Thursday’s decision of the Seym on so-called towing, rejecting all the amendments of the Senate, means permission to drive a car without third party insurance contract. Seym dropped practically all the sanctions for the lack of policy, which – let us remind – is obligatory in Poland. The law states a penalty of 50 zl for a driver who does not carry an acknowledgment of the policy. If the vehicle is uninsured, UFG imposes a penalty on the driver.
Collection of these penalties shall not exceed 50 percent. At the same time the new law does not specify the shape of the most important issues – uninsured vehicles off the road. The Parliament assumed that the police will be able to constantly check in an electronic database whether the vehicle is insured. Meanwhile, PIU repeatedly stressed that it is unmanagable, because the police does not have access to the CEPiK database online.
PIU has been trying for several months to strive for an amendment that would make a vehicle driver, who does not have evidence of civil liability insurance contract with him/her, be taken off the road by the police. The best solution would be to retain registration documents. The Association agreed with the arguments of parliament that towing of the car is too inconvenient penalty for the driver. Seym, however, stated that no sanctions are necessary. What is the risk? Currently in Poland there are about 200 thousand uninsured vehicles. It can be expected that these statistics will change to the detriment shortly after the adoption of the new shape of regulations. The driver, who drives unisured vehicle and causes an accident, incurs himself/herself enormous costs. Car repair, rehabilitation and treatment of the victim or even a lifetime pension to the victim – for all that the driver will have to pay from his/her own pocket. Therefore, Seym’s Thursday’s decision will cause some drivers – especially young and inexperienced – to pay for their mistakes for the whole life. You can protect yourself againt such scenario in only one way – by purchasing MTPL.
The amendment project voted by the Parliament at the same time is contrary to the existing legal order mandatory in most EU countries, where the regulations concerning compulsory insurance of motor vehicles are strict. For a long time many countries have already had laws enabling confiscation of uninsured vehicles or their temporary retention as well as keteping the vehicle’s plates and the car’s documents. Poland goes agains this trend, the Parliament contributes to a safety reduction in on Polish roads.
Last year the Poles spent more than 25 billion PLN for health care from their own pocket. According to forecasts made by the Polish Insurance Association by the beginning of 2012 level of these expenses will have increased to 40 billion PLN. Meanwhile, the revenue from health insurance policies is only 120-150 million PLN, representing only 0.5 – 0.6 percent of private expenses on health services. What is the future of health insurance in Poland? Will it develop for the benefit of patients? PIU representatives outlined three possible scenarios for the development of health policy in Poland until 2012.
Scenario I – Status Quo
In this scenario, there won’t be any fundamental changes on the Polish market concerning medical services in the next three years. Subscription companies still continue to benefit from tax advantages (ie, sell most of their services as occupational medicine, even though the reality is different), and insurers can count only on organic growth at a rate close to the present. In this scenario, in 2012 on the Polish market there will be 120-150 thousand hospital products – mainly insurance. They give you access to limited public system benefits and increased surgical and accommodation standard and certain procedures, which are already of commercial interest (eg, childbirth).
Subscription companies will continue to focus on outpatient services. Hospital products will be included only in the most expensive offers, available for a limited group of customers. They will also lead the distribution of hospital insurance or insurance companies related by capital.
Prospects for consumers:
• increase of the queues to specialists in the subscription companies
• lack of universal hospital insurance = expensive hospital services (available in the ffs system and by insurance)
• State budget losses resulted from continuing tax preference for companies
• lack of proper supervision of subscription insurance companies continuing their business without a license
Scenario II – equalization of the laws of subscription companies and insurers
This scenario is based on the assumption that the legislature will determine exactly what is health insurance. In this case, insurance companies, in collaboration with medical companies would be responsible for the offer and the range of available benefits within the insurance policies, selling policies an a professional risk, wheres medical companies for the provision of medical services, and therefore the implementation of the service. In such scenario, in Poland, a rapid development of health insurance is noticed, both ambulatory and hospital. This will happen primarily through the so-called ‘polisowanie’ of the subscription and extension of the offer to existing customers to hospital insurance.
Prospects for consumers:
• shorter queues for specialists and medical services (outpatient and hospital)
• more popular products, hospital offers opportunities for lower price, and thus greater availability
• all activities in health insurance (legal and on the border of law) is under a united supervision
• development of private health insurance hospital increases the pool of resources available in the entire health care system and discharges queues in the public system
Scenario III – legislative changes promoting voluntary hospital insurance
According to recent announcements of the Ministry of Health, the customers who opted for voluntary hospital policy, in return, receive tax allowance. At the same time subscription companies continue to benefit from their allowances. It has a positive effect on the rate of development of health insurance in Poland, which has gained a bigger interest than subscription insurance. By 2012 the market will have had at least half a million such policies, which means the premium of 0.6 – 1 billion PLN. The vast majority of the money (though not all at once) supplies the health care system – that is, mainly hospitals.
