A draft law seeking to reform how accident victims are compensated in Rwanda has sparked debate among insurers, who say the changes could bring much-needed clarity and sustainability to the system. Tabled before the lower chamber of Parliament by Godfrey Kabera, the Minister of State for National Treasury on June 11, the draft law on accident compensation seeks to recalibrate compensation rates for victims of road accidents involving insured vehicles — particularly those without verifiable income. At the heart of the reform is a shift to replace the current Supreme Court-imposed compensation benchmark of Rwf3,000 per day – amounting to Rwf90,000 per month – with a lower, tax-free income cap of Rwf60,000 per month – or Rwf2,000 per day for an accident victim without verifiable income. ALSO READ: Insurers petition Supreme Court over minimum wage Solange Muteteri, Claims Director at Radiant Insurance, told The New Times that the proposed revision to accident compensation calculations is “a necessary and data-driven adjustment that balances fairness for victims with the long-term stability of the insurance sector.” “It is known that in Rwanda, a good portion of earners receive a monthly salary below Rwf90,000. This means that under the current Supreme Court-mandated compensation rate (Rwf3,000 per day or Rwf90,000 per month), an accident victim without verifiable income or no regular income, not at all, could receive more than many formally employed Rwandans, an imbalance that risks distorting fairness and incentivizing disputes and frauds,” she said. ALSO READ: Over 165,000 workers earning up to Rwf60,000 a month set to get tax relief Furthermore, the Supreme Court’s 2016 ruling, though well-intentioned, was based on a single case and, due to judicial precedent, effectively became law by accident, Muteteri said, adding that while the court’s decision provided necessary guidance at the time, it was not grounded in comprehensive economic analysis. “The new proposal corrects this by anchoring compensation to the tax-free income threshold (Rwf60,000/month or Rwf2,000/day), which is both legally consistent and economically realistic,” she observed. On the potential impact this specific proposal – once adopted – could have on the insurance industry, Muteteri said it directly tackles insurers’ key grievances by removing distortions in compensation through aligning payouts with actual income levels, as well as providing legal certainty. Here, she said that the Supreme Court’s “ad hoc ruling” left room for ambiguity, whereas the proposed law establishes a clear, statutory benchmark tied to existing tax policy. Another way through which the move could help, she said, is safeguarding the insurance industry. “Excessive compensation claims threatened the sector’s viability. By adopting a sustainable rate (Rwf2,000/day), the bill reduces financial pressure on insurers, potentially stabilizing premiums and encouraging broader coverage,” she argued. While justifying the relevance of the bill, Kabera argued the move is necessary to align with national income realities and ensure sustainability in the insurance sector, which has long warned that the existing framework inflates payouts and threatens the industry’s viability. Jean-Damascene Ruzigande, Technical Director at Prime Insurance, told The New Times that as the proposed legislation is still under consideration in Parliament, and its provisions cannot take effect until a ministerial order is issued to operationalise them, “it is premature to provide a comprehensive assessment of its impact at this stage.” That said, “we acknowledge that the bill introduces several important changes,” he pointed out, stating that the provision on compensation for victims without verifiable income being calculated based on the tax-free income threshold is only one among many. “Other proposed changes, such as new approaches to compensating victims under the age of 16, will also need to be carefully analysed before a full picture emerges,” he said, adding that accident victims under the age of 16 were not compensated under the existing legislation. The draft law provides that a person who has suffered a permanent incapacity and beneficiaries of a person killed in an accident are entitled to compensation, including compensation for financial loss. For children under 16, it proposes, compensation for loss of future earnings should be paid to the child who has suffered a permanent disability or their dependents in the event of death. This compensation covers the potential years of employment between the age of 16 years and that of retirement, which is currently 65.
