The document provides an overview of compulsory motor third party liability insurance in Mozambique, highlighting its legal framework established by Law No. 2/2003, which mandates insurance for road vehicles to cover civil liability for damages caused to third parties. It discusses the implications of the transition to a free-market economy in 1991, the roles of various stakeholders in the insurance market, and the current practice of issuing short-term insurance certificates for cross-border travelers. The presentation emphasizes the significance of this insurance in light of increased road traffic and accident rates in Mozambique.

1. Compulsory Third
Party Insurance in
Mozambique
Presentation
4 February 2016
Presented by Henri Mittermayer

2. Compulsory Motor Third Party Liability Insurance
Presentation Structure:
I. Introduction – brief history
II. The Law nr. 2/2003, of 21 January
III. Compulsory Insurance – definition
IV. Compulsory Motor Third Party Liability and
the Insurance Law
V. What is happening on the ground
VI. Final notes/ comments

3. Compulsory Motor Third Party Liability Insurance
I. Introduction – brief history:
In 1991, Mozambique changed from socialist to free
market economy. mozambican parliament regulated
that any insurance and reinsurance activity could be
explored by either public or private entities, as long as
those entities were duly licensed.
The supervision of the insurance activity is under the
mandate of the Ministry of Finance -more specificaly
the ISSM an entity subordinated to the Ministry of
Finance, which is responsible for the supervision of the
Insurance activity in Mozambique.

4. Compulsory Motor Third Party
Liability Insurance
IV. The Law nr. 2/2003, of 21 January:
In terms of this law “the motor third party liability
insurance is compulsory in the Republic of
Mozambique” and,
The transit on public roads of vehicles and trailers
without the respective insurance cover obtained from
an insurance company licensed in Mozambique is not
allowed.
This insurance covers the civil liability of people or
entities responsible for patrimonial and non-patrimonial
damages caused to third parties as a consequence of
any road accidents

5. Compulsory Motor Third Party Liability Insurance
II. Compulsory Insurance:
Compulsory Insurance can be defined as any type of
insurance an individual or business is legally required
to buy. Compulsory insurance is mandatory for
individuals and businesses that want to engage in
certain financially risky activities, such as operating an
automobile or operating a business with employees.
In Mozambique the following insurance classes are
“compulsory”:
 Motor third party liability insurance;
 Workman compensation insurance;

6. Compulsory Motor Third Party Liability Insurance
III. Compulsory Motor Third Party Liability and the
Insurance Law
 As per the Mozambican Insurance Law, all the
compulsory insurance contracts in Mozambique must
be governed by the laws of Mozambique.
 This is an exception to the general norm in terms of
which, the parties entering into an insurance contract
to cover risks located in Mozambique are free to chose
the law to govern their contract.

7. Compulsory Motor Third Party Liability Insurance
IV. The Law nr. 2/2003, of 21 January:
The following were the key motivations for the approval and
publication of this law:
The growth of the road traffic in Mozambique, mainly in
Maputo;
The proliferation of vehicles in Mozambique without any
insurance;
A significant increase of road accidents, mainly the so called
“Hit and run”.

8. Compulsory Motor Third Party Liability Insurance
IV. The Law nr. 2/2003, of 21 January:
Who should insure for third party liability?
 The owner of the vehicle or asset.
Any person or institution with usufructuary rights to the
vehicle or asset.
Lessee, in case of leasing.
 if any other person contracts the insurance as required
by the law, the legal obligation of the above mentioned
people is considered as being complied with.

9. Compulsory Motor Third Party Liability Insurance
IV. The Law nr. 2/2003, of 21 January:
Minimum required sums Insured:
 300,000.00MZN
 20,000.00MZN maximum limit of indemnity to each
passanger, for vehicles licensed for passanger transport
(sum insured – 20,000.00MZN x nr. Of allowed
passangers + 300,000.00MZN)

10. Compulsory Motor Third Party Liability Insurance
IV. What is happening currently:
Short Term Certificates Sold at the Border :
What does the policy cover?
The policy covers The Insured for any Third Party
Liability that might be incurred in Mozambique caused
by or in connection with any vehicle described in the
certificate of insurance.

11. Compulsory Motor Third Party Liability
Insurance
IV. What is happening currently :
Short Term Certificates Sold at the Border :
The cover extends to both:
Death or bodily injury to any third party, other than to a
person employed by the Insured or arising from the
course of employment or if the person is a member of the
same household.
Damage to all property, other than that property that
belongs to the Insured.

12. Compulsory Motor Third Party Liability Insurance
IV. What is happening currently:
Short Term Certificates Sold at the Border:
Why is it compulsory?
Mozambique does not have an MVA Road Accident
Fund - as in South Africa.
In respect of foreign registered vehicles the
Mozambican authorities need to be assured that if any
liability is incurred by the use of such vehicles on their
roads; there is a Mozambican Insurance Policy that is
valid to cover liability costs.

13. Compulsory Motor Third Party Liability Insurance
IV. What is happening currently :
Short Term Certificates Sold at the Border :
How long is the period of insurance?
The certificate is valid for 30days from date of inception
noted on the certificate or date of entry into Mozambique
- Unless otherwise arranged with Insurer.

14. Compulsory Motor Third Party Liability Insurance
IV. What is happening currently:
Short Term Certificates Sold at the Border:
What is the limit of liability?
Unless otherwise stated in respect of any one
occurrence Liability shall not exceed the limit of
R1,000,000.00 (one million SA Rand)

15. Compulsory Motor Third Party Liability Insurance
IV. What is happening currently :
Short Term Certificates Sold at the Border:
Pricing:
Pricing is standard across all insurers .

16. Compulsory Motor Third Party Liability Insurance
VI. Final notes:
Risk Assessement and Fleet Managment.
 Underinsurance – Risk to the transport company.
Not a legal assistance policy !
 Managing the purchase of individual certificates.
• Consider : Alternative forms of purchase
• Annual cover / e-purchase.

17. Compulsory Motor Third Party Liability Insurance