1 L A W ON COMPULSORY TRAFFIC INSURANCE I BASIC PROVISIONS Purpose and Application Article 1 This Law shall govern the compulsory traffic insurance, set up the Guarantee Fund and define its authority, and the manner in which it shall be financed, as well as grant public capacity to the functions to the Association of Serbian Insurers (hereinafter referred to as: the Association. Types of compulsory traffic insurance Article 2 For the purposes hereof, the types of compulsory traffic insurance (hereinafter referred to as the compulsory insurance ) shall be as follows: 1) Insurance provided for passengers in public transport against consequences caused by accidents; 2) Insurance provided for owners of motor vehicles against liability for damage caused to third parties; 3) Insurance provided for aircraft owners against liability for damage caused to third parties and passengers; 4) Insurance provided for vessel owners against liability for damage caused to third parties; The owner referred to in paragraph one hereof shall also include any user or other person registered as owner of the transportation vehicle in accordance with law. Insurance against liability for damage caused to third parties concluded by the owner of the means of transport, shall cover, under the conditions and in the way provided by this law, the damages the means of transportation makes to third persons, regardless of the fact who is on the position of the driver. Meaning of Certain Terms Article 3 For the purpose of this law, certain terms shall have the following meaning: 1) A traffic accident means an event where damage has occurred as a result of a means of transport usage; 2) transportation vehicle which includes a motor vehicle, airplane, boat or other vehicle provided by this law, shall have the meaning as defined by the law which regulates the relevant type of traffic, provided that the motor vehicle shall include a trailer also; 1 Disclaimer: In the event there may be discrepancies which arise between the Serbian and English versions of the document, the Serbian version is the legally binding document.
- 2-3) The user of a means of transport is a natural or legal person using a means of transport by consent of the owner; 4) A liable insurer means an insurance undertaking with which the owner of the means of transport, which caused the damage, concluded a third party liability insurance contract; 5) a claimant is any person entitled to compensation of damages on the basis of this law. 6) A multilateral agreement means an agreement concluded between national insurance bureau of the EEA Member States and other associated states according to which each national insurance bureau guarantees for damages incurred on its territory by using a vehicle usually located on a territory of the other state, a signatory of the agreement, regardless of the fact that the vehicle is insured or not; 7) the territory in which a motor vehicle is usually located means the territory of a European Union Member State: - - whose registration plate is placed on the motor vehicle, regardless of whether the plates are permanent or temporary, - - which issued the insurance sign or any other identification mark similar to a registration plate placed on the motor vehicle, in the case when registration is not necessary for a particular type of the vehicle, - - in which the user of a motor vehicle has his/her residence, in the case when a particular type of the vehicle does not require registration sign or another identification mark similar to a registration plate; - - in which a traffic accident has occurred in the case when a motor vehicle involved in the accident does not have a registration plate or has a registration plate which does not correspond or no longer corresponds to the vehicle. 8) Special Drawing Rights (hereafter: SDR) means the basic calculation unit defined by the International Monetary Fund; 9) Maximum Take Off Mass (hereinafter: MTOM) means the maximum permissible mass of aircraft at take-off which corresponds to the certified mass specific for each type of aircraft and which is set out in the respective aircraft airworthiness certificate; Contracts on Compulsory Insurance Article 4 The owners of means of transportation, used for public transport, and the owners of other means of transportation referred to in Article 2, paragraph 1 hereof, shall be required to enter into contracts on Compulsory Insurance before the vehicle is put into public transportation. In the case of initiating the bankruptcy proceedings against the insurance company, the concluded compulsory insurance contracts shall remain valid until the period of their validity has expired. Effect of the Contracts on Compulsory Insurance Article 5 Insurance Companies shall be required to enter into the contracts on compulsory insurance under the insurance terms and at the premium rates applicable at the time such insurance contracts are made.
