Central Bank's three million favorite for insurance companies

The board of the Kosovo Central Bank (BQK) has favoured insurance companies at the expense of police officers, in the event of a change of regulation for compensation of damages for the Third Pals. ORAinfo has secured evidence of how companies “saved” from the 3 million reserve criterion in this fund.

Due to poor financial situation, in August last year insurance companies addressed Kosovo Central Bank (BQK) at a request. They required some changes in the Order to compensate for the damage to the Third Poles. All of this in order to free themselves of the responsibility to reserve at this fund millions of euros. This request was not taken into account at the time that Bedri Hamza was governor.

In December of last year, the Kosovo Central Bank Board postponed the same, making changes to the regulation for the Kosovo Insurance Bureau's Compensation Fund. In this case, changes are at the expense of police officers, in this case citizens, as long as insurance companies were favoured.

ORAinfo has provided evidence of how companies, through changes made to this regulation, have saved the 3m-euro reserve criteria for funding this fund.

In the meantime, until the change of regulations, they were charged with the payment of money so that the compensation of the parties would be made within legal terms.

With the new changes, insurance companies are not obliged to reserve at the fund, for the damage happening but not reported to the Kosovar Insurance Bureau. The reserve is envisioned by regulations because legal deadlines exist until the parties damaged in accidents should be compensated. With the removal of this reserve -- which was earmarked to be the minimum 3m euros -- opens up the possibility that there will be delays in the realisation of rights from damaged parties.

The Compensation Fund, which is part of the Kosovo Insurance Bureau, is financed by insurance companies for those accidents in which the third parties are involved. Third parties are considered all persons who were caused damage or injury from the accident.

Safe sources in the insurance industry have told the paper that these changes have occurred after the poor financial situation through which insurance companies are going through. Last year they end the year with losses, while only this year have they started to burn.

Removing the 3 million criterion from the regulation

Through the insurance companies, until the adoption of the new regulation, a draft of this regulation was circulated, in which it was envisioned that insurance companies for funding this fund should allocate minimum 3m euros.

ORAinfo has provided the draft new regulation, which is now called “Rule for Financing and Calculation Fund”.

Article 4 of the draft regulation has provisions where companies are obliged to leave the 3m-euro reserve on this fund.

The minimum sign of the Compensation Fund cannot be less than 3,000m euros for the military/permeal quarter, or half of the total amount calculated under Article 5 paragraphs 1 and 2 of that regulation, which is higher than”, is said in the draft of this regulation.
However, this article has not been integrated into the final version of the regulation, which was adopted in December last year, at the last meeting of the ECC Board in 2017. It is only said that “ssurers (companys) members of the Bureau are obliged to finance the Compensation Fund on a three-month basis, within 15 days of the Bureau's announcement day”, it is said in the final version of the regulation, in which it does not figure the provision of the draft regulation, which was designed to always be reserves every minimum three million euros.

Tens of citizens' complaints to insurance companies

At the Kosovo Central Bank, they have acknowledged that initially the draft regulation under the 3m-euro criterion had circulated in the sector, but have not clarified why the same was not included in the final version.

According to Central Bank of Kosovo data (BQK) during 2017 alone, this institution has accepted a total of 10 complaints from users of financial services against the Kosovar Insurance Bureau.
The Amanda-based regulator does not prevent the Kosovo Security Bureau from paying the damaged parties in time, rather stimulates and encourages the Kosovo Security Bureau to pay the reduced damages. For your information, the CEC during 2017 received a total of 10 complaints from financial services users against the Kosovo Security Bureau, of which three complaints were about failing to compensate for the damage”, BQK Information Official Besnik Qada has said.

The requirement for changing this regulation by insurance companies was made in July 2017, respectively.

According to Cadaj, after accepting the request, The CEC has analysed the demand and after consultations with the requirements of legislation in force, compared with countries in the region, the reasoning prepared by the international audit company on this issue, and after consultations with the insurance industry, the BQC has commissioned the Financial Rule and Accounting Fund for the Compensation of the Kosovo Insurance Bureau.

“According to the legal framework in force, the Law on Insurance, one of the main responsibilities of the CEC, respectively, is to ensure the protection of the interests of police officers and those damaged. Based on this, regulations issued and approved by the CEC are aimed at preserving and protecting the interest of police officers. The CEC in no way sets out and defines standards that would in any form harm the interest and protection of police officers, and with that, even in the case of changing this regulation”, he has said. /ORAinfo/