The insurance sector has been waiting for the adoption of the law on "mandatory third-party liability insurance of car owners" for several years.
The association agreement with the European Union obliges the country to implement the mentioned standard, although the draft law has been in the legislative body since the end of 2018. Both the regulator and the sector expect that the discussions in the parliament should start in the spring session of the current year. The sector has already agreed how the collected premium will be distributed among the insurers. As for the insurance premium itself, the maximum ceiling of the annual premium in the case of a light car will be GEL 150.
According to the general director of "Aldagi", the matter concerns to an additional market of GEL 100 million, however, it is difficult to determine the profitability of the industry.
"How much will be the profitability? I don't know, it will be difficult to say in the first year, we had many examples in Eastern Europe where the insurer left the project after entering. It's hard to talk about expectations, but 90-95% loss and 5-10% profit would be good. We will be able to talk about it in a year", Giorgi Baratashvili explains.
It will be revealed during the committee deliberations whether the legislators will already have comments regarding the bill submitted to them. According to the head of the insurance supervision service, the draft law submitted by them should be discussed and adopted this year.
The law, which obliges citizens to have third-party liability insurance for car owners, should come into effect in January 2024.
