Tuesday, June 15 2010 11:07
NKR PM: In Nagorno-Karavakh motor third party liability should be introduced stage by stage
ArmInfo. The population of Nagarno-Karabakh Republic, especially the villagers, will not be able to afford the additional expenses implied by the introduction of motor third-party liability, NKR Prime Minister Ara Haroutyunyan said during a meeting with representatives of Armenian insurance companies, the Central Bank of Armenia and a number of NKR ministries in Stepanakert June 12.
The law on motor third party liability has already been adopted in Armenia and will take force in Jan 2011.
"Even Armenia has no experience of compulsory insurance and it is hard to say yet how things will develop though it is already clear that people will hardly welcome this initiative. In NKR this type of insurance can be introduced stage by stage only," Haroutyunyan said.
At first, the law should be applied to those buying cars, secondly, to those going to Armenia by car and, only then, to poor people, for whom 30,000 AMD (annual motor third party liability fee) is an unbearable burden.
Representative of Sil Insurance Andranik Ohanjanyan retorted that there is a misconception that compulsory insurance is essential for the development of the insurance sector. In fact, compulsory types of insurance help to solve social problems. Motor third party liability is a way to curb public risks while insurance companies are just instruments for regulating them. The state should decide whose interests it protects: the population who should have certain guarantees of financial security from the activities of car owners or the car owners who cannot afford insuring own liability, not mentioning compensating for the damages they may cause.
Haroutyunyan said that the introduction of motor third party liability in NKR may take 1-5 years depending on the success of this system and relevant infrastructures in Armenia.
In an interview to ArmInfo NKR Economic Development Minister Karen Yesayan said that motor third party liability should be introduced gradually. The establishment of such institutions affects people's personal budgets and is always a painful process. So, gradual transition is the best way here. In NKR and Armenia people differ in income and financial competence and these two factors should be taken into consideration.
Member of the Board of the Central Bank of Armenia Aharon Chilingaryan said that the tariffs and terms will be flexible. The amendments made to the law on road security concerning the registration of motor transport will allow insuring a car only for the period of its use, i.e. if a villager uses a car only during his seasonal activities, he will be able to insure his liability for this period only, which means that he will have to pay less.
Chilingaryan said that the Association of Insurers of Armenia will consider all proposals and recommendations of the NKR Government when entering this market.
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