Authored By: Yonas Wondaferew Menilshewa
ABSTRACT
This study investigates the jurisdictional challenges associated with the implementation of the COMESA Yellow Card Scheme (hereafter YCS), focusing on both legal and practical perspectives. The YCS, established under the COMESA Treaty and its Protocol, is a regional third-party motor vehicle insurance program aimed at facilitating cross-border motor vehicle travel and ensuring compensation for accident victims among COMESA members state.
INTRODUCTION
Regulation was required and implemented in the 19th century to safeguard road users and others. In the UK, mandatory motor insurance was first implemented in 1930 by the Road Traffic Act1[1]. This mandatory third-party mother insurance was implemented both nationally and regionally. The common market for eastern and southern Africa (hereafter COMESA) members decided to create a mandatory third-party insurance program after observing the positive outcomes of other nations that have adopted international insurance programs[2]. The yellow card is a card or paper colored yellow and it certificate issued for the payment of compensation as per the protocol signed in relation to vehicle insurance against third party risks by member states of the COMESA[3]. It is a third party liability insurance system that provides coverage for vehicles traveling across COMESA member countries. Its practical application has encountered serious jurisdictional ambiguities. This legal article identifies major obstacles, including fragmented legal frameworks and divergent judicial interpretations.
LEGAL FORMATION AND INSTITUTIONAL FRAMEWORK
With the goal of promoting and achieving the aims and objectives of the common market, the COMESA member states undertook to adopt Compulsory Motor Third Party Liability Insurance (here in after the protocol) scheme in both the Preferential Trade Area and the COMESA Treaties. It was established on December 4, 1986, in Addis Ababa. The COMESA YCS was introduced on the 1st July 1987[4]. Thirteen member nations have ratified the protocol. Democratic Republic of Congo (DRC), Ethiopia, Burundi, Eritrea, Malawi, Kenya, Rwanda, Swaziland, Somalia, Tanzania, Uganda, Zambia, and Zimbabwe were among them. There are 330 insurance companies in the region in the 13 countries where the YCS is in effect.
The relevant YC instruments under the COMESA Treaty hub, The COMESA Treaty (1994), Protocol (1986), Inter-Bureau Agreement (1987), Constitution of the Reinsurance Pool (2007), Guidelines for the NBs and member insurance companies on the implementation of the YCS (1999) and Operation Manual (2015) are some of the legal documents for the YCS.
LEGAL AND PRACTICAL CHALLENGES IN THE IMPLEMANTATION OF THE YCS COMESA MEMBER STATE
Ambiguity on the Scope of Coverage
Have several challenge and ambiguity on the scope coverage of implementation COMESA yellow card scheme the extent of coverage is not always clearly defined or uniformly interpreted across member states[5]. Some of the key areas of ambiguity include Types of Risks Covered, Geographical Coverage, Jurisdiction & Applicable Law, and Coverage Limits & Exclusions.
Domestic Motor Insurance Claim Practices of Member States
In fact, when an accident occurs between different member state motorists abroad, they are largely inclined to report accidents to their comprehensive insurers and the insurers simply prefer to bring back the damaged property from member countries and the normal domestic claim practice proceeds[6]. Insurer who compensated the victim then proceeds against the party who is held liable for the occurrence of the accident locally. The trend is prevalent in relation to the YCS and being receiving such claim for payments.
Private International Law as an Issue in the YCS
Any claim arising as a result of the accident would be dealt with in accordance with the law of the country concerned. However, if this scenario takes on a cross border nature so that one of the vehicles is from a country foreign to the place where the accident occurs, a question arises as to which law should be applied and to which court the claim should be brought[7].
INSTITUTIONAL FRAMEWORK OF THE YELLOW CARD SCHEME
The Council of Bureau (CB)
One representative and an additional representative chosen by each National Bureaus (NB) make up the CB’s membership. For duration of one year, the Chairman and Vice Chairman ought to be chosen by rotation from among the representatives. Half of the CB’s members will form a quorum, and the board will convene once a year with the option to call extraordinary sessions at the request of any NB[8]. Coordination and oversight of the Scheme’s legal, administrative, and financial operations fall under the purview of the CB. It is the highest authority for directing, coordinating, and overseeing all of the YCS’s legal, administrative, and financial activities[9].
National Bureaus (NBs)
In each participating state, the National Bureau (NB) is a government-designated organization in charge of overseeing and managing the YCS. All regional cross-border MTPL insurance plans use identical bureaus. The NB in each Member State is in charge of the day-to-day operations pertaining to the YC[10]. According to the Protocol, each NB must consist of insurers approved by the regional regulatory bodies to provide insurance against the risk of motor vehicle liability.
OPERATIONAL MECHANISM
Coverage and Validity
The guarantee offered by the COMESA YC, It insures compensation for injuries, deaths or property damage caused by insured vehicles in cross-border accidents, eliminating the need for separate insurance in each country[11]. Will match the driver’s third party liability in line with the laws and regulations in effect in the nation where the accident happened for a party whose territory insurance is not required by law.
Issuance Process
According to the Protocol, YCS participants are divided into principal and subsidiary categories. Principal participants are the signing member states, while subsidiary participants are the insurers who conducted insurance operations against liability risks related to auto accidents[12]. A subsidiary participant’s primary responsibility is to provide its policyholders with YC, which ensures that they have sufficient protection against MTPL hazards that they might encounter in the countries they travel[13]. They also have to reimburse NB and help cover the NB and council of bureau (CB) running costs.
