Last week, in an effort to support a more consumer-oriented approach to the recent regulatory changes on compulsory motor third party liability (“MTPL”) insurance, the Romanian Financial Supervisory Authority (“FSA”) provided a number of clarifications.
The FSA clarified that when an insured sells a vehicle, the MTPL insurer, upon receipt of certain documents (e.g. insured’s express request, insurance policy, sale contract, etc.) must reimburse the seller for any paid premium, related to the unexpired insurance coverage period.
It was also confirmed that if, after the sale of a vehicle, the insured acquires another vehicle, upon express request and upon the provision of various documents to the MTPL insurer, the insured could transfer the bonus accident class to the new vehicle. This now provides consumers with the benefit of a lower premium and better contractual terms.
Another clarification made by the FSA is that owners of multiple vehicles will receive the benefit of the same bonus-malus accident class for all vehicles and the bonus-malus will be the best bonus class amongst all owned vehicles (rhe bonus-malus classes are used to reward insureds who have no accidents during the policy terms and penalise those who have). For instance, now if an owner has two vehicles and vehicle A falls under bonus B1 class, but vehicle B falls under malus M3 class, then upon MTPL insurance renewal both cars will be subject to the bonus B1 class, giving the consumer the highest benefit. Previously, the practice of the market was to apply a different and independent bonus-malus class for each vehicle owned by the same person.