Kosovo insurance companies block Green Carton, millions of euros in unpaid damage

Insurance companies in Kosovo are not nearly ready to respond to demands coming from Kosovo's eventual accession to the Green Carton. They have a host of problems with the domestic market, but what is expected to be the biggest obstacle is the way the damage caused by accidents is addressed. Currently, there are 92 thousand pending damage in companies and courts, meanwhile, as well as poor treatment of foreign damages.

In the form for Kosovo's accession to the Green Carton, the Kosovo side must answer an essential question for accession to this mechanism: how are insurance companies treated in the internal market? Depending on the answer to this question, whether or not Kosovo's accession to the International Security Charter System could happen.

ORAinfo, in her research, has found that security companies in Kosovo are not nearly ready to respond to demands coming from Kosovo's eventual accession to international insurance mechanisms.

They have a host of problems with the domestic market, but what is expected to be the biggest obstacle is the way the damage caused by accidents is addressed.

Official statistics speak of the industry's plight in dealing with the damage done by citizens in the accident. Currently there are 92 thousand pending damage in courts, meanwhile, as well as poor treatment of foreign damage.

This has been confirmed for ORAinfo by the Central Bank of Kosovo (BQK), which, under law, has been monitored by the Kosovo insurance market.

“The number of pending insurance damages is approximately 92 thousand damage, including the number of motor insurance damages (auto responsibility, Kasko) and other voluntary insurance (owners, accident, health, other responsibilities)”, has said of ORAinfo, Kufrim Ahmeti, BQ spokesman.

Meanwhile, according to insurance connoisseur Besnik Nikci, this criterion is defining, since following the eventual accession, insurance companies, except for demands on the treatment of damages that will come from the internal market, must also respond to foreign demands.

Another problem is insurance sums for persons and vehicles, which are quite high among the member states of the European Union.

They amount to up to fivem euros, while in Kosovo, with the Law on Insurance, the amount of personal damage insurance totals up to 1m euros.

Companies keep their reserves for themselves

Official statistics speak about the situation on the insurance market. Despite the fact that there are over 92 thousand damage to the remaining citizens, the technical reserves of insurance companies for these damages amount to 74m euros.

Companies over the years have shown “used to frame” when dealing with damage. Most cases end up in courts and there are very few agreements reached between companies and police officers.

“The technical damage reserves are in the total of 74m euros, including motor insurance reserves and other voluntary insurance accounts”, has clarified Ahmeti, adding that there is a large number of citizens' complaints to companies addressing this institution for assistance.

A total of 267 citizens' (copiers) complaints have been considered in the BQC Ankes Division for 2017, while 192 complaints were considered for the year 2018.

And all the accepted complaints are of police officers, except they are divided into categories like Health Police, TPL Police, Security Police, etc.”, has clarified Ahmeti.

However Ahmeti has not indicated whether there were fines against companies after all these citizens' complaints. In that case, he has provided sweeping answers.

The Central Bank of the Republic of Kosovo through continued supervision of insurers, such as through monitoring financial mirrors and regular reporting of insurers in the CEC, and examinations in the country assess the provider's activity, including punitive measures against insurers, which are incompatible with legal framework requirements”.

Solutions to Conflicts Only in Courts

With this poor performance of insurance companies in the internal market, insurance connoisseurs say the Kosovo Parliamentary deputies' initiative, for admission to the Green Carton through a third state, leaves much to be desired.

They invite care to approach this initiative seriously, for they think the main problem is internal, respectively.

Faithful Nikci, insurance connoisseur and head of the office specialising for treatment of foreign damage “The ICS Assistance” says there are many problems in dealing with foreign requirements from insurance companies, but even courts, still not accepted in the Green Carton.

The ICS Assistance represents European Union market providers, not only on the territory of Kosovo, but in all states of Southeast Europe.

“There is an obvious distinction of dealing with these requirements from insurers in Kosovo, in relation to other countries. This difference consists of that since the demands of the reregress/subrogisation mainly in other states are handled in regular procedure, the number of contests does not reach 1%, we have a completely different situation in Kosovo. These demands with foreign elements are largely resolved in the Court, with an extremely small number of them being selected in regular procedure what is due to the ongoing expenses of the”, Nikci says.

According to him, such a situation in dealing with these requirements provides an image and presents reluctance to the European Union's State Insurance Bureaus in supporting Kosovo in membership in the International Security Charter System.
It's the fact that, not only the demands of foreign providers, but also the industry's mutual demands that Insurance is resolved in conflict rather than in regular procedure, for example. Through arbitrage, shared by direct demands of damaged parties”, Nikci says.

Circumcision for up to 10 years

Nikci has told of ORAinfo that, in the Council of Bureaus questionnaire, notes regarding efficiency in dealing with damage and separately in cases of conflict are required. At the same time, information for court efficiency is required in handling insurance issue requirements.

But in this case the market situation leaves much to be desired.

While the reggressive demands are addressed within a period of 2-3 years, the much worse situation has been related to direct demands of parties incidented when psh. The demands are addressed between 5 and 10 years. Factual situation this, not convenient for the performance of the Insurance Industry as a candidate for membership in this system”, Nikci estimates.

He says that the Council of Bureaus in Brussels will especially appreciate performance regarding the implementation of the MoU in power (Albania, Macedonia and Serbia), which according to him is not to be praised.

“There is an awareness that handling these cases requires a special regime and expertise, and in the time of the end there is progress. However, this is not enough because Kosovo's membership in the CoB or removing border security and acknowledging the validity that the international security card for Kosovo territory is not based on addressing requirements from the Kosovar Insurance Bureau (BKS), but, what is the rule, that these damages be dealt with by corruption (conspondents or specialised bureaus) the institute, which has been denied for life until this year from BKS, against its installation by 2011<2).

What should the institutions do?

Based on this, Nikci has been looking to the latest initiative of several deputies for admission to Green Carton through a third state, in this case Austria.

I consider the last possible <x0).. ..which as such corresponds to the 2000-2001 COB decisions. A successful solution should be expected, but now I fear the reluctance of foreign National Bureaus given the continuing failures of the Kosovo side in proceeding with this issue, where there has been a lack of continuity, consistency in demand, and not rarely the lack of expertise”, he said.

He has suggested that this time contact with the Austrian Bureau carefully introduce the requirements, always in accordance with the mentioned decisions of the CB, though not even “step-by-step” of the definitions of these decisions. In this event, Nikci adds that the main role should be BKS (Kosovo Security Company), as the only public authorization authority on this issue, authorisations of these installed with Law 04/ L-011 and in line with “CoB Internal Regulation”.

“The BQK (Kosovo Central Bank) has played the Bureau, and it has been very successful by 2004, but from now on it should not be presented as host to this project/initiative. This is also true of the respective Government ministries that the Republic of Kosovo and other state institutions, which more need to be guided in political support abroad. Procedure of the issue in an institutional way, as is given by information tools, not only is it not preferred, but it is likely to present cause for any failure in the lack of knowledge about the course of the process from the beginning and adequate expertise in this specific article”.