On 17 April 2017, the Official Gazette published a norm on the calculation method for mandatory motor third party liability insurance reference fees (“Norm 15”). Norm 15 is the result of the Romanian Financial Supervisory Authority’s (“FSA”) efforts to increase transparency on how insurers calculate insurance fees.
According to Norm 15, the FSA must determine reference fees based on: the probability of occurrence and the severity of an event; the history of incurred events; and the projections of the trends. The FSA uses historic market-aggregated data from the previous five years to determine the reference fees for various types of motor vehicles.
Complex actuarial calculations also factor into the reference fees. These calculations encompass: (i) data on the bonus/malus system which adjusts fees based on claim history; (ii) administrative and acquisition costs, established as a percentage of the gross premium; and (iii) the insurer’s profit.