Drivers and victims of road accidents may be protected from consequences of insurance company bankruptcy after the National Bank of Moldova drafted a law establishing the Insurance Guarantee Fund, bani.md reports.

According to the draft, the fund will pay compensation to road accident victims in the event of a bankruptcy or liquidation of the responsible insurer.

To finance the system, all companies issuing RCA (compulsory motor third-party liability insurance) policies will be required to make contributions to the fund. The draft stipulates that these contributions may reach 10% of the gross insurance premiums collected under RCA policies. Furthermore, after the fund's launch, insurers will make a one-time contribution of 1% of the RCA insurance premiums collected in the previous year.

Another important thing is that, if the fund’s resources aren’t sufficient, the fund will be able to attract loans, including from the National Bank of Moldova, commercial banks, or international organizations.

This initiative is part of the process of harmonizing Moldovan legislation with European Union standards and implements the provisions of the European Directive on compulsory motor third-party liability insurance. According to the document, the law is scheduled to enter into force on September 30, 2029, the source writes.