By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Insurers have hailed the Government’s move to abandon the “counter productive” stipulation that all Bahamian and resident drivers must annually renew auto insurance coverage in their birth month.

The Davis administration, in legislation tabled in Parliament alongside the mid-year Budget last week, unveiled an amendment to the Road Traffic Act that eliminates the ‘birth month’ requirement and instead replaces it with language mandating that drivers and companies merely renew their auto insurance on an annual basis.

The Bill introduced last week now reads: “A policy of insurance shall be renewed annually by an insured person.” This compares to the clause six, section ten that was passed into law by Parliament less than a year ago, which currently states: “A policy of insurance shall be renewable annually within the birth month of the insured person.”

The Road Traffic (Amendment) Bill 2025, the latest part of the Government’s legislative push to crack down on the numerous uninsured drivers causing havoc on Bahamian roads, effectively represents a government u-turn that has occurred in less than 12 months on the ‘birth month’ requirement.

“The Road Traffic (Amendment) Bill, 2025, seeks to make provision for the deletion of the requirement in subsection (6) of section 10 of the Road Traffic Act that a policy of insurance shall be renewable annually within the birth month of the insured person, and to substitute an alternative new requirement which provides that a policy of insurance shall be renewed annually by an insured person,” the Bill states.

This change comes as Tribune Business was informed that “at least one” Bahamian insurance underwriter has increased its minimum annual third-party auto premium to align it better with the high risks associated with driving on the streets of Nassau and New Providence.

However, Bruce Ferguson, president of Professional Insurance Consultants (PIC), hailed the change contained in the Road Traffic (Amendment) Bill 2025 as “wonderful news” and in line with what the Bahamian insurance industry has recommended to the Government. He added that several clients have already been contacting, and visiting, brokers and agents such as himself to adjust their renewals to their birth month.

Reiterating that the ‘birth month’ mandate would have created an “administrative nightmare” for insurers, given the volume of clients who would have been forced to switch the timing of annual auto coverage renewals, Mr Ferguson told this newspaper: “That’s something we pointed out to every authority; that it was essentially counter-productive.

“We could understand the reasoning behind it and the good intent, but it would have the opposite effect [to enforcing insurance coverage for all] because people would not be able to afford to renew insurance and pay for their car to be licensed in the same month. That part of the Act seemed to be a bit oblivious as to the unintended consequences that would happen. People have to make a choice between what they spend money on.”

Mr Ferguson hinted that third-party auto insurance coverage costs are likely to increase due to the high level of claims and loss ratios some underwriters are experiencing due to the significant number of traffic accidents on New Providence and other islands’

“Particularly with some insurers putting their minimum premiums up because of the deterioration in their accounts,” he added. “We’ve seen at least one insurer increase there’s, and it’s not before time. In my personal view, you should not be able to get insurance for this island for $300 a year when the risk is much higher, so we accept that insurance premiums have to increase to try and match the risk of driving on Nassau’s roads.”

Praising the Government, and in particular Jobeth Coleby-Davis, minister of energy and transport, for reversing course so swiftly, Mr Ferguson added: “We’re happy to hear our remonstrations have been heard for once. That will be greatly appreciated if that is the case. 

“We totally accept that we need to reduce the amount of uninsured drivers on the road and approve of parts of the Bill that say you cannot insure a vehicle for less than six months. We also like the impounding of vehicles if there is no insurance.”

Mr Ferguson said the ‘birth month’ mandate, which was passed last year, has already prompted some to switch the date of auto policy renewals to come into compliance. “A number of clients have been following it already, and persuaded into thinking this is officially the law,” he added. “We were told that this is a transition year, and that everyone had been given a year to comply.

“Clients were already changing. Yes, it was an administrative nightmare. It does mess the renewal cycle up. It makes it more difficult to track them and remind clients when renewals are due. People should be able to choose, depending on their circumstances for whatever reason, when they want to renew.”

Reginald Munroe, RoyalStar Assurance’s executive manager for underwriting and reinsurance, also backed the proposed Road Traffic Act change although he needed to assess how the amendment would work alongside the stipulation that drivers cannot cancel an insurance policy within six months of its issuance.

“I reached out to the Bahamas Insurance Association (BIA) asking for clarification on the annual part,” he said. “The previous legislation amended it to being six months. I’m seeking clarification on that point now. When I spoke to the BIA this morning, they said the six-month requirement remained. 

“There was no mention of it being increased to 12 months. That begs the question as to how it works there with the requirement for how the policy is to be cancelled and when. If someone comes in, and takes out an annual policy, what prevents them from cancelling the policy later?”

Still, Mr Munroe approved of removing the ‘birth month’ mandate. “We welcome that change because it actually has no bearing on coverage. It’s a moot point,” he explained. “It’s more than welcome. We have no issue with that, and I think the industry as a whole welcomes that. It eliminates the confusion and will be easier to administer.

“It was creating confusion in terms of what agents do when clients come in to renew. The best part of this legislation is the power to impound uninsured vehicles. Once that is done, and word gets around on social media, all those issues will go away and people will start taking out insurance.”