However, according to the manual, the YC is equivalent to an insurance policy that is accepted as a legitimate motor insurance certificate and proof of a commitment to provide the mandatory minimum insurance coverage mandated by the laws of the participating states where accidents involving vehicles from other member countries have occurred.
Claim and Compensation
The Handling Bureau (HB) is responsible for informing the Issuing Bureau (IB) of the reported claim and providing a thorough accident report. Claims under $15,000 must be handled and settled by the HB with prior approval from the issuing bureau[14]. If the claim total is more than $15,000, the HB must get the IB’s approval. The HB has the authority to receive legal process served against the insured. It will set up the suit’s legal defense. The legal fees and expenses incurred shall be charged to the insurers through the accounts of the IB[15]. When an insured party or the IB hires a lawyer without the handling bureau’s express approval, the HB will not be held accountable for managing claims or paying legal fees.
COMPARATIVE PERSPECTIVES FROM OTHER BLOCS
The Brown Card System of the ECOWAS
Protocol A/P1/5/82 created the ECOWAS Brown Card Scheme on May 29, 1982. Having a Brown Card gives a driver complete coverage for a speedy, equitable, and immediate settlement for any accident they may have caused outside of their nation[16]. The driver is treated the same way they would if their basic insurance policy were underwritten with a business that operates in the nation they are visiting or through when they are traveling through an ECOWAS member country[17].
RECOMMANDATION
- Amend the Insurance the Motor Vehicle Insurance Proclamation to explicitly incorporate the COMESA Yellow Card Schemes procedural and jurisdictional requirements, including reference to the Protocol and Inter-Bureau Agreement.
- Establish a dedicated directive or subsidiary legislation that governs the administration of the YCS among COMESA member states, outlining the respective responsibilities of courts, the National Bureau, insurers, and regulatory authorities.
- Introduce judicial guidelines or bench books for judges on handling COMESA YCS cases, including conflict-of-law considerations and model approaches for jurisdictional analysis.
CONCLUSION
In conclusion, successful implementation of the COMESA Yellow Card Scheme requires harmonizing legal provisions, strengthening institutional structures, and building judicial capacity. Legal certainty, procedural consistency, and stakeholder engagement are crucial to realizing the schemes objectives of regional integration, trade facilitation, and victim protection.
REFERENCE(S) / BIBLIOGRAPHY
Luk De Baere & Frits Blees, Insurance Aspects of Cross-Border Road Traffic Accidents (Eleven Intl Publg 2019).
Raymond M. John, the Exercise of Concurrent International Jurisdiction: Move with Circumspection, 15 B.C. Indus. & Com. L. Rev. 123 (1974).
Elton Zingwevu & Athenia Bongani Sibindi, Is Compulsory Third Party Motor Insurance the Panacea for the South African Insurance Industry? 11 Corp. Ownership & Control 657 (2014).
Protocol on the Establishment of the Third Party Motor Vehicle Insurance Scheme, COMESA, Dec. 4, 1986, 1987 COMESA Official Gazette No. 1, available at https://www.comesa.int/wp-content/uploads/2023/06/COMESA-Gazette-Volume-No-28.pdf
Protocol A/P.1/5/82 on the Establishment of an ECOWAS Brown Card Relating to Motor Vehicle Third Party Liability Insurance, ECOWAS, May 1, 1982.
Common Market for Eastern and Southern Africa, Annex XIV of the COMESA Treaty: Protocol on the Establishment of a Third Party Motor Vehicle Insurance Scheme (1986).
[1] Michael Poll and Graham Williams, CII motor insurance ,M94 2018-2019, page 1-12
[2] Common Market for Eastern & S. Afr., Guidelines for the National Bureau and Member Insurance Companies on the Implementation of the Yellow Card Scheme, 99-201/gmm.
[3] Vehicle Insurance Against Third Party Risks Proclamation No. 799/2013, Fed. Negarit Gazeta, July 23, 2013, at 3 (Ethiopia).
[4] Common Market for Eastern & S. Afr, supra note 2
[5] Interview with Mr. Danial Shferaw, Senior Insurance Attorney, Nile Insurance S.C., in Addis Ababa (Aug. 21, 2025).
[6] Ibid
[7] Jenny Papettas, The Law Applicable to Cross-Border Road Traffic Accidents (Ph.D. dissertation, University of Birmingham, School of Law, Sept. 2013).
[8] Protocol on the Establishment of the Third-Party Motor Vehicle Insurance Scheme art. 16(1), Common Market for Easter and southafrica (COMESA) available at https://www.comesa,int/wp-content/uploads/2019/06/8CSIDJ1.pdf.
[9] Ibid, article 16 (2)
[10] Keneaa, Zekarias. Legal and Institutional Framework of the COMESA Yellow Card Scheme. Addis Ababa University, 2021.
[11] Interview with Mr. Danial Shferaw, Supra note 5
[12] Supra note 8, art. 4(2)
[13] Ibid
[14] Common Market for Eastern and Southern Africa (COMESA), COMESA Yellow Card Scheme: Governance and Reinsurance Structure (UNECE Presentation, 2022), https://unece.org/sites/default/files/2022-10/ECE-TRANS-SC1-Presentation-2022-15e_0.pdf
[15] Ibid
[16] Economic Community of West African States, ECOWAS Brown Card, ECOWAS (Sept. 8, 2022), https://www.ecowas.int/special_agency/ecowas-brown-card/ecowas-brown-card/.
[17] Ibid
