Romanian insurers warn that capping MTLP fees would breach TFEU

Capping the motor third-party liability (MTPL) fees, provisioned by a bill recently drafted and filed by several MPs, risks prompting infringement procedures against Romania, warned the Union of Insurers (UNSAR).

The insurers also denied claims mentioned by the bill's authors, who estimate that the insurers register a profit margin of 50% for the current prices they charge. In fact, insurers operate at a negative 9% profit rate in the MTLP segment, they claim.

"UNSAR took note with concern and surprise of the legislative proposal submitted to the Senate on November 15, which provides for the amendment of Law 132/2017 on MTPL, in the sense of capping MTPL prices at reference rates of ASF - Financial Supervision Authority (ASF). The draft […] is not in line with the Treaty on the Functioning of the European Union and the relevant European insurance legislation in the field of MTPL legislation, and risks attracting a new infringement procedure against Romania," the UNSAR statement reads, according to Wall-street.ro.

A draft law amending Law 132/2017 on motor third-party liability (MTPL) was filed by senators of the Liberal Party (PNL) and ethnic Hungarians' party UDMR, with the view of capping of MTPL fees at the reference tariffs calculated by the Financial Supervisory Authority (ASF) and used so far as an indicative benchmark only.

The MTPL fees soared too much after the largest insurer, City Insurance, went bankrupt, the initiators argue.

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