- 3 - An insurance company cannot refuse an application to close a compulsory insurance contract if the applicant accepts the conditions and the premium tariff of the insurance company for that type of insurance valid at the time of the application for closing the contract on insurance. Insurance conditions are an integral part of the compulsory insurance contract and the insurance company is obliged to hand them over to the policy holder upon closing the contract. The provisions of insurance terms and conditions which regulate the rights of the claimants of less importance than the rights provided by this law, shall have no legal effect. The liability of the insurance undertaking ensuing from the compulsory insurance contract begins upon the expiry of the 24 th hour of the day listed on the insurance document as the date of commencement of coverage and ceases upon the expiry of the 24 th hour of the day listed as the expiry date of coverage, if not agreed otherwise. Notification on the insurance terms and premium tariffs Article 6 Insurance company shall be obliged to submit to the National Bank of Serbia insurance terms for compulsory insurance, the tariff and premium system with technical bases of the insurance premium not later than 90 days prior to implementation, solely for the purpose of verification of their compliance with regulations, actuarial principles and insurance profession rules. At the same time, the insurance company shall be obliged to submit to the National Bank of Serbia the opinion of certified actuary on sufficiency of insurance premium for permanent settlement of all obligations from the compulsory insurance contract and a three year operating plan of the company illustrating the sufficiency of the premiums calculated. If the National Bank of Serbia determines that the terms of insurance, the tariff and the premium system referred to in paragraph 1 of this Article are not in accordance with legislation, actuarial principles and practices of the trade, it shall issue instruction to the insurance company to harmonize it with legislation within 30 days. If the National Bank of Serbia issues instruction from paragraph 3 herein, the insurance company shall not implement the compulsory insurance terms and premium system due to which the instruction had been issued, until the orders from the instruction have not been observed. Insurance sum and sum insured Article 7 The amount payable by the Insurance Company under the compulsory insurance shall be limited to the sum insured applicable at the day the loss event occurred unless any higher amount has been provided by the insurance contract. The insurance sum and/or the sum insured referred to in paragraph one hereof shall mean the maximum amount payable by the Insurance Company against a single event of damage. The insurance sum or the sum insured for the small claims and franchise referred to in Article 92, paragraph 2 hereof shall be determined as the RSD
- 4 - equivalent of the amount in euro calculated at the median exchange rate of the National Bank of Serbia on the date the loss occurred. Obligations of an owner and/or a person operating the means of transportation Article 8 The person operating the means of transportation (hereafter: a driver) shall be obliged to keep the insurance policy or other confirmation of a closed insurance contract on his or her person during the time he or she uses the means of transportation and shall present it upon request of an authorized official. In the case the means of transportation is operated by a driver who is not the owner of the vehicle, the owner of the vehicle shall be obliged to provide the diver with the insurance policy during the usage of the vehicle, or some other type of evidence on concluded insurance contract, and the owner should also have the European Accident Report. Notwithstanding the provision in paragraph 1 herein, the person operating an aircraft shall be obliged to produce the insurance policy or other evidence on closed compulsory insurance contract from Article 2, paragraph 1, items 1) and 3) of this law, on the request of an authorized officer prior to aircraft take off or after landing; In the event of a traffic accident, the driver shall be obliged to provide personal details and details regarding the compulsory insurance to all persons involved in the accident who are entitled to indemnity claims according to this law. Insurance companies obligation to compile data Article 9 The Insurance Company is obliged to compile, process, and store data on policyholders, insured means of transportation, accidents and settlement of damages on the basis of compulsory insurance. In performing the activity referred to in paragraph 1 of this Article, the Insurance Company shall organize, keep and maintain a database: 1) on the insured; 2) on means of transportation; 3) on accidents; 4) on damage assessment and settlement. Data referred to in paragraph 2 of this Article shall be compiled, processed, stored and used, in compliance with the law governing the protection of personal data and regulations on the manner of compiling, storing, and submitting the insurance data in the area of insurance, as prescribed by this Law. The Association shall prescribe in detail the content of data referred to in paragraph 2 of this Article, as well as the manner of compiling, storing, and submitting the aforesaid data.
- 5 - Manner of compiling, storing, and using the Insurance Company s database Article 10 The data referred to in Article 9, paragraph 2 of this Law, shall be collected directly from persons the data pertains to or other persons (participants in and witnesses of an accident). When relevant records referred to in paragraph 1 hereof are kept by internal affairs bodies, judicial entities, corresponding health, retirement and disability insurance funds, healthcare institutions and social services institutions, data shall be compiled from these entities and organizations. Bodies, organizations and individuals possessing data or databases referred to paragraph 1 of this Article are required to deliver such data to the Insurance Company upon request. Data referred to in paragraph 1 of this Article shall be kept for ten years after the termination of the Insurance Contract, and/or after claim payment proceedings are concluded. Data referred to in paragraph 1 of this Article can be used, free of charge, by the claimant as well, at the time of filing the claim to an Insurance Company. Exemptions from Compulsory Insurance Article 11 The provisions hereof shall not apply to the means of transportation of the Serbian Armed Forces. Application of the Provisions of the Insurance Law Article 12 The provisions of the law governing the insurance industry shall apply to the process of establishing, operating and supervising the Insurance Companies (hereinafter: Insurance Law) unless otherwise provided herein. Applicability of other laws Article 13 The law on contracts and torts and other relevant laws governing the contracts on specific classes of insurance shall apply to the contracts on compulsory insurance, unless otherwise provided herein for specific issues. II. ACCIDENT INSURANCE PROVIDED FOR PASSENGERS IN PUBLIC TRANSPORT Obligation to provide accident insurance for passengers in public transport Article 14 Owners of means of transportation used for public transport of passengers shall be required to enter into contracts providing accident insurance for passengers in public transport.
