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Wednesday 26.10.2016 | Name days: Kaiva, Amanda, Amanta

LTAB guarantee fund recovered EUR 576,000 this year

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn the first six months of 2015, the guarantee fund recovered EUR 576,000. EUR 376,000 of this amount was recovered from owners of vehicles and legal users who did not previously own OCTA policy and whose uninsured vehicle had previously caused a traffic accident. EUR 200,000 of this amount was recovered from LAAS Balva for insurance payments carried out in place of compensations in cases provided for in international law. In total, the guarantee fund has managed to recover EUR 9.67 million since 1997.

«Recovery of money in the guarantee fund is secured not only thanks to compensation of damage caused by recent accidents, but also accidents that took place many years ago by vehicles that were not insured at that moment in time. We have seen recovery of payments carried out as far as 1997. Initially, only LTAB was engaged in recovery of funds. However, as time passed, methods of recovering money became more varied, which allowed authorities to use resources beyond internal means,» – says LTAB Chairman Juris Stengrevics.

In the first six months, a bit more than 40% of regressively recovered funds were provided voluntarily by people responsible to traffic accidents; this includes signing a contract in regard to recovery of funds within a set period of time. A little over 20% was recovered with help from insurance association and nearly as much was recovered by handing some of the accident cases to companies operating in the field of recovering debts. Approximately 15% was recovered by foreign offices for traffic accidents caused by vehicles registered abroad. The remaining portion of funds was recovered with help from sworn bailiffs. Stengravics notes that people who caused traffic accidents and who refuse to return money to the guarantee funds should understand that the amount of regressive requirements will only increase and will be recovered to pay for damage caused by traffic accidents and losses that come from the use of services of outsourced companies and litigation.

As for recovery of payments from the guarantee fund in the first half-year of 2015, a total of 539 decisions have been made in regard to 461 insured case. The total amount of compensations recovered from those cases comes to nearly EUR 1.53 million, which is nearly 300% more than the guarantee fund recovered in the first half-year of 2014. This increase is largely tied to the fact that it is the guarantee fund, not LAAS Balva, who has to pay compensation for damage caused in traffic accidents abroad.

«Current trends and developments on the financial and OCTA market affect the capacity of the guarantee market every year. In 2010, the size of the guarantee fund was EUR 26.26 million and in 2014 – EUR 22.94 million. In the first six months of 2015 the fund has declined by another 6.14%. If the size of the guarantee fund declines below EUR 20 million, which may occur next year, considering current trends, insurers will have to carry out regular payments to the guarantee fund from every sold OCTA policy,» – explains the head of LTAB.


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