to whom the file returned/referred shall
make appropriate correction or provide explanation and
refer the file back to the approving authority in one day.

2.10.1.7. The claims division shall ensure that all replaced body as
well as mechanical parts as appropriate are delivered to the
Recovery unit by counterchecking the delivery slip
presented by the garage against the relevant 'salvage Goods
Receiving Voucher' before payment is effected.

2.10.1.8. The claims officer before processing the claim for settlement
shall check that:

 Applicable excess has been collected in cash or deducted

from payable amount.
 Remarks by company surveyor after repair completion
have been complied with.
 Limit of towing and protection cost versus total agreed
repair cost has been evaluated.
 Any previous payments effected to the insured/garages
on advance basis have been deducted.
 Outstanding premium has been settled etc…
2.10.1.9. The claims officer shall attach a duly completed check list
confirming that all requirements under item no.2.10.1.7
and others are fulfilled in order to approve the payment.

2.10.2. CONTRIBUTION

2.10.2.1. The operations department shall maintain and periodically

update contribution rate on vehicle parts every six months
if deemed necessary.

39
 2.10.2.2. Clients shall contribute to or for the following items while
their damaged vehicle is under repair. The contribution
percentage is the base line and subject to amendment by
Operations Department as and when needed. Table of
Contribution percentage is annexed to this manual for ease
of reference.

2.10.2.2. However, percentage of contribution may vary from the

contribution rate chart depending on the pre-accident
condition of the vehicle.

2.10.2.3. Any deviation from the applicable rate due to insured’s

legitimate complaint or other compelling circumstances
shall be the decision of the DGM –
Operations/Non-life/Manager, Operations.

2.10.3. PREPARATION OF VOUCHERS FOR PAYMENTS AND RECOVERIES

2.10.3.1 All payments in respect of claims shall be supported by a

properly completed and approved claims payment voucher.

2.10.3.2. No claim payments shall be prepared without a prior

instruction in writing from the claims Manager, stating the
amount and the name of the beneficiary. It is essential that
all claims payments be effected after all the technical
processes are finalized.

2.10.3.3. In case of total loss or major repairs, claims with creditor

party interest shall be paid in cash to the insured only
when a written consent is obtained from the bank or other
creditor.

2.10.3.4. Payments in respect of beneficiaries with a debit balance in

the company's account shall be settled by issuing a credit
note to the extent of such balance and a Cheque for the
difference.

40
 2.10.3.5. The Claims Officer shall ensure that copy of claims
payment Vouchers issued by accounts are properly
attached in the respective claim files.

2.10.3.6. The "Claim Debit Note” prepared in duplicate for

excess/recovery collection shall be signed by the assistant
claims Manager/supervisor and passed to the cashier for
collection against a cash receipt. The copy shall be retained
in the claim file.

2.10.3.7. Recoveries for receipt on account shall be prepared by

means of claim debit notes and shall be approved by the
Claims Manager.

2.10.4. CLOSING A CLAIM FILE

2.10.4.1. A claim file is closed only when:

 Full and final settlement is effected to the claimant(s),

 Any third-party recovery issues, if any, are finalized, and
 A credit invoice is received from reinsurers in confirmation
of their share of the claim as advised by the Company, if
any.
 When the claim is rejected and approved by the approving
authority.
2.10.4.2. When a file is to be closed accordingly, a summary report
prepared and signed by the claims Manager stating the
particulars of the claim and the total cost at which the
claim was settled and the claim file thus being closed is
filed in the claim file. Copy of such summary report is sent
to the underwriting branch/unit for information and filing
in the relevant policy file.

2.10.4.3. The word "SETELED" in block letters is written on the face

of the cover of the claim file and initialed by the claims

41
 Manager/assistant claims manager for ease of reference
and is passed to Archives for permanent filing.

2.10.4.4. The claims Manager/assistant claims manager has to make

sure that such claim is immediately deleted from the list of
outstanding claims of the Company as of the date of
settlement.

2.10.4.5. A claim file so closed may be reopened for:

 Any legitimate claim,

 When salvage, if any, is disposed of later and to adjust the

total cost at which the claim is settled and the share of
reinsurers, if any.

2.11. COMPLAINTS HANDLING PROCEDURES

2.11.1. The personnel of the Company shall seriously consider the complaints
of any client and take immediate action to resolve the issue fairly and
amicably, of course without contravening company policies and
procedures.

2.11.2. Where a claims Officer is not in a position to resolve the case, whether
it relates to liability or quantum, he shall immediately pass same to
the claims Manager for further consideration clearly stating the points
of misunderstanding/difference.

2.11.3. The claims/Branch Manager shall examine the issues surrounding the
case and try to resolve same in such a way as stated in 2.11.1 above.

2.11.4. The client is entitled to go high up the structure of the company

hierarchically up to the chief Executive Officer to have his complaints
considered fairly thought it is believed that most cases shall be
resolved at the front lines.

2.11.5. Where, after all efforts made, a fair and amicable resolution could not
be reached, a reply in writing stating the position of the company shall

42
 be given to the client by the DGM, Operations or at his written
authorization by any appropriate official after due consultation with
the legal Services to the Company.

2.12. Dispute Management

2.12.1. A client dissatisfied by the decisions of the Company after passing

through the Company's complaints handling procedure set out in 2.11
above may decide to go to court.

2.12.2. It is a policy condition that all misunderstandings relating to quantum

between the company and a client should first be referred to
arbitration along the procedures set out in the policy before the client
decides to go to court.

2.12.3. The Legal Services of the Company shall be responsible for handling
and follow-up of all arbitration and court cases. The Claims Division
and the respective Branches shall maintain records of all such cases
pertaining to their branches.

2.12.4. Third-party recovery cases which could not be successfully negotiated

at either level of the operational hierarchy of the Company shall also
be referred to legal services at the authorization of the Chief Executive
Director.

2.12.5. Legal Service shall manage the proceedings of such cases in

consultation with the concerned officials of the Company.

2.12.6. Legal Services shall at the end of each quarter, prepare report
summarizing the developments and the status of all legal cases in
which the Company is involved as a plaintiff or a defendant since the
last such report and communicate to all Executive Management
members of the Company.

43
2.13. STATISTICS

2.13.1. The preliminary estimate of the cost of the claims set at the time of
report shall regularly be reviewed and adjusted in line with emerging
new information and subsequent settlements. This shall be made in a
review sheet attached to the claim file which shall at least show the
date of and the reason for the revision.

2.13.2. An outstanding claims bordereaux shall be maintained summarizing

the details of all motor claims not settled as of a particular date. The
Outstanding claim Bordereaux shall be prepared using the company's
form for this purpose, and the claims Officer shall ensure that all
particulars shown in the form are correctly completed.

The bordereaux shall include particulars such as plate NO. And brief
description of the nature of the claim such as Own Damage, Third-
party fatal injury, Third-party property damage, PAB, etc.

The Outstanding claims Bordereaux shall be checked and initialed by the

Claims Manager before it is signed by the Operations Department.

2.13.3. A Statistical summary shall be prepared at the end of every month

within the first 10 (ten) days using the "Motor claims Monthly
Summary" (FORM-MOC 36).

2.13.4. The claims Division shall also maintain various statistics of all claims
including by type of accident, make and model of vehicles,
underwriting year, year of accident, business source (Direct/agent etc.)
branch, etc. to help various operational and managerial decision
making.

44