Yuri Todorov, Chairman of the Association for Insurance Security: The electronic policy will not raise the scope of the Civil Liability insurance

- Mr. Todorov, what are the disadvantages of the introduction of the electronic policy in Bulgaria? What risks does it pose and what improvements in the system are required?
- I welcome the establishment of the electronic policy because it has enormous advantages over the present way of issuing Civil Liability policies. In the first place, it will make things easier for insurers and will create greater security for customers. But I cannot agree with the option for the policy to become valid from the time of its entry in the electronic register, i.e. at the time when the system generates the electronic code.

- But representatives of the Financial Supervision Commission (FSC) claim that this will increase the scope of the Civil Liability insurance…
- No, I don’t think so. Technical innovations create both advantages and opportunities for committing fraud. For example, if we have an unscrupulous driver who drives without a Civil Liability insurance and causes a road traffic accident, he or she could make a mobile phone call to his/her insurance broker/agent and an insurance policy could be issued within a few minutes. When making a subsequent inspection by the traffic police, which as we know cannot be at the place of the accident, the system will recognise the driver as having a valid Civil Liability insurance. Even if the policemen establish by a single SMS that the policy was issued just an hour ago, they cannot sanction the driver in any way for having driven without it. This will limit the scope of the Civil Liability insurance and will bring greater ease to those who are, anyway, used to drive without a Civil Liability policy. Therefore, I believe the better option is for the policy to become valid 0:00 a.m. on the day following its issuance or no less than six hours after its issuance.

- Does the entry of more mediators when the payment of the Civil Liability insurance in a single instalment is introduced pose any risks?
- It is not appropriate to bring new mediators on the market. The more they are, the more prices rise, as well as the opportunities for fraud, i.e. if the client fails to pay the mandatory insurance, he/she should not drive his/her car.

- Yes, paying the Civil Liability insurance in a single instalment would be a financial burden for companies that own 10 or 100 vehicles…
- I don’t think the lump-sum payment of the insurance is a good idea in general and a compromise option for a rescheduled payment of the policy in two instalments should be considered. The big problem actually comes from rescheduling the payment in three or four instalments because customers forget purposefully to pay their liabilities.

- What is your opinion regarding the proposal for the price of the Civil Liability insurance to be based on the number of punitive points on the client’s driving licence?
- The idea was launched by me and the Association for Insurance Security; we submitted to the Patent Office the method for its calculation and we offered it to the FSC as well. Data about road traffic accidents is entered daily in the Road Traffic Police Guarantee Fund. With the introduction of the electronic policy, all the information will be integrated. But insurers do not use it even now due to the lack of a common methodology. Not a single insurer offers an actual bonus system encouraging clients to drive more carefully. Moreover, the proposed option will eliminate the necessity for daily registry of the reports on the part of the Road Traffic Police. For each road accident, the guilty driver will get four punitive points plus the respective number of points for the traffic violation and the number of points on the driving licence will easily show the risk level.

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