Financial responsibility laws in general and compulsory motor vehiclerninsurance in particular have basically one major objective--to makernmotorists financially capable of meeting accident liabilities and hence tornguarantee compensation to the accident victim. Unlike other countries,rnEthiopia recently promulgated Vehicle Insurance against Third PartyrnRisks, procl.559/2008 in J anuary 2008, a compulsory insurance schemernwith the same objective.rnThe legal regime of this law includes the requirement of the law,rnindicating its obligatory nature, its scope of a pplication including anyrnperson even pedestrians except the in sured person, member of hisrnfamily, the driver or any person employed on the vehicle , and insurancernpolicies. Besides, the duties of the insurer and the insured, the provisionrnof emergency medical care and the recognition of the yellow card systemrnof the COMESA and SADC are basic substantive characteristics of thernlaw.rnTuring to its institutional framework, the law makes motor vehiclerninsurance against third party ri sks involunta ry . Apy vehicle except thosernexempted, are expected to display stickers on their wind screens thernfailure of which entails a civil and criminal lia bility on the driver/owner.rnThe police shall deta in the vehicle until insurance certificate isrnpresented.rnAn insurance fund for faults committed by uninsured and untracedrnvehicle is establis hed. Institutions which are believed to effectivelyrnenforce the law are indicated in the law even though, to the dismay ofrnmany, to this date enforcement of the law is not begun.rnThis new law in its application would ce rtainly have its own positiverna nd/ or negative effects on insure rs, acciden t prevention and owners ofrnmOLOr vehicles. With less cost in rela tively s peedy procedures, victims ofrncar accidentsrnimplemented.rnwill get compensation at the time when the law is