Deregulation reaches RCA prices

Sales of auto liability policies will be liberalised starting with the end of this year, both from the point of view of prices, and from that of the insurance year, in the wake of negotiations for Romania’s integration in the European Union regarding the Free Movement of Services.

This chapter would be concluded within several months, after the Parliament adopted the last legislative modifications pertaining to insurance, said Vasile Puscas, Romania’s chief-negotiator for the European Union.

Thus, starting this year, insurance companies will be free to set their own auto liability policy prices, within the limit of plus or minus 10%. Until now, the price of these policies has been decided by the Insurance Surveillance Commission (CSA).

This will be the first stage of the auto liability insurance segment liberalisation, with the market to be completely deregulated in terms of prices by 2007. “Margins will be raised each year, until they get to be set only by insurance companies,” said Gheorghe Cismaru, deputy chairman of the Insurance Surveillance Commission.

At the same time, auto liability polices will no longer be sold within winter and summer campaigns as they have been so far, because they will be concluded for the insurance year, and not for the calendar year. For instance, a policy bought on February 1st, 2005, will be valid until February 1st, 2006, and not only until the end of the calendar year. These modifications of the auto liability insurance market will be endorsed through regulations that are currently drafted, being discussed by CSA and market operators.
sorin.pislaru@zf.ro