Monday, February 7 2022 20:11

ArmInfo. Since today, compulsory motor vehicle  insurance policies (CMTPL) in Armenia have risen in price by 3.000  drams ($6.5).

According to an official report, the decision of the  Board of Armenian Motor Insurers' Bureau (approved by the Board of  the Central Bank of the Republic of Armenia) dated December 23 last  year, aimed at increasing insurance fees through CMTPL, has come into  force dictated by an unprecedented increase in insurance compensation  last year and thereby a significant increase in the loss ratio this  mandatory class of liability insurance.

According to the Bureau, the CMPTL tariff scale has not changed for  10 years already, since its introduction in the country. Despite  significant measures for digitalization of services, their automation  and their partial transition to the so-called "Europrotocol" method,  nevertheless, the level of unprofitability of the CMPTL market could  not be reduced. On the contrary, from its 75% top-level, set-up in  the original market "design" of this compulsory insurance service,  the loss ratio has risen to 85%, and this is without taking into  account the commissions of insurance agents.

According to the source, "actuarial calculations show that in order  to ensure the stability of the system, the basic insurance premium  should increase by at least 3.000 drams a year, risk coefficients  should be adjusted, and 'bonus-malus" payments should be balanced."

It should be noted that today a protest action was organized in front  of the office of the Bureau by public organizations representing the  interests of motor transport drivers. They noted that this decision,  which increases the cost of services, was taken behind closed doors  without agreement with interested parties, consumers of services,  without specialized professional discussion. The campaign organizers  and independent experts believe that insurance companies providing   CMPTLservices deliberately increase the level of unprofitability of  this class of insurance in their reports. So, for example, the  institute of damage appraisers works exclusively in the interests of  insurers, openly violating the standards and referring to a certain  "depreciation" principle, they estimate the damage for old cars (over  70% of the total number of cars operated in Armenia, ed. note) at 3-4  times cheaper. The uncontrolled institution of damage assessors also  hides the main corruption risks of the system.  Independent experts  of the insurance market are convinced that the constant  administrative intervention in the market, its constant regulation  and restrictions have significantly confused the situation and  actually neutralized its natural motivational principles, due to  which the logic of the insurance mechanisms ceased to function,  creating constant inconsistencies and imbalances for its players and  clients