Vehicle Insurance About to Get Fairer
EghtesadOnline: A number of provisions in a revised law pertaining to motor insurance will ensure that premiums will be set fairly by considering criteria such as driving records, announced the head of the Central Insurance of Iran.
“One of the most serious shortages in the insurance industry was the fact that the auto insurance law was very old,” Abdolnasser Hemmati was quoted as saying by IBENA.
“This category of insurance, which had accounted for a large volume of the insurance industry’s portfolio, faced many problems, but was fortunately amended and the new Vehicle Insurance Law was approved.”
The amendments in question were passed by the parliament in March and were subsequently notified by President Hassan Rouhani in June, according to Financial Tribune.
Personal auto policies remain the insurers’ main source of revenue, accounting for 38% of their portfolio.
According to Hemmati, directives pertaining to three articles (18, 30 and 3) of the law have been devised by CII and passed to the Cabinet for final approval after the High Council of Insurance gave the green light.
Noting that these directives are under the review of related commissions, he added that the first draft of a number of other directives is also being processed.
Article 18, he said, ensures that “driving record and also social considerations such as how commonly the vehicle is used will act as the basis for the structure of premiums so that they would be fairer”.
As to other benefits of the new motor insurance law, the official says it will prevent individuals from being imprisoned as a result of a debt related to car accidents.
The CII chief noted that with the implementation of this law, those who are injured as a result of a car accident will be able to claim their rights in the shortest amount of time possible.
“If an accident is not deliberate and the party at fault has not violated any other laws and regulations, they would be considered guilt-free and all their insurance commitments will be borne by insurance companies,” he said.
Under the new law, he stressed, none of the parties involved in a car accident will go to jail.
Hemmati said many legal ambiguities and loopholes concerning the rights and commitments of the insurer and the insured have been cleared, conditions of paying claims have been eased and “obligations of related entities and organizations” have been defined.