PROVISIONS FOR GUARANTEE FUND DOUBLED
In the beginning of this week the Agency for Insurance and Gambling Supervision (AIGS) set the amount of provisions on mandatory insurance, which go to the Guarantee Fund. Under the order of the institution's Director Hristo Hristov, 2% of the aggregate amount of collected premiums from the Civil Liability insurance and 1% of the money from the Accident insurance, will go to the Guarantee Fund next year. Insurance companies will have to make their first payments by March 15, and the last ones - by end-August 2002.Last year the Guarantee Fund included 1% of the aggregate premiums from obligatory insurance. The present increase is due to the 100% growth of liability limits, experts explained.The new size of provisions to the Guarantee Fund were set at a meeting of the Fund's Management Board and were afterwards approved by the AIGS.The operation of the Guarantee Fund is regulated by a special legislative act and its role is to pay compensations in cases when the persons who have incurred the damages have no obligatory insurance. The Fund also pays compensations when the perpetrator of the insurance accident cannot be ascertained. The Guarantee Fund also pays for damages inflicted by unlicensed drivers.There is about BGL4.5MN in the Guarantee Fund now. This amount is sufficient for all pending payments, experts comment. However, there are sceptics who claim that with the new liability limits the money may turn out insufficient for compensating all injuries. Various options have been considered in setting the amount of provisions for the Fund. One of them projected that 6% of the obligatory insurance premiums would go to the Guarantee Fund. The premium itself is set each year, and if it is 2% for 2002, it could be raised again for 2003 if there are sound economic grounds for that, branch experts comment.