Citizens fall in: Forced to pay up to hundreds of euros more for ridiculous reasons

According to the announcement made by the CEC, the decision concerned the extent of inflation in particular and the country's overall economic growth over 2012-2018, which damaged insurance companies.

In addition, Kosovo Police announced that about 300 thousand cars in Kosovo had remained unregistered and that this too was at the expense of this sector.

So the basic goal of the CEC was to strengthen the insurance companies' sector by providing very funny explanations even though the consequences on citizens will be too heavy, writes Periscope.

In fact, 300 thousand unregistered cars are not a mystery. Considering poverty and unemployment figures, it can be said that citizens do not provide their vehicles because they cannot afford it financially.

And yet, BQC instead of lowering the current price, decided to raise it alarmingly by 35.56 percent. Depending on the car's cube, a citizen may have to pay up to hundreds of extra euros to secure his car.

Among the Problems You Name The BQC, which led to this decision, was also the increase in the number of accidents insurance companies had to pay for in question. So the question is, why do citizens pay for security? The answer is quite simple: Since accidents, they are covered by such companies.

See a scandalous part of the CEC's reasoning that offers no figure trying to explain why citizens should pay more:

“The CEC estimates that security companies should be able to adjust the Kategoria I tariffs for the extent of inflation occurred during 2002-2018 so that these insurance rates better reflect the current economic conditions. ”

Below, unread you can still find the full BQC reaction.

Kosovo Central Bank's full announcement

The Central Bank of the Republic of Kosovo under legislation in effect is an independent and responsible institution for the licensing, supervision and regulation of financial institutions in the Republic of Kosovo.

One of its main objectives is to promote and maintain a stable financial system, which provides the necessary security for all users of financial services.

In this context, one of the main areas of the CEC's responsibility concerns the insurance sector, where the CEC is consistently engaged in protecting the interests of police officers, ensuring the conditions necessary for those affected to be dealt with in accordance with conditions defined with the security contract.

To that end, the Central Bank of the Republic of Kosovo, acting in accordance with the legislation in force and also based on the Financial Sector Stability Review Report 2019 conducted by the International Monetary Fund, has begun the process of revising and vainging risk for mandatory responsibility insurance from auto.

The current awards for mandatory auto-responsibilities against the third party have remained unchanged since 2001.

In this long period since they have been defined, numerous developments have taken place in the market where insurance companies operate, which in various ways have influenced insurance companies as well as police holders and have made it necessary to initiate reviewing these prices so that they can reflect market conditions more fairly.

Within the main factors that have affected market conditions during this period are included:

Increasing the number of damages and increasing the value of damages, especially category I vehicles;

Increased the minimum amount of insurance for the contracting of autoresponsibilities with law entry No.04/ L-18 for mandatory auto-responsibilities insurance in 2011;

The effect of applying the Bonus-Malus system in effect since 2013 and which is estimated to be the source's revenue drop train to effect BonusMallus.

According to the calculations made, it is designed that by the end of 2019 these revenues be lowered for about 19 percent and that 93-94 percent of police officers do not cause accidents, so they also receive the bonus that causes even lower insurance revenue;

And especially the rate of inflation, which has directly impacted the increase and coverage of the cost of damages, as well as the price of repair to material damages, but also as pay in case of lost profit compensation or lost weight on non-material damages, as a result of average wage increases.

As a result of higher developments, an official study has been undertaken, which has suggested increasing the rates of Categoria I (a passenger vehicle) for 36.56%. However, the CEC in its assessment has identified several factors that are not fully reflected in the actual report, so it has also rejected the demand of insurance companies for tariff change based on that report.

Anyway, The CEC estimates that security companies should be able to adjust the Kategoria I tariffs for the extent of inflation occurred during 2002-2018 so that these insurance rates better reflect the current economic conditions.

Adjusting tariffs for inflation conditions has a direct impact on strengthening the sustainability of this sector, thus increasing the capacity of insurance companies for fair and time compensation to police officers.

Therefore, in order to better reflect the developments in the country's economy and thus create conditions for increasing the sustainability of the insurance sector, as well as meeting the International Monetary Fund's recommendation for their revision, the Executive Board of the Central Bank of the Republic of Kosovo, at the meeting held on October 31st 2019, based on Article 36 paragraphs 1, under paragraph 1.1.17 of Law No.03.09 for the Central Bank of Kosovo, in accordance with Article 8th paragraph 5th of the Law. 04/L-018 for mandatory auto responsibility insurance, as well as Article 5 paragraph 2, Article 7, and Article 7 of the Order for determining the pedition structure for auto responsibility, has made a decision to change mandatory insurance fees from auto-responsibilities to the category of passenger means (Tarifor Group I).

Under this decision, the CEC has asked insurers to adjust the current insurance tariffs imposed by the auto-responsibilities for the Tatar Group I, which have been in force since July 1, 2001, to the official inflation rate published by the Kosovo Statistics Agency of the 01.01.2002 to 31.12.2018. Adjusting the fee of relevant inflation cuts should be done by lowering the circulation tax rate of 5 per cent, which has been in force until July 25, 2019 with the entry into force of Law No. 06/L -105 for corporate income tax, where providers are subject to tax in profit.

The CEC will intensify its commitment in order for the insurance sector to be fully implemented of legislation and regulation in force.

In this direction, in the next period, the CEC will pay particular attention to implementing legal and regulatory requirements. Failure to comply with such requirements from insurers will be forwarded to administrative measures, not excluding the revocation of licenses for companies that fail to implement legislation in question.