Latvian Motor Insurers’ Bureau (LTAB) has received a request from Holland for the payment of EUR 2 million from the compulsory third party liability insurance (OCTA) Guarantee Fund, as reported by LTAB representatives.
Since mid-2023 LTAB has been receiving documents from the Dutch Green Card Bureau concerning a road traffic accident caused by a vehicle registered in Latvia and whose vehicle did not have an OCTA policy.
LTAB representatives say that this could be the most expensive compensation paid in the history of OCTA Guarantee Fund for an accident caused by a vehicle that was not insured. The total amount requested by the Dutch side to be reserved as compensation for the victim is EUR 2 million. This amount may go down once the full picture of what happened becomes clear.
LTAB report that in summer 2022 a vehicle registered in Latvia and no insured in Netherlands hit a cyclist. The victim suffered a severe brain injury and rehabilitation will require a long time. The accident is still being investigated. However, according to the law, the Dutch Green Card Bureau has requested to reserve EUR 2 million, which could be paid to the victim from the Latvian Guarantee Fund.
LTAB board chairman Jānis Abāšins notes that if the Dutch bureau’s initial forecasts come true, this compensation will be three times larger than the previous biggest compensation paid by the Guarantee Fund (EUR 623 000), which was paid for a road traffic accident in Denmark in 2012.
Abāšins adds that frequently such road traffic accidents result in injuries that require very long treatment times or result in disabilities, making so that compensation amounts reach considerable size and are paid over the course of years.
According to data from LTAB, as of the 31st of December 2023 the Guranratee Fund’s available finances reach EUR 15.55 million.
Abāšins explains that the amount of funds held in the Guarantee Fund has gone down in recent years, dropping multiple times beneath that level, specifically when insurers had to pay double the amount. This is largely due to the growing remuneration costs in place of the insolvent insurance company Balva, where the costs have already reached EUR 5.3 million, paid in the form of OCTA discounts for farmers and disabled people, which have to be financed from the Guarantee Fund.
From the 23rd of December 2023 onward, in accordance with the EU directive, the Guarantee Fund will also have to take over liabilities arising from OCTA policies issued by insurers registered in Latvia in other European countries in the event of insolvency of these insurers.
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