Activating driver’s liability compulsory insurance is inevitable – AYFB
Driving force of the insurance industry is obligatory insurance, Yet, in Georgia, such simple matters as easening vechile and other insurances to protect and comfort citizens are not resolved.
In every developed country there are numerous such insurances.Obligatory insurance in these countries is the main tool of risk management.
One major part of obligatory insurance is Motor third party vehicle insurance and it covers civil legal liability for damage caused to third party by driving the motor vehicle, which means that this will not be paid by a driver, but by the insurance company which issued the policy.
Works on the “Compulsory Insurance of Liability of Vehicle Owners towards Third Parties” bill,in Georgia began in 2013 and postponed to 2017,this year.
The activation of the mandatory insurance for vehicle owner responsibility to be of utmost importance to the country’s economy and its residents, as well as being critical for the insurance sector itself-According to the Association of Young Financers and Businessmen (AFBA)
Currently AFBA is facilitating a study which will make it clear how informed car owners are regarding the insurance product about to be implemented in the future, as well as gauge the loyalty of vehicle owners towards the mandatory responsibility insurance. The study will evaluate the social-economic impact of this product throughout its implementation progress.
Implementing the mandatory insurance for vehicle owner responsibility was announced since 2015, although there’s no according legislative initiative in the parliament from the government’s side. Relevant parliament committees are waiting for that very governmental initiative, after which certain procedural steps will be made.
Wholesome insurance industry assets throughout advanced countries fluctuate between 25% and 5% towards internal products. From this standpoint Georgia’s state doesn’t offer much perspective. For the country to have a higher level of insurance culture and at the same time experience growth in the sector and turn its advancement into an irreversible process, the insurance companies itself must increase marketing activities and intensively start taking care of product publicity. The second important condition is the implementation of mandatory insurance products. For this angle the first step to be discussed should be the matter of implementing mandatory insurance for vehicle owner responsibilities.
Mr Devi Khechinashvili, President of Insurance Association said that the government should take responsibility for managing these risks, there needs to be a modern system implemented which will, in technical terms, house itself entirely in the cloud. There are international companies who can adapt cloud systems to Georgia on short notice.
The Georgian market is an unattractive one for investors, since a market without insurance is practically unmanaged.
It’s important to seek arguments for the government and the parliament to accept the MTPL law this year, so it becomes active in 2017. Meanwhile, the needed infrastructure will be formed, which will be relevant for user security. The insurance companies and the administration will undergo serious preparations, as will the patrol police and the drivers. Best case scenario would involve the law being split in two stages, with one covering local insurance on damages inflicted to Georgian citizens via transit movements, and the second being the introduction of the insurances themselves.
MTPL is an insurance of a totally different nature which has no-fault regulations, which means it provides compensation no matter the circumstance.
MTPL is a social project, with its main goal being to ensure swift and bureaucracy-free compensation of all vehicle accident damages.
Insurance must find a way into government execution practices, and mandatory insurances will create the needed drive for this to happen. This will contribute in advancing the market and attracting investors, there is no otherwise technical issue in activating the vehicle insurance. It’s the changing of the law and the attitude in governmental planning that holds the utmost importance.
President of Georgian Insurance Institute George Gigolashvili told to CBW that the financial security of insured individuals during vehicle collision accidents will be high, insurance companies will have additional incomes, the staffing for this type of insurance will increase and the infrastructure will experience advancements.
It will lessen the problematic matters around the fees for compensating damages after vehicle collisions and will hasten these compensation deadlines, so that the victims don’t have to wait months for their recompense and receiving only part of it. At the same time the insured vehicle owners won’t have to get into debt or sell their property in order to compensate inflicted damage.
The implementation of the mandatory vehicle ownership responsibility insurance to be one of those initiatives which will considerably raise the social security of the citizens and become a serious contributing factor in business advancement. Accordingly, its implementation and timely activation is in everyone’s interests, be this vehicle owners, the insurance sector or the government.