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PREPARATORY WORK ON INTRODUCTION OF COMPULSORY AUTO INSURANCE IN
ARMENIA TO START IN 2007
YEREVAN, APRIL 7, NOYAN TAPAN. It is envisged to start in 2007 the
preparatory work on introduction of compulsory auto insurance - civil
liability of the owners of transport means with respect to third
persons - in Armenia. Levon Mamikonian, Director General of Cascade
Insurance CJSC, told NT correspondent about it. According to him, this
practice is common in many countries, thanks to which in particular
the expenses to compensate for the harm caused to health of those who
suffered as a result of a car accident are transferred from the budget
to the private sector. Besides, in a number of countries, the state
insures some groups of state employees and their civil liability by
using budget resources (state compulsory insurance). L. Mimikonian
said that the work on introduction of various types of compulsory
insurance first of all presupposes improving the financial stability
of insurance companies, enhancement of their technical capacities and
transparency of their activities.
Starting January 1, 2008, the authorized capital of an insurance
company must make at least 500 mln drams (about 1.1 mln USD). It was
noted that prior to the introduction of compulsory auto insurance, a
body to regulate the process of insurance claims should be set up, as
it is expected that after auto insurance is made compulsory, the
number of road accident registerted will increase 2-3fold. According
to L. Mamikonian, the development of the insurance market in many CIS
countries is conditioned by the introduction of compulsory insurance
services. By making use of compulsory insurance services and receiving
compensations, people started to understand the necessity and
advantage of insurance, after which various types of voluntary
insurance also began to produce results. For example, 37 types of
compulsory insurance are used in Russia. A few years ago they
accounted for 75% of insurance payments on the Russian insurance
market. L. Mamikonian noted that out of 22 licensed Armenian insurance
companies, only 10-12 are operating actively. An average annul growth
of 30% was registered on the insurance service market over the last
3-4 years, although recently the growth has slowed down. In 2003, the
market volume made 4 mln USD, in 2004 - 7 mln USD, while in 2005 -
7.5-8 mln USD (according to preliminary data).
ARMENIA TO START IN 2007
YEREVAN, APRIL 7, NOYAN TAPAN. It is envisged to start in 2007 the
preparatory work on introduction of compulsory auto insurance - civil
liability of the owners of transport means with respect to third
persons - in Armenia. Levon Mamikonian, Director General of Cascade
Insurance CJSC, told NT correspondent about it. According to him, this
practice is common in many countries, thanks to which in particular
the expenses to compensate for the harm caused to health of those who
suffered as a result of a car accident are transferred from the budget
to the private sector. Besides, in a number of countries, the state
insures some groups of state employees and their civil liability by
using budget resources (state compulsory insurance). L. Mimikonian
said that the work on introduction of various types of compulsory
insurance first of all presupposes improving the financial stability
of insurance companies, enhancement of their technical capacities and
transparency of their activities.
Starting January 1, 2008, the authorized capital of an insurance
company must make at least 500 mln drams (about 1.1 mln USD). It was
noted that prior to the introduction of compulsory auto insurance, a
body to regulate the process of insurance claims should be set up, as
it is expected that after auto insurance is made compulsory, the
number of road accident registerted will increase 2-3fold. According
to L. Mamikonian, the development of the insurance market in many CIS
countries is conditioned by the introduction of compulsory insurance
services. By making use of compulsory insurance services and receiving
compensations, people started to understand the necessity and
advantage of insurance, after which various types of voluntary
insurance also began to produce results. For example, 37 types of
compulsory insurance are used in Russia. A few years ago they
accounted for 75% of insurance payments on the Russian insurance
market. L. Mamikonian noted that out of 22 licensed Armenian insurance
companies, only 10-12 are operating actively. An average annul growth
of 30% was registered on the insurance service market over the last
3-4 years, although recently the growth has slowed down. In 2003, the
market volume made 4 mln USD, in 2004 - 7 mln USD, while in 2005 -
7.5-8 mln USD (according to preliminary data).