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What is going to change in the Motor Liability Insurance Act?

Ministry of Social Affairs and Health
Publication date 19.11.2015 14.55
News item

The Motor Liability Insurance Act will be reformed. The provisions in the new Act will be clearer and improve the status and rights of policyholders and aggrieved parties. Hannu Ijäs, Director of the Insurance Market Unit at the Ministry of Social Affairs and Health, tells more in a video interview.

Link to the video interview:

Text version of the interview

What is going to change in the Motor Liability Insurance Act?

"Above all, the legislation will be made clearer and modernised. The Motor Liability Insurance Act entered into force in 1960 and it requires some modernisation to respond to modern needs.  The provisions on insurance obligation and on vehicles to be insured will remain the same. Provisions on reimbursability will not change much either. There the only change is that drivers participating in motor vehicle competitions will not anymore be covered against injuries they cause to themselves. This change is made because of the increased risks in such competitions.  Such injuries will then be covered by voluntary personal insurances."

The act is connected to the current deregulation process. How is it going to be visible in practice?

"We have carefully examined all provisions and considered whether they are necessary. The number of provisions will slightly decrease when overlapping legislation or otherwise unnecessary provisions will be abolished."

Will there be changes in the reimbursement procedures?

"The regulation of the reimbursement process will be specified. One example of this is that the act will be complemented by a provision that obliges the insurance companies to justify their decisions better than nowadays in cases of personal injuries. Also the deadlines for handling damage cases will be shortened so the reimbursement process will probably become faster at insurance companies."

How can an ordinary person in traffic see that many details in the act are based on the EU Motor Insurance Directive?

"The purpose of the Motor Insurance Directive is to make sure that policyholders can travel in the EU area without worries when they have taken out an insurance policy in their home country. The insurance is then valid in the entire EU area. This is important for people suffering damage. The insurance cover remains valid, regardless of in which EU country the vehicle causing the damage was insured, in which country the person suffering damage lives or by which insurance company the insurance was provided."

Will the bonus system of motor insurance payments change?

"Yes, the bonus system will change to some extent. These days the bonus system is rather strictly regulated but, after the reform, there will be only one general principle: the damage history shall be taken into account in some way that raises the insurance payments after damages and reduces the payments after damage-free driving. Then we won't have this more detailed regulation that has harmonised practices between different insurance companies. We are hoping that a more flexible regulation system – where each insurance company makes decisions independently – will promote the competition between insurance companies. In the long term, it could also decrease insurance prices."

Interview: Kimmo Vainikainen
Video: Katariina Vesikko, Kimmo Vainikainen

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