Prospects for consumers:
• the growing prevalence of hospital insurance = lower price
• a clearly defined co-operation of medical and insurance companies in the field of hospital products, but still uneven competition in the market for outpatient services
• for clients of insurance companies the same or shorter queues due to transition to insurance contracts
• all hospital services offered by insurance companies are under appropriate supervision
Basic features favoring the subscription companies today:
• signing most contracts as occupational health services, although this is not true
• lack of supervision of insurance services operating without a license
• no need to meet the same capital requirements and financial security services, which must met by the insurance companies
Information in PDF format
Insurance companies affiliated to the PIU will sign an agreement on the principles and procedures for mutual recognition of claims of the voluntary motor insurance. The agreement, the initiative of the PZU means a considerable improvement of the recognition and implementation of recourses by the company.
It is a great convenience especially for customers. The agreement means that the protracted process of recognition and implementation of recourse by the insurer’s case does not necessarily result in the loss of discounts for the policy.
– Thanks to the cooperation of insurance companies within the Polish Insurance Association, an important agreement has been established. It is not only important that the arrangements will normalize relationships between insurers, but that the agreement is signed by companies representing more than 90 percent of compulsory motor market. This compatibility means that the contract will have strong and active impact on the functioning of the market – says Grzegorz Pradzynski, the chairman of the board of the Polish Insurance Association.
Basic principles of contract agreed in PIU assume that the case of recourse will be conducted in a faster and easier way. The agreement sets out principles and procedures for recognition by insurers polluters covered by insurance claims of civil liability arising from compensation for voluntary insurance.
Within the claims covered by the contract there is also the reimbursement of towing and parking the vehicle under the insurance, as long as the parking and towing is connected to the damage under the AC insurance. In addition, the companies committed to the elimination of losses under the voluntary insurance without preference to those victims whose damages are not covered by the contract.
The Agreement contains 13 companies, whose market share in motor third party liability insurance on 31.12.2008 amounts to more than 92 percent. (Source: FSC).
Information in PDF
On June 15 and 17 the MSWiA held two conferences on the Law project concerning central register of vehicles and central register of drivers and on changing some other acts. During the conference the Board submitted results of the consultation of draft of the Act after the agreement of 26 February. PIU received confirmation from MSWiA that the insurance companies and the Board will have a legal access to the system CEPiK free of charge.
As to the rules regarding loading the CEPiK system by companies, the Act guarantees two alternative channels: the present – through the Information centre (UFG) – and direct. These channels are to be maintained indefinitely. Companies are also able to change the loading system, because neither the Board nor the MSWiA can oblige them to use or resign from any of them.
Durng the conference it was also agreed that there the Act will be amended by a Regulation which will describe the details of loading and accessing data in CEPiK system. It will apply also to the anti-fraud module (for companies, PIU and UFG). This regulation will govern the rules for maintaining data quality in the process of loading system and providing information from the CEPiK system, in particular the automatic consideration of certain amendments to vehicle information and security issues of access and loading.
It was also confirmed that none of the options of ways of communication with CEPiK will not create replicas of the database unnecessary for the proper arrangement of mutual referral relationships databases – by CEPiK itself and databases operated by all stakeholders of the system. According to Project Manager of CEPiK, determining the rules of referral is the primary task in the work of the Regulation.
At the request of the MSWiA, PIU will organize a series of working meetings for the Department of the State Central Register and Computer Networks of MSWiA in order to make substantive arrangements, which then will be contained in the above mentioned Regulation. This gives the insurance environment a chance to shape the law in such a way that it meets optimally business expectations in relation to the CEPiK system.
Regarding the register fees from MTPL contracts (OC), it is agreed to include a general standard in the Law on Compulsory Insurance, UFG and PBUK, and such fee will be determined in the Regulations, depending on the actual realization of service by the CEPiK system for the insurance market.
In conferences with the MSWiA the PIU was represented by Andrew Maciążek (Board member), Dariusz Markowicz (member of the Working Group on CEPiK), Thomas Chelmicki (Chairman of the Committee for Information Management), Mariusz Ilnicki (Legal Advisor) and Stefan Szyszko (Director of Information Management Department of insurance PIU).
