From July 1 this year, a new procedure for premium calculation in MTPL entered into force in Moldova and an estimated premium was introduced as part of tariff liberalization for the segment, reports Capital.market (the informational pamphlet of the National Financial Market Commission (CNPF).

Insurers will calculate MTPL tariffs based on their own statistics and CNPF will set and approve an estimated premium based on the market total statistics at least once a year. As the Head of the General Insurance Department of CNPF Tatiana CIOBANU explained, the estimated premium will be calculated based on the market statistical data for the past 5 years (2013-2018).

From July 1, 2019, the base MTPL premium will increase by about 8%, while the Green Card premium will be up by 3%.

An uncontrolled level of MTPL damages may lead to large losses since MTPL's share in the market portfolio is quite big, according to CIOBANU. For 1Q2019 the average amount of MTPL paid claim increased by 13% y-o-y, and the total market MTPL claims grew by 15.57% y-o-y. CIOBANU believes "in this case it is very important that insurers meet new requirements for solvency, technical reserves, diversification of assets, etc....".

Currently, 14 insurance companies operate on the Moldovan insurance market, 9 of which are licensed for insurance under the Green Card system, as Capital.market reports.