- 6 - The contract referred to in paragraph 1 herein shall be entered into by owners of: 1) Buses for public transport used for public transport on municipal, intercity and international lines and special services; 2) Buses used for staff transport to work and back; 3) Buses used for transport of children and students to kindergartens and schools; 4) Buses used for transport of tourists; 5) Passenger taxis and rented vehicles; 6) Rail vehicles for passenger transport; 7) All types of vessels used for transport of passengers on regular or extraordinary services, including those for cruises and transport of tourists; 8) All types of rented vessels referred to in item 7) hereof; 9) Aircraft for public passenger air transport (regular, charter flights and air taxi); 10) Tourist aircraft used for shorter flights and sightseeing flights, and rented aircraft; 11) Other means of transportation, irrespective of their propulsion, used for passenger transport against the fare charged, in the form of a registered business. The insurance contract referred to in paragraph 1 does not exclude the obligation of closing liability insurance contracts. Licenses for utilization in of the means of transportation in the public transport, and/or other document of the authorized body which serves as evidence of ability of the vehicle to be used in the public transport referred to in paragraph two hereof, shall be issued upon submission of evidence to the authorized body on concluded insurance contract from paragraph 1 hereof. The owner of the means of transportation referred to in paragraph 2 hereof, shall clearly present data on concluded contract from paragraph 1 hereof on visible position in the vehicle and on the ticket, primarily showing the name of the insurer and the rights of passengers according to the contract. Definition of passengers in public transport Article 15 For the purposes hereof, passengers in public transport shall mean: 1) Persons being in the means of transportation used for public transport who intend to travel, whether they have bought a ticket or not; 2) Persons being within the grounds of a station, pier, port, airport or close to the means of transportation prior to boarding who intend to travel; 3) Persons who have ended their trips and left the means of transportation, and are close to the means of transportation being within the grounds of a station, pier, port, or airport. The passengers referred to in paragraph one hereof shall also include the persons entitled to travel free-of-charge.
- 7 - The passengers referred to in paragraph one hereof shall not include any persons whose job involves their presence in the means of transportation. Amount of the sum insured Article 16 The amount of the minimum sum insured of the contracted accident insurance for passengers in public transport shall be established by the Government, upon the proposal of the National Bank of Serbia, per passenger: The insured sum from the paragraph 1 hereof may not be lower than: 1) in the event of death of a passenger 8,000 euros 2) In case of passenger s permanent loss of general working ability (invalidity) 16,000 euros 3) in the event of temporary inability to work and actual and necessary medical treatment cost for the passenger 4,000 euros The decision referred to in paragraph 1 herein shall be published in the Official Gazette of the Republic of Serbia. Right to the payment of the insured sum Article 17 The passenger affected by accident, or the payee specified by the terms of insurance in case of such passenger's death, shall be entitled to request direct payment to be made under the insurance contract by the Insurance Company with which the insurance has been contracted as provided by Article 14, paragraph 1 hereof. In cases where an accident occurs, whereas the insurance has not been contracted by the owner of the means of transportation, as provided by Article 14, paragraph one hereof, or such owner has contracted the insurance with the Insurance Company in respect of which bankruptcy proceedings were initiated, the person referred to in paragraph one hereof may request the payment of the insured sum to be provided from the Guarantee Fund subject to the provisions of this Law. The passenger or the insurance payee shall be entitled to the insured sum referred to in Article 16 hereof irrespective of whether such passenger or payee is entitled to be paid damages against the carrier's liability. III. MOTOR THIRD PARTY LIABILITY INSURANCE FOR OWNERS OF MOTOR VEHICLES 1. Contract on motor third party liability insurance and its effect Obligation to provide motor third party liability insurance Article 18 Owners of motor vehicles shall be required to enter into contracts providing insurance against liability for damage caused to third parties by using motor vehicles resulting from death, injury, affected health, destroyed or damaged goods, excluding the damage caused to any goods taken to be transported (hereinafter referred to as the motor third party liability insurance ).
