ARMENIAN PARLIAMENT PASSES BILL ON MANDATORY VEHICLE INSURANCE

/ARKA/
May 18, 2010
YEREVAN

YEREVAN, May 18, /ARKA/. An Armenian Central Bank-designed bill on
mandatory insurance of motor vehicles was approved today by parliament
in the third and final reading. A deputy governor of the Central
Bank, Vache Gabrielian, said the proposed bill provides protection
against losses incurred as a result of traffic accidents and against
liability that could be incurred in an accident. He cited also the
increasing number of vehicles and road accidents, saying these two
factors make auto insurance mandatory. The bill is expected to come
into force in 2011.

The bill envisages creation of appropriate infrastructure to deal
with car insurance, including the bureau of insurance companies and
establishment of a fund to pay compensations to persons suffering in
car accidents if the motorist responsible for the accident is not
insured, if the guilty is not found or identified and if the car
involved in the accident is stolen or used for a criminal purpose.

‘The bill pursues a very important goal -to protect citizens suffering
in car accidents, to help develop the system of mandatory insurance
of cars and promote this culture. Vache Gabrileian said.

According to the bill , in 2013 the so-called bonus-malus system will
be introduced, which is a system that adjusts the premium paid by a
customer according to his individual claim history. Bonus usually
is a discount in the premium which is given on the renewal of the
policy if no claim is made in the previous year. Malus is an increase
in the premium if there is a claim in the previous year. Bonus-malus
systems are very common in vehicle insurance.

Vache Gabrielian said the insurance payment amount in Armenia will be
between 31,000 to 38,000 Drams a year. According to government data,
there are 400,000 motor vehicles in Armenia. ($1 – 384.81 Drams).