BiH: Intermediation commissions for MTPL officially raised in Republika Srpska

29 September 2021 — Daniela GHETU
Insurance Agency of Republika Srpska, one of the two administrative entities of Bosnia & Herzegovina, has increased commissions for MTPL insurance agents from 15 to 27% in an attempt to prevent companies from illegally increasing those commissions themselves, local financial press reported.

The amendments to the Ordinance on the mutual relations between insurance agents and insurance companies and the limitation of the commission of agents adopted by the Management Board of the Agency, providing for this change in the commissions limits is coming into effect this week.

The measure aims at providing a more adequate regulatory environment that would enable a higher transparency by bringing in the open the real level of commissions that were paid anyway under disguised forms, as representatives of the RS Insurance Agency stated for the press.

While the change will most probably bring under a legal framework the acquisitions costs of the insurance companies, it will still leave unsolved the issue of the illegal discounts granted by some agents to attract their clients.

Insurance companies also welcome the Agency's decision, noting that this is a good start to settling the situation in the auto liability insurance market, but more steps need to be taken to eradicate "money laundering" and the inflow of cash from other activities to provide illegal discounts, the local press wrote.

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