The Legal and Practical Aspects of Palestinian Road Accident Victims Compensation Funds ( PRAVCF)
Firstly, Mr. Al Disi presented the legal framework that regulates PRAVCF operation. PRAVCF is an arrangement provided by the Paris Economic Protocol, signed between the Palestinian National Authority (PNA) and Israeli Government. The Paris Protocol prescribed that a Palestinian fund would be established and replace the Israeli fund to compensate road accident victims. Therefore, PRAVCF should continue to pay indemnities to road accident victims, who do not receive compensation from insurance companies.
In 1995, PRAVCF was established in accordance with a law. The Insurance Law No. 20 of 2005 has replaced the old law and now regulates operation of PRAVCF.
Financial resources allocated for PRAVCF basically comprise 15% of premiums of compulsory vehicle insurance. This means that PRAVCF is financed by the insured. PRAVCF also enjoys a judicial character and has a board of directors. The new Law identifies members on the PRAVCF Board according to their functional capacities. In contrast, the old Law defines those members by their names.
Mr. Al Disi also addressed the practical aspects of the PRAVCF operation, including PRAVCF relation with insurance companies. Initially awkward, many problems were in place. For example, funds procured by insurance companies were not transferred to PRAVCF. Moreover, insurance companies used to claim that PRAVCF did not meet its respective financial obligations. As a result, boards of the PRAVCF and Insurance Consortium signed a memorandum of understanding in order to settle pending issues as well as develop a vision of future relations between them.
On the other hand, the relation governing PRAVCF operation with the Israeli Road Accident Victims Compensation Fund (KARNIT) is unclear. So far, funds received by PRAVCF from KARNIT are not known. Moreover, auditors did not provide PRAVCF with the audited financial statements of 2005/2006. Therefore, the financial status of PRAVCF is vague.
Territorial jurisdiction of the PRAVCF operation, particularly in Areas (B) and (C) pose further practical problems. PRAVCF is not capable of answering many questions regarding rights of injured persons, such as those injured by uninsured Israeli vehicles in road accidents in Areas (B) and (C), or in areas under full PNA security control.
In addition, Mr. Al Disi addressed several major predicaments, which currently impede PRAVCF operation in the Gaza Strip. Over 90% of vehicles in Gaza are uninsured, which means that PRAVCF will definitely be responsible for covering potential road accidents. Furthermore, more than 6,000 motorcycles were imported to Gaza after Rafah Crossing was opened, taking into account that more than 99% of riders do not bear relevant licences. In this context, a compelling question needs be answered: Who will cover injured persons if they do not receive compensation from insurance companies or PRAVCF?
Should such a situation persist in the Gaza Strip, the speaker made clear that PRAVCF will be obliged to bear a huge financial burden that may result in its bankruptcy. Accordingly, PRAVCF must operate within limits of compulsory insurance. If it becomes insolvent, the PNA Treasury is definitely the guarantor.
Finally, Mr. Al Disi announced that PRAVCF Board sent a letter to the PNA Council of Ministers inquiring about enforcement of the relevant law in the Gaza Strip. The Council of Ministers decided the PRAVCF operation was to be suspended.
