The new Law on Mandatory Health Insurance, which comes into effect on January 1, 2009, imposes a new obligation on insurance companies engaged in mandatory automobile liability insurance to finance mandatory health insurance, prompting insurers to consider increasing the prices of mandatory automobile liability insurance in the coming year.
This was announced today by the Croatian Insurance Bureau (HUO), which explains that under this law, insurance companies will have to allocate an amount of 10 percent of the collected functional premium for automobile liability insurance as “an amount representing compensation for damages caused” to the Croatian Health Insurance Fund (HZZO) caused by the owners or users of the insured motor vehicle.
“This represents a financial obligation of over 250 million kuna annually that insurance companies will have to pay, which far exceeds the actual damage caused by users of insured vehicles, which all insurers are already paying according to the provisions of the Law on Mandatory Traffic Insurance,” stated HUO.
Considering the findings of the Analysis of the Market for Mandatory Automobile Liability Insurance by the Croatian Actuarial Society regarding the inadequacy of current levels of automobile liability insurance premiums, insurance companies are “reviewing their own price lists for automobile liability insurance premiums, into which they will have to incorporate an increase in the prices of mandatory automobile liability insurance in the coming year.”
Other activities that may contribute to reducing the damage that such a provision brings to the operations of insurance companies engaged in this type of insurance will also be considered, such as submitting a proposal to initiate a procedure for assessing the compliance of the provisions of the law with the Constitution of the Republic of Croatia, conclude HUO.
