Handy solutions to rising MTPL policy prices

In the context of the withdrawal of the operating licence of the insurance company CITY INSURANCE and the promotion of the application for the opening of insolvency proceedings against the leader of the MTPL market by the Financial Supervisory Authority, a large number of insurers on the market, including those offering the most advantageous prices for insurance policies, have significantly increased their prices.

If you request an offer from an insurer for an insurance policy and the cost of the offer received is considerably higher than the reference rate in force, you may, under certain conditions, contact the Bureau of Motor Insurers in Romania (BAAR) to take out an insurance policy through them.

In this context, the Financial Supervisory Authority requires all insurance intermediary companies to immediately inform all customers that if they receive from at least three different insurers offers whose MTPL insurance premiums for 12 months are 36% (Factor “N”) higher than the reference rate for the risk segment to which they belong, they are classified as high-risk insureds, according to Law No 132/2017. This type of customer can ask BAAR for an offer to conclude an MTPL contract.

How do you know if you are in the high-risk category?

The “N” factor is determined by BAAR. It is calculated for a vehicle with the same technical characteristics as the vehicle for which insurance is claimed and for the same bonus/malus class of the insured/user.

The technical characteristics of the vehicles will refer to their cylinder capacity, except for vehicles with electric motors, in which case their power will be taken into account.

To make the calculation easier to understand, BAAR provides an example:

• Vehicle for which insurance is requested: passenger car; cylinder capacity: 1.461cmc
• Holder: natural person; 45 years old
• Bonus-malus class for the vehicle for which insurance is requested: B4
• Insurance offers received (without direct settlement fee and without premium for additional clauses and coverages): 950 lei, 975 lei, and 999 lei
• High-risk premium = 854 lei X 1,36 X 80% = 929 lei

Thus if the high-risk premium is lower than the offers received, your claim falls into the high-risk category. In this case, you can apply to BAAR for the allocation of the insurance contract.

The offer does not relate to the insurance premium you paid on the previous policy, i.e., during the last year, but to the current reference rate published by the ASF.

The insurance premium is calculated by BAAR strictly for insurance policies with a term of 12 months.

What do you have to do if you fall into the high-risk category?

According to Article 19 of Law No 132/2017, a high-risk policyholder may apply to BAAR for an insurance offer, and BAAR will formulate an insurance offer calculated on the basis of the reference rate and will allocate an MTPL insurer for the conclusion of the MTPL contract.

The steps you need to follow to request a quote are:

Log in to the BAAR application for registering high-risk insured cases, available at https://public.riscridicat.ro, and fill in the data requested by the application, to which you will attach the documents required for processing, namely:

1. Offers to take out a motor insurance policy for a minimum of 12 months (minimum 3, from different insurers);
2. The registration/registration certificate of the vehicle for which insurance is requested; strictly for cases where the offer is made for the issue of policies for subsequent registration, in the absence of the registration certificate (registration slip), the vehicle identity card (CIV) may be presented together with a document attesting the right of ownership or use of the vehicle (e.g., sale/purchase contract, leasing contract, etc.);
3. Identity card of the owner/user of the vehicle – the natural person for whom insurance is requested;
4. Certificate of registration in one of the registers provided for by law (ONRC, Register of Associations and Foundations, etc.) and the tax registration certificate of the owner/user of the vehicle – a legal person or other tax-registered entity for which insurance is requested;
5. The mandate of the conventional representative is if the claim is made by a person other than the insured (e.g., a brokerage company).

You can also request BAAR’s allocation to an MTPL insurer by submitting the completed quotation request form with the supporting documents mentioned above in one of the following ways:

E-mail: [email protected]

Fax: 004 021 319 13 01

Vasile Lascăr Str. 40 – 40 bis, Et. 6, Sect. 2, Bucharest, Postal Code 020502.

BAAR shall settle the high-risk policyholder’s request for the conclusion of the MTPL contract within a maximum of 20 days after the complete submission of the documents requested by BAAR.

The offer must be explicitly accepted by the high-risk policyholder to allocate the MTPL contract to an MTPL insurer.