Installment payment of compulsory auto liability insurance for everyone and suspension of the policy if the car is not used – the proposals of the Financial Supervisory Authority following negotiations with carriers

Payment in installments of compulsory auto liability insurance and policy suspension if the car is not used – the proposals of the Financial Supervisory Authority (ASF) following negotiations with carriers. The ASF announced on Thursday that compulsory auto liability insurance (RCA) could be paid in installments and suspended while the vehicle is not in use, following discussions it had over the past few days with representatives of Romanian carriers and insurance companies.

Following these discussions, the ASF “is considering measures included in an action plan” aimed at reducing the financial burden on RCA policyholders. Among these measures are:

1. The possibility of suspending the effects of the RCA contract while the vehicle is not in use, extending its validity for the suspension period;
2. The option to pay the RCA premium in installments, regardless of its level, for both individuals and legal entities, with the installment payment option being at the discretion of the potential insured;
3. Revising the way the RCA premium rate is determined for contracts concluded for less than 12 months, to reduce the significant price difference between annual and sub-annual policies.

In the discussions, the necessity for the Bureau of Motor Insurers in Romania (BAAR) to analyze and find solutions concerning the status of high-risk insureds was also emphasized. From this perspective, the analysis primarily aims to identify proposals for goods carriers to access a balanced premium rate in compulsory motor third-party liability insurance, so that the recommended rate values are closer to the reference rate.

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The discussions will continue in the following days to consolidate a package of measures that can be immediately applied to address the issues raised by the representatives of the carriers, ASF notes.

Before the ASF’s statement release, Vasile Ștefănescu, president of the Confederation of Authorized Operators and Transporters in Romania (COTAR), stated that the transport unions and ASF leadership agreed that RCA policies for vehicles over 16 tons should be priced at the reference rate, as reported by Radio Romania. If implemented, this would lead to a decrease in RCA prices.

It is unclear at this moment how this solution will be imposed on insurance companies.

Vasile Ștefănescu declared that discussions would continue in the following days for all categories of transport so that increases in RCA prices can be halted.

ASF leadership and representatives of the carriers agreed, in last night’s discussions, that RCA policies for vehicles over 16 tons should be concluded at the reference rate.

He also mentioned that the involved ministries will meet urgently to issue regulations regarding the suspension of policies for periods when the vehicle is parked for an extended time for various reasons.