Bosnia: Gradual liberalization of the MTPL market in FBiH approved by the House of Representatives

19 April 2018 — Daniela GHETU
The House of Representatives of the Parliament of FBiH, one of the two administrative entities that form Bosnia & Herzegovina has approved this week the new law on compulsory MTPL, taking thus a big step towards the a free MTPL market.

The new law provides for a two-phase liberalization of the MTPL market: a six years period of transition during which prices will be free determined against an officially established market benchmark, followed by the total liberalization, reported

A similar Law was already adopted in 2015 by Republika Srpska, meaning that the Parliament's decision will also provide for the harmonization of the rules within the single insurance market of Bosnia & Herzegovina.

The new Law should also put an end to some current market practices driven by the competitive environment, as the unauthorized discounts offered in different forms to potential customers (payment of technical inspection to insured persons, issuing fuel bills, cash withdrawals via cashier on various grounds etc.) in order to get extra market share. Such practices are increase the insurers' operating costs, weakening their financial position and ability to pay claims.

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