Good cooperation of PIU and MSWiA is a result of involvement of representatives of the MSWiA in the work of the PIU Subcommittee for Standardization.
On 14 July the Polish Insurance Association received a Regulation proposal of the Council of Ministers on the establishment of the National Coordinating Committee on the Euro, the Coordinating Council and interdepartmental Working Teams for preparation for introducing the Euro by the Polish Republic.
The task of the Coordinating Committee will be decision-making, initiation and monitoring of activities related to the preparation of the Polish accession to the euro zone. The Coordinating Council will in particular interact with the the Government Plenipotentiary, monitor possible risks associated with the process of introducing the Euro in Poland, coordinate the work of the Working Groups and Working Teams while introducing the euro. Working teams will be advisory and opinion-making bodies of Coordinating Council, and their task will depend on the preparation of joint recommendations, opinions and information to produce a sub-National Plan of Euro Introduction.
Polish Insurance Association has been invited to participate in the Financial Sector and Financial Stability Working Team. The tasks of the Team will in particular include:
1 / Identifying the necessary preparatory actions in the financial sector in connection with the planned introduction of the euro in our country as well as the determination of the principles and timetable for their implementation,
2 / monitoring the preparatory activities for the financial sector for the euro.
Polish Insurance Association will actively participate in the Team and keep its members informed about the progress of this work.
On the website of the Ministry of Finance in the Public Information Bulletin were published the following: a draft law amending the Law on tax on goods and services, road transport law and the law amending the Law on tax on goods and services (2 July 2009). Information about this project was also communicated to all Members of the Association.
Polish Insurance Association, considering the importance of this project for the insurance market, has decided to state its position and present it to the Ministry of Finance.
It did it despite of not getting this project in a formal way and despite the surprising omission in the list of organizations consulted in the work on this project.
PIU will also send a letter to the Ministry of Finance, reminiding that in projects of this scale, voice of the insurance environment should not be ignored.
Polish Insurance Association sent a letter to Mr. Jacek Sadowy, the president of the Public Procurement Office, criticising the opinion of the UZP entitled “Award of contracts for employee group life insurance”. The Procurement Office recommends the use of the Public Procurement Law in the context of contracts of group life insurance.
In the letter, PIU notes that the group insurance is not related to spending public funds, so the application of the PPL is not justified. The Board also notes that the use of PZP in the group insurance raises the risk that employers who want to protect workers, will chose the insurance policy because of its price. This way they will narrow the choice of products with better and broader protection. PIU stresses that the price may not be the sole and primary determinant of the attractiveness of the product, by definition designed to be protective.
The PZP Act blocks also the possibility of changing conditions of the contract of insurance in relation to those shown in the original offer. Interpretation of the Public Procurement Office therefore does not permit insurance companies to customize any products to new and changing needs of insurance for workers.
PIU for several weeks have been exchanging views with the representatives of the Procurement Office on group insurance solutions. Before sending the attached letter, there were also two meetings concerning this issue. In the first meeting with the president of the Public Procurement Office the insurance market was represented by Mr. Piotr Kuszewski – representative of the Commission on Life Insurance PIU. The second meeting brought together representatives of the PIU Insurance Commission for Life, The PIU Bancassurance Working Group and PIU experts.
The Polish Insurance Association, together with professional organizations like PIIT (Polish Association of Information Technology and Telecommunications) and PTI (Polish Society of Computer Sciences) has maintained a negative stance on the draft amendments to the Law on electronic signatures.
In the opinion of the Polish Insurance Association, the proposal of the Ministry of Economy concerning the introduction of new signature certificates is neither justified, legal nor economic. According to the Board some solutions proposed in the project may affect the competitiveness of the market and may have a negative impact on the functioning of electronic signatures in information insurance systems.
With this amendment the Board expects that regulatory barriers to reduce costs and increase the possibility of using currently available forms and electronic signature services by insurance companies and citizens.
In the Association’s opinion a proposal presented by Ms Szydłowska, for subsidizing fire services from motor policies is an attempt to establish paratax incriminating Polish drivers.
Acceptance of such solution does not have reasonable grounds according to the insurance self-government. Such charges are also not used in other EU countries.
This is the latest development including financial data, a summary of insurance schemes as well as other important information about the Polish assurance market. It represents a set of key data for both domestic and foreign investors.
The report was prepared in both Polish and English.
PIU will regularly prepare similar studies for PAIiIZ.
