Starting with 1 January this year the Republic of Moldova has implemented new tariffs for MTPL and Green Card Insurance, developed by a new calculation method based on risk factors and damage rate.

   Thus, “the new achievement was the passage from those fixed fees determined by the Government for each class of insurance to a classic method of calculation of insurance premiums based on actuary principles”, declared Vladimir STIRBU, Director of Insurance Department, National Commission of Financial Market. He said that the procedure complies with international standards and is the result of long negotiation between all stakeholders, including trade unions, patronage and the Government. Introduced changes provide for a fixed premium to which a correction factor is added depending on vehicle type, engine capacity, number of seats etc., for both MTPL and Green Card Insurance. At the same time, fee calculation for Green Card insurances will also take into account the area based on a classification into three categories: Area 1 – Ukraine and Byelorussia, Area 2 – Russia, Ukraine, Byelorussia and Area 3 – all Green Card System countries. Concurrently, parties are considering a reduction of insurance premiums, which will also affect insurers’ income. “For Chisinau residents premiums will be increased, while in the rest of the country fees will be reduced up to 40%, depending on accident statistics and registered damages”, mentioned Vladimir STIRBU. Insurers appear a bit reserved regarding the new calculation method, questioning the correctness of statistics taken as basis for calculation of fees and certain deficiencies regarding criteria of calculation of fees for certain types of vehicles.
“Increase in insurance premiums will inevitably lead to less income in 2009. According to a research, application of current fees for contracts signed within the first 10 months of the previous year results in the loss of about 1.5 million euros”, said Pavel CATER, Director of Auto Insurers’ Bureau of the Republic of Moldova. Still, approved fees are not final. “It is possible that upon analysis of results of year 2008 the fees could be revised, most probably at the end of the first quarter this year”, specified Vladimir STIRBU. According to a research conducted by the Institute for Development and Social Initiatives (IDSI) “Viitorul”, the volume of mandatory insurance in the third quarter of 2008 made up 46%, 23% of which were due to MTPL Insurance, 22% - Green Card Insurance, and 1% - Mandatory Civil Liability Insurance of Vehicle Owners. Only four out of the 33 companies registered in the market hold a license for Green Card Insurance, and MTPL Insurance makes up over 50% of portfolios of six companies.

 

 

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