Cedric Stephens | Proof of insurance in a digital world

QUESTION: I went to tax office on Constant Spring Road last week to renew my car licence. It was month end and, by sheer luck, I was at the cashier’s counter within 15 minutes. I handed him the registration permit, certificate of fitness and a print of the cover note. He refused to accept the latter. He wanted to see the original document. It was only after I protested and specifically asked for a ‘bligh’ that he re-examined the cover note that I gave him. It was printed from a digital file my insurers sent me. He then reluctantly completed the transaction.  Was he correct in initially refusing to accept the document? My insurance is done online in order to save time. I was planning to store digital images of the certificate of insurance and other documents on my cellphone to show the police if I was stopped. This is now up in the air. What are your views? — R.J.R., Kingston 7

INSURANCE HELPLINE: Bank of Jamaica’s financial stability department head, Dr Leo-Rey Gordon, according to this newspaper, stated recently that “while the financial sector provides services that assist both directly and indirectly in the growth and development of the economy, it can do more”. I agree.

Can the sector also do things to remove some of the many hassles that plague our daily lives?

Dr Gordon’s comments were about deposit-taking institutions, that is, banks. He cited figures that showed “only 11 per cent of adults have borrowed money from a financial institution ... 25 per cent used a debit card ... 32 per cent made electronic payments and 65 per cent of wage earners still get paid in cash”.

He could have added that insurance companies were doing worse than the banks. Premiums make up only about five per cent of gross domestic product, the yardstick that measures the size of the economy. It should be much more than that, given the many risks that the society faces.

Financial sector companies including insurers, in spite of their shortcomings, other companies and government departments, are using information and communication technologies to make life easier. Cellphone text messages, automated teller machines, mobile money, social media platforms like Facebook and Twitter, online banking, WhatsApp, Skype, Online shopping, Online insurance buying, getting or renewing a passport, making applications to obtain or renew a US visa, and the filing and payment of certain taxes online are some examples.  

In the face of many changes taking place in the economy — and in Tax Administration Jamaica, especially — I find the cashier’s actions very puzzling.

Parliament passed an Electronic Transactions Act 10 years ago. Its objects are to: “(a) facilitate electronic transactions by means of reliable electronic documents; (b) promote the development of the legal and business infrastructure necessary to implement secure electronic commerce; (c) eliminate barriers to electronic commerce resulting from uncertainties over writing and signature requirements; (d) promote public confidence in the integrity and reliability of electronic documents and electronic transactions ... (e) establish uniformity of legal rules and standards regarding the authentication and integrity of electronic documents; (f) facilitate electronic filing of information with government agencies and statutory bodies and to promote efficient delivery of government services by means of reliable electronic documents.”

The information was derived from my visit to the Ministry of Justice website using the internet. I did not actually hold and examine the original law that was signed into law by the Governor General.

I made another visit to the Justice ministry’s website. What, if anything, did the Motor Vehicles Insurance (Third-Party-Risks) Act have to say about evidence of insurance? That law came into effect on January 1, 1941. This was long before the use of computers and other digital devices.

Section 9 says: “A person applying for a licence in respect of motor vehicles ... shall append to the application a certificate of insurance or a certificate of security, or shall produce such evidence as may be prescribed that either (a) on the date when the licence comes into operation there will be in force the necessary policy of insurance or the necessary security in relation to the user of the motor vehicle”.

The word ‘original’ does not appear before certificate in Section 9.

Section 10 reads: “Any person driving a motor vehicle on a road shall, on being required by a constable, give his name and address and the name and address of the owner of the vehicle or of and produce his certificate, and if he fails so to do he shall be guilty of an offence”.

Insurers have been plagued for years with counterfeit documents. Bogus cover notes and certificates of insurance are being sold. The tax office has every right to make sure that the documents that are presented are genuine. They already have systems in place to do so.

The taxpayer registration number and driver’s licence or other types of identification are tools that can be used. Taking steps to ensure that front line staff are familiar with the provisions of the 10-year-old law is another measure.

The Insurance Association of Jamaica can also use its considerable influence to communicate with the authorities — including the police — in order to ensure that the online initiatives of its members do not become entangled in red tape. Asking for a ‘bligh’ is so 20th century and, worse of all, it can encourage corruption.

- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com