Amendments to Regulations on compulsory insurance of civil liability of vehicle owners approved

Amendments to Regulations on compulsory insurance of civil liability of vehicle owners approved Amendments to Regulations on compulsory insurance of civil liability of vehicle owners approved https://innews.media/en/news/id-60731

The Central Bank of the Republic of Azerbaijan is continuing to implement improvements to compulsory motor vehicle liability insurance. In this context, the Central Bank's Management Board has approved changes to modernize the existing Bonus-Malus system, which is based on policyholders' insurance history, in line with successful international practice.

The Bonus-Malus system assesses drivers' risk levels based on their insurance history and applies discounts or surcharges to insurance premiums according to the assessment.

According to the approved changes, the existing Bonus-Malus system will be replaced by an Insurance History Coefficient based on an individual's insurance history. Unlike the previous system, which used Bonus-Malus classes and transitions among these classes during accidents or non-accident cases, a simpler, more understandable approach will be applied. Similar to the previous system, a 5% discount will be applied to insurance premiums if there has been no accident under this type of insurance. In the event of damage to a third party's health or property, a 30% surcharge will be applied to the premiums of those at fault for each incident.

Additionally, if more than one person is entitled to drive the vehicle according to the legislation at the time the insurance contract is concluded, the Insurance History Coefficient of the person posing the greatest risk among them will be applied. This approach aims to encourage a more disciplined attitude towards individuals who are most likely to cause damage to third parties.

According to the new amendments, in the event of an accident, the application of surcharges to the insurance premium will not apply to the party that concluded the insurance contract, but rather to the person who was driving the vehicle that caused damage to third parties.

The Insurance History Coefficient will not be applied to legal entities. However, a surcharge will be applied to insurance premiums of individuals who cause damage to third parties while driving a legal entity's vehicle. The Insurance History Coefficient will continue to be applied to individuals engaged in taxi activities unchanged.

The main goal of the proposed changes is to introduce a new, fair, risk-based model that considers the likelihood of harming third parties' health or property while driving a vehicle.

The approved changes will come into effect two months after publication.