Why car owners complain about insurers and what MTIBU does
How well do MTPL insurers fulfill their obligations, to whom can you complain about them, and will these complaints make a difference? These are the questions that car owners face when choosing an insurer and in case of problems with payments.
Volodymyr Shevchenko, Director General of MTIBU, helped us to understand these topics.
How to assess the quality of work and reliability of the insurer
The MTIBU website publishes a quarterly traffic light graphic. Using a simple color display, it shows an integrated assessment of each insurer based on three main indicators: "overall performance assessment", "quality of settlement", and "level of complaints".
The MTIBU also prepares detailed information on the performance of each MTPL insurer on a quarterly basis (number of contracts, amount of premiums, number and amount of claims, average payment period, number and level of complaints, etc.) This data is also available on the Bureau's website.
How many complaints against CMTPL insurers are received by the Bureau
In the first three quarters of last year, the Bureau received 1784 complaints, and in the same period of this year - 1455. As we can see, the number of complaints decreased by 22%. Traditionally, most complaints are about delays in payment, but their number is also decreasing: 1393 for the three quarters of 2018 and 974 for the same period of 2019. Complaints for other reasons - refusal to pay compensation and disagreement with the amount of payment - amounted to about 300 and 200 in January-September 2018 and 2019, respectively.
The National Financial Services Commission also reported a decrease in the total number of complaints against all insurers in May-October of this year for all types of insurance by more than 10%. The number of concluded MTPL contracts is growing, while the number of complaints is decreasing.
For a realistic assessment of the quality of work of MTPL insurers, it is not so much the absolute number of complaints (their number) that is important as the level of complaints: the ratio of the number of complaints to the number of insurance claims paid. Thus, the average level of complaints against MTPL insurers is very low, about 1% (over 100 thousand insurance claims were paid in three quarters of 2019). This statistic includes both substantiated complaints (where there is a real violation by the insurer) and unfounded ones.
When an insurer is complained about, even though the company is acting in accordance with the law
1) Payment within 90 days from the date of submission of the claim to the insurance company. The application must be accompanied by all the necessary documents in accordance with the requirements of the Law "On Motor Third Party Liability Insurance". It is not uncommon for an accident victim to file a complaint about a delay in payment of compensation for damages when the statutory period for this purpose has not yet expired.
The Law "On Motor Third Party Liability Insurance" obliges the insurance company to make a payment no later than 90 days from the date the insurer receives the claim and all the documents attached to it. Sometimes victims mistakenly believe that the 90-day payment period should start from the moment of the accident, not from the moment the documents are handed over to the insurer.
The EU Directive sets a three-month deadline for paying insurance compensation after submitting a claim to the insurance company, so our legal provisions are fully in line with European standards and practices in the field of MTPL.
2) Payment taking into account the wear and tear of the car. This is a frankly unfair and outdated rule for victims, but it is in the current Law on Motor TPL Insurance and the Methodology for Commodity Expertise and Evaluation of Wheeled Vehicles, and the insurer is obliged to comply with them. We are working to ensure that the new version of the Law on Motor TPL Insurance contains a provision on paying the full amount of compensation for repairs to the victim of an accident.
Nowadays, the difference between the cost of repairing a damaged car and the amount of insurance payment can be recovered from the culprit of the accident - by agreement with him or her or in court.
3) Payment excluding VAT. Reducing the amount of the payment by the amount of VAT when transferring funds directly to the victim's account (bank card) is a requirement of the Law on MTPL. VAT is a tax, it is not a direct loss, and is not compensated if the victim did not repair his or her car at a service station that is a VAT payer.
In order to receive the VAT amount, an application in any form must be submitted to the insurer, attaching a document confirming that the damaged vehicle was paid for (a certificate of completion and the original receipt or other payment document) at the service station.
Where to complain if the insurer really violates your rights
The first step you should take is to write an official written appeal to the insurance company's management. This will help to quickly resolve the problem if it is caused by the shortcomings of specific employees of the settlement service.
A complaint can be filed electronically with the National Financial Services Commission or the MTIBU.
The complaint must contain all key information about the insured event and the process of its settlement, as well as personal data of the victim (name, address, date of the accident, license plates of the cars involved in the accident, names of the owners and drivers, the culprit's policy number, date of application to the IC, date and list of documents submitted to the IC, etc.), as well as a brief summary of the problem that has arisen.
How the MTIBU can influence the insurer
Unlike the National Financial Services Commission, the MTIBU does not have the authority to apply regulatory measures, we are not a regulator. Insurance companies themselves are interested in keeping the number of complaints to a minimum: the Bureau has a special monitoring indicator that takes into account the speed of payments and the level of complaints against the company. In addition, for insurance companies with more than 40% of payments made more than 60 days after the date of the accident, monthly cash contributions to the MTIBU funds are set at 1.5 times higher than for other insurers.
The MTIBU reviews each complaint, and if it is substantiated, the issue is often quickly resolved in favor of the victim after the Bureau communicates with the insurer.
We are now considering the possibility of setting up a special structure (an "ombudsman") within the Bureau next year to deal with pre-trial settlement of disputes between insurance companies and claimants, which should reduce the time for payments and the level of complaints.
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