Each insurer that offers mandatory motor insurance, along with the sale of the first liability insurance, becomes a member of the Insurance Guarantee Fund.
Currently, out of 30 member companies, 21 are domestic insurers, while the other 9 are foreign insurance companies (3 operating through local branches and 6 cross-border).
The market regulations require such companies to participate in financing the compensations for the victims of the accidents caused by uninsured and unknown perpetrators. UFG deals with the payment of these individuals. The members currently pay for this purpose 1.3% of premiums collected from mandatory liability insurance policies (motor and agricultural).
In 2018, uninsured and unknown road accident perpetrators determined UFG to pay nearly PLN 100 million as total compensations costs (while compensations paid together with the change in provisions exceeded PLN 150 million).
UFG operates in three main areas of the Polish insurance market:
- payments of compensations under civil liability and motor insurance policies for uninsured and unknown accident perpetrators, as well as for the insurance policies issued by insurance companies that went bankrupt;
- information center, administering a nationwide motor insurance database; the database is the basic source of information for insurance companies for charging premiums for third party liability and AC policies;
- preventive activities (i.e. detecting uninsured vehicle owners based on the data from the Information Center).