New law regulating MTPL insurance in Romania


On 12 June 2017, the Official Gazette published a new law on mandatory motor liability insurance for damages caused to third parties as a result of motor vehicle or tram accidents (“Law 132”). The new legislation seeks to bring more stability and predictability to the motor third party liability (MTPL) insurance market and to better protect the interests of prejudiced persons. Law 132 is expected to further align local and EU MTPL insurance practices.

Some of the main changes brought by Law 132 are:

i. Insureds can choose to enter MTPL insurance contracts for a period ranging from 1 to 12 months (but not in increments of less than 1 month). In limited cases, the insurance contract may also be concluded for periods shorter than 1 month;

ii. Insurance premiums can be paid in one lump-sum or in instalments;

iii. The minimum coverage limits of MTPL insurance are:

a) for material damages resulting from one accident, irrespective of the number of prejudiced persons, the compensation limit for accidents is EUR 1,220,000; and
b) for bodily injury and death, including for patrimonial damages, irrespective of the number of prejudiced persons, the compensation limit for accidents is EUR 6,070,000;

iv. MTPL insurance contracts may be suspended upon the insured’s express request;

v. Prejudiced persons may choose any car repair service provider, without being limited or influenced in his option by the insurer or by the car repair service provider;

vi. Subject to certain limitations, it is possible to implement a direct compensation system between MTLP insurers, thus allowing the prejudiced person to be indemnified by his own insurer, rather than reverting to the insurer of the person who caused the accident; and

vii. Specific criteria for amicable determination of the amount of compensation for accidents. Courts of law will determine the compensation based on medical, psychologic and statistical data.

Law 132 will enter into force on 12 July 2017 (30 days after its publication by the Official Gazette). As an effect of Law 132, the Romanian Financial Supervisory Authority is expected to issue secondary legislation to ensure its implementation in practice.

If you would like additional details, please contact Florentin Giurgea or Cristina Popescu.