Croatian motor insurers are preparing to face a new Law on compulsory MTPL. Currently the draft Law is going to the process of public debate, which should be completed by June 3rd. After that the amended Law will be submitted to the Government, and then to Parliament and is expected to take effect already in the fall.

According to osiguranje.hr, the Croatian Association of the Auto Industry (HUAS) announces that there will be 'tectonic changes' which will 'overthrow of insurance company monopolies'. HUAS emphasized that the new Law's provisions provide for insurers' clients to have the right to get a damage assessment not only from their insurer, but also from independent entities, licensed service technicians. The Association argues that the number of settlements on claims is too large, which leads to a large number of improper repairs and an overall decreasing safety of the vehicle. "The essence of the new law is that both the insurers and the insured have the same rights and obligations that exist in the EU, that the number of settlements is significantly reduced, that VAT avoidance is impossible, that the gray area is prevented and that the existence of a large number of technically defective cars is also prevented', claims HUAS.

The insurers, however, do not agree with this opinion. According to the Croatian Insurance Bureau (HUO), the changes to the Law on Basic Auto Insurance relate primarily to the necessity of implementing changes to the Directive on Motor Vehicle Insurance, related to the protection of injured parties in the event of cross-border insolvency, certificates of adverse events, new vehicle definitions and the like. "It is important to say that the MTPL insurance compensation system works very well. Namely, annually we enter into more than three million contracts on automobile liability insurance and comprehensive insurance, and every year more than 100,000 compensation claims are settled and over 200 million euros are paid out in the MTPL segment alone, with a negligible number of court proceedings," HUO director Hrvoje Paukovi?c stated. He also emphasized that the system of out-of-court dispute resolution through the insurance attorney's office and the Center for Conciliation at HUO enables free resolution of possible disputes and objections, so that the numbers of petitions against insurers is rather low.

"We are working on this law with other stakeholders, and we expect the proponent of the law, the Ministry of Finance and our regulator Hanfa to take these facts into account when drafting the final proposals for the law, as well as by-laws. We also expect that certain proposals for changes sent by certain interest groups related to motor vehicles will be recognized as proposals for the promotion of their particular interests, and not as proposals aimed at consumer protection," Paukovi?c stated for osiguranje.hr.