Economy, Business And Markets

Third Party Auto Insurance Elevated

Third Party Auto Insurance ElevatedThird Party Auto Insurance Elevated

Lawmakers approved measured on Saturday giving Bodily Injury Indemnity Fund (BIIF) the status to be used as an emergency fund for auto third party insurance.

The legislation makes it possible for BIIF to indemnify third party policy holders in the event insurance companies fail to meet their obligations due to either bankruptcy or inadequacy, ICANA reported.

Central Insurance of Iran company along with the Supreme Council of Insurance and courts of law are the three bodies that can affirm or reject an insurance company’s claim to bankruptcy or financial inadequacy.

Bodily Injury Indemnity Fund, originally established in 1969, is affiliated to the Central Insurance and aims to compensate bodily injury in different insurance sectors. But since third party insurance was passed into law only recently after a seven-year test period, BIIF now covers this area as well.  

Lawmakers also obliged insurers to reimburse third party holders’ losses within 20 days. Delays in payment will be subject to penalties.

 Personalizing Premiums

MPs also instructed the Central Insurance and Law Enforcement Forces to develop a framework for determining third party insurance premiums based on drivers’ behavior, before the end of the next five-year economic development plan in March 2021.

“The planned framework should take into account car owners’ financial strength, the vehicle price and the driver’s track record,” he said.

The law notes that insurers should offer added incentives to safe drivers.  Insurers claim that in 2013 alone, they incurred 11.64 trillion rials ($400 million at the official exchange rate) in losses related to third party insurance claims.