Original scientific paper
Europeanisation of the Solvency Principle in the Croatian Insurance System of Protection of Insured Persons and Traffic Accident Victims in the Case of Insurer Bankruptcy
Željka Primorac
orcid.org/0000-0002-9880-0369
; Faculty of Law University of Split, Split, Croatia
Abstract
The author compares the European regulations in terms of application of the solvency principle in insurance business and in terms of stability of the fi nancial system. The author analyses the European regime of solvency for the insurance companies and its direct effect on the
financial stability and long-term profitability of the insurer as a prerequisite for an effective consumer protection. In the context of insurer's financial insolvency and the obligation of civil liability insurance in terms of motor vehicle use in the EU member states the author re-examines the legal effects of the increase of necessary solvency capital of European insurers on the appropriate consumer protection. The author considers the questions of financing of the Croatian Insurance Bureau and the National Guarantee Fund, managed by the Croatian
Insurance Bureau, as regulated by the latest European legal Solvency II framework and its implementation in the Croatian legal system (Insurance Act, Ordinance on the method of calculating and time limits for paying contributions and on the manner of keeping and using assets
intended for liabilities of the guarantee fund). The author focuses primarily on problems of the legal status of the insurance contract in the case of insurer bankruptcy (the insured loss of insurance coverage within 30 days from the moment the insurer declares bankruptcy) and
the right of the injured party to file a legal claim against the insured insurer, i.e. the Croatian Insurance Bureau in case of insurer bankruptcy. The article shows the consequences of the regression demand of Croatian Insurance Bureau towards the liable insured persons whose insurer filed for bankruptcy (i.e. the duty of insured persons for settlement with the Croatian Insurance Bureau on the basis of their regress rights) but also Croatian Insurance Bureau's right to a compensation from the debtor's assets for the amount paid to the injured party by considering the claim at hand as the claim of the highest priority. The article examines the latest legislative solutions from the Act on Compulsory Insurance Within the Transport Sector
which introduces a limit for the financial assets that are paid from the Guarantee Fund in case of insurer bankruptcy, thus providing protection for the financial operations of the Guarantee Fund, and also of the insurers themselves who, in the past, had to pay for the entire
damage. It is questioned and critically reviewed whether and to what extent the Ordinance affects the injured party's chances for a full reimbursement.
Keywords
insurer solvency; bankruptcy; consumer protection; europeanisation; Croatian insurance system
Hrčak ID:
183850
URI
Publication date:
30.6.2017.
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