MNB: Insurers must validate contracts with former Astra policy holders
Insurers must recognize the mandatory vehicle liability insurance contracts as valid from October 1 for former policy holders of Romanian insurer Astra who terminated their contract by mutual agreement from September 30 even if Astra has not yet reported the termination of the contract in the Centralized Claim History Registration System (KKNYR), the National Bank of Hungary (MNB) said yesterday.
The central bank has been notified by insurance agents and customers that, in the case of some customers, where Astra has failed to report the contract termination on the KKNYR system, the new insurer has retroactively cancelled the new policy signed with the customer because the KKNYR indicated that the person operating the given vehicle still had an active contract elsewhere.
The MNB holds the view that - regardless of the data recorded (or not recorded) concerning the old policy in the policy registration or the KKNYR - insurers must accept the new contract as valid. If an insurer has cancelled the new policy in its own internal registration because of an error message received from the KKNYR, it must again record it and handle it according to its content.
The MNB notes that, under an amendment dated October 8, Hungarian mandatory vehicle liability policy holders of Astra can immediately sign a new contract with a different insurer after the withdrawal of the companyʼs license in the parent country. Their old insurance policy will be automatically terminated on the day preceding the starting date of the new contract. Thus, the problem will no longer affect Astra mandatory vehicle liability insurance policy holders looking to switch insurers after this date.
Head of the Hungarian insurers association Mabisz Anett Pandurics said last week that so far only 124,000 of Astraʼs 160,000 mandatory vehicle insurance policy holders have switched insurers by mutual agreement and recommended that those remaining should do so as soon as possible.
Romanian insurer Astra, which has a branch in Hungary, was declared insolvent and its license withdrawn by Romaniaʼs financial market watchdog in August.
Hungarian clients of Astraʼs Hungarian branch are eligible for compensation from Romaniaʼs state insurance guarantee fund up to the equivalent of €100,000.
Astraʼs Hungarian business had revenue from premiums of HUF 2.8 bln in the first half, giving it a market share of 0.62%, according to data compiled by the Hungarian Insurers Association (MABISZ). Revenue on premiums from mandatory vehicle insurance policies accounted for HUF 2.2 bln of the total.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.