The new system for applying the “bonus-malus” principle in "Motort-thord-party liability” (MTPL) insurance will be yet another element by which insurance companies will compete, explained Nikolay Stanchev, Chairman of the Management Board of the Bulgarian Association of Insurers (ABZ), in an interview with BTV. A few days ago, amendments to two ordinances were published in the State Gazette, making it possible to apply the “bonus-malus” principle to the MTPL insurance policy.
The amendments make it possible to collect and share information about past vehicle damages in a single system, accessible to all insurance companies. The bonus-malus system is a mechanism by which the price of insurance is determined more fairly according to the driver’s risk profile. Thus, drivers who have caused damages will pay a higher price, while compliant drivers will receive a discount. An additional effect of introducing the system will be to encourage more responsible driving. Similar systems have been applied in many European countries for years.
The Bulgarian regulatory framework provides that each insurer will use the damage history system and independently determine how this will affect the final price. According to data from the Financial Supervision Commission, passenger cars that have caused damages account for about 3-3.5% of all registered vehicles.
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