Since 1 June the motor third-party liability insurance (MTPLI) will come into effect in Pridnestrovie. So will the framework agreement between Pridnestrovie's and Moldova's insurance companies. Novosti Pridnestrovya has been reporting that Pridnestrovie and Moldova have agreed on the mutual recognition of MTPLI policies. However, the process of reaching the agreement was not at all smooth — when Tiraspol and Kishinev representatives were signing the agreement, Moldovan insurance companies did not join it, and only later several insurers from Moldova put their signatures on it.
Pridnestrovie's Ministry of Foreign Affairs noted that «the approval of the document had not been as smooth as desired at the project launch.»
By now one insurance company from Pridnestrovie, ZAO «SB-Universal Insurance Systems», has joined the framework mechanism. Moldova is represented by six insurers: Moldcargo, Acord Grup, Asterra Group, Transelit, Klassika Asigurari and Galas, although most of them do not cover much of Moldova's insurance market. A question mark still hangs over the involvement of Moldova's biggest companies, which own more than a half of its market.
«The framework mechanism, first of all, aims at protecting a car owner's interests, who will now decide whose policy it is more convenient to have for driving both in Moldova and in Pridnestrovie. Now car owners have the choice, and I suppose insurance companies must ask themselves what to do to attract potential clients visiting or just travelling across Pridnestrovie. Let the market regulate relations in this area from now on," said Pridnestrovie's Minister of Foreign Affairs Nina Shtanski in an interview to Novosti Pridnestrovya.
A few words on the market approach: according to Pridnestrovie's KGB, on the average, over 7,000 cars registered in Moldova arrive in Pridnestrovie every day (as of April 2015), 90% of them are motor cars which are subject to MTPLI.
Pridnestrovie's foreign minister believes the introduction of MTPLI in Pridnestrovie is «a consistent and expected step» based on the common practice which Pridnestrovie has fallen behind so far. She also emphasises that the mutual recognition of insurance policies is advantageous for both Moldova and Pridnestrovie.
«Car owners from both Pridnestrovie and Moldova will purchase a policy at the place of car registration, and their policies will be legitimate in Pridnestorvie for Moldovan car drivers and in Moldova for those from Pridnestrovie," said Nina Shtanski.
At the same time, the mutual recognition of insurance policies will rule out the necessity for Pridnestrovian and Moldovan car owners to purchase two policies. The MTPLI has been introduced in Pridnestrovie by stages since 1 March 2015, whereas in Moldova the motor insurance was introduced unilaterally and since then has been in effect for years. Yet another issue, formerly urgent, will be solved, that is, guaranteeing of insurance payments by Moldovan insurers to Pridnestrovie's car owners.
«In most cases Pridnestrovian car drivers could not protect their rights under Molovan insurance policies because in the event of an insured accident Moldova's insurance companies used to refuse the corresponding payments to the Pridnestrovians. This practice was broadly supported by Moldova's judicial authorities, which referred to the non-legitimacy of Pridnestrovian documents," noted Pridnestrovie's foreign minister.
It should be recalled that the framework mechanism will be in effect until 8 May 2016 and may be prolonged in case the experience is successful and efficient. However, the MFA believes it is too early to discuss the possibility of indefinite duration of the document at this stage.
«The framework mechanism provides for the possibility of its prolongation, as well as discussing at the negotiating table all the debatable issues which may arise in the course of its implementation," concluded Nina Shtanski.
Many-sided responsibility
In compliance with the framework mechanism, in the event of a road accident and, consequently, an insured accident, insurance payments to the victim of this accident will be made by the insurance company which represent the person responsible for the road accident within the responsibility established in the legal framework of the jurisdiction where the company is registered.
For instance, in case of a road accident, which has occurred in Moldova and involves cars registered in Moldova and Pridnestrovie, where the victim is a car owner from Pridnestrovie, insurance payments to the victim will be made by a Moldovan company, which has concluded an MTPLI agreement with the person responsible for the accident, within the insurance payment limits stipulated by Moldova's legislation. If a car owner from Moldova is the victim of this very accident, insurance payments will be made by a Pridnestrovian insurance company, which has concluded an MTPLI agreement with the person responsible for the accident, within the insurance limits stipulated by Pridnestrovie's law. The same applies to the determination of an assured accident and insurance payments in Pridnestrovie.
MTPLI: legal context
The motor third-party liability insurance is introduced in Pridnestrovie by the president's decree, whereas its specifics, including establishment of a premium rate and its correction coefficients, insurance payment limits, are determined by the governmental regulation.
Meanwhile, the executing agency has submitted to the Supreme Council the draft law «On mandatory third party liability vehicle insurance», which in the event of its adoption will be the framework legal act stipulating the rules for MTPLI functioning in Pridnestrovie. Initially, the bill received a negative opinion from the dedicated parliamentary committee, however, in the course of a scheduled plenary session of the Supreme Council Efim Koval, head of the committee on agriculture, transport, construction, natural resources and ecology, said that MPs would discuss the draft law with its authors again and submit it for consideration at the nearest session.