- 8 - Notwithstanding the provision of paragraph one hereof, the owner of motor vehicles is covered by motor third party liability insurance for the damage caused to the goods taken to be transported provided that such things are personal belongings of persons being in such vehicles. The damage referred to in paragraph one hereof shall also include damage caused to third parties by goods falling off motor vehicles. Motor third party liability insurance contract insurance policy Article 19 The motor third party liability insurance contract insurance policy shall be uniform for the territory of the Republic of Serbia. The contents of the insurance policy referred to in paragraph one hereof and the manner of keeping records of issued policies shall be prescribed by the National Bank of Serbia. The form of the insurance policy from paragraph 1 hereof shall be printed by the National Bank of Serbia- the Banknotes and Coins Printing Office. Closing a motor third party liability insurance contract and registration of a vehicle Article 20 The owner of the motor vehicle, whose vehicle is subject to registration shall, at the moment of registration, extending registration or obtaining temporary plates, provide the evidence on concluded motor third party liability insurance contract, to the body authorized for registration. The owner of the motor vehicle whose vehicle is not subject to annual registration shall be required to enter into the contract on motor third party liability insurance at the time they obtain the respective licenses to use such vehicles, and to renew the insurance during the time the vehicle is being used. Persons not entitled to claim for damages Article 21 The following persons shall not be entitled to claim for damages under the motor third party liability insurance: 1) Owner of the motor vehicle whose usage caused him damage, for damaged objects; 2) A driver of the motor vehicle whose usage caused him damage; 3) Person entering into the vehicle at their own free will and the vehicle being the one the use of which caused damage to the person, such persons being aware that the vehicle had been illegally taken away; 4) Persons affected by damage: (1) Caused by motor vehicles used during officially approved automobile and go-kart racing or parts of such competition on closed race-tracks, aimed at developing maximum speed, as well as during the tests (trainings) for such racing; (2) Due to the impact of nuclear energy during transport of nuclear material;
- 9 - (3) Caused by military operations, military maneuvers, riots, or acts of terrorism provided that any cause-and-effect relationship exists between such actions and the damage occurred. Amount of the Sum Insured Article 22 The lowest amount of the sum insured for which motor third party liability insurance can be contracted shall be established by the Government upon the proposal of the NBS. The amount from the paragraph 1 hereof may not be lower than: 1) For damage to persons, caused by single event of damage, regardless of the number of damaged persons 1,000,000 euros 2) For damage to objects, caused by single event of damage regardless of the number of damaged persons 200,000 euros. Other lowest insured sums for which the insurance contracts may be concluded, defined in criteria in the Article 26 for compensation of damages on persons shall be established by the Government, upon the proposal of the NBS. In cases where there is more than one claimant, and the total compensation of damages exceed the amounts referred to in paragraph 1 hereof, the rights to which the claimants are entitled against the Insurance Company shall be reduced pro rata to the amount in that article. The decision referred to in paragraph 1 herein shall be published in the Official Gazette of the Republic of Serbia. Notification on traffic accident Article 23 The owner of the vehicle, and/or a person involved in traffic accident, is obliged to notify the insurance company with which the vehicle is insured about the accident within 15 days from the day the accident occurred. Request for damage compensation and the right to file a lawsuit Article 24 The claimant submits motor third party liability insurance contract claim by the presentation of claim directly to the insurance company. The claimant can present a claim to the insurance company the claimant has concluded the motor third party liability insurance contract with, if such possibility is provided in that contract, and if it is in accordance with business policy of the insurance company. Should the insurance company fail to submit the justified offer for compensation of the damage, and/or the notification referred to in Article 25 paragraph 5 of this law within 90 days from the day of claim receipt, and/or should the insurance company fail to pay the small claim within the deadline referred to in Article 27 hereof, the claimant may file a lawsuit against the company in the court and notify the NBS about such proceedings.
- 10 - The insurance company shall enter the claim referred to in paragraph one hereof into a special register of claims on the day such claim is received, in order of receipt. In case of compensation based on the request from paragraph 2 of this article, the insurance company which has paid damages has the right to recourse from the insurance company from the insurance company whose insured is liable for the damage. Procedure and deadlines for deciding on requests for damage compensation Article 25 The insurance company shall determine the basis and the amount of the claim within 14 days as of being presented the claim, and shall deliver the justified offer for compensation to the claimant and shall settle the claim. In cases where the claim presented is incomplete, the insurance company shall address the claimant thereof in writing within 8 days after such claim was presented and request the documentation to be completed. Notwithstanding the paragraph 1 herein, if within the deadline of 14 since receiving the claim it is not possible to determine the basis and the amount of that claim, the insurance company shall determine them within the deadline of 45 days in case of goods suffering damage, and within 90 days in case of persons suffering damage, and deliver the justified offer for compensation, and settle the claim within the next deadline of 14 days. In case where the offered amount of claim from paragraphs 1 and 3 herein is lower than the amount presented by the claimant, the insurance company shall be required to offer and execute the payment of undisputed portion of its obligation to the claimant as an advance payment within the deadlines defined in these paragraphs. The acceptance of this undisputable portion of compensation by the claimant does not cause any reduction of his rights to claim the disputed amount of compensation. In cases where the insurance company assesses that no grounds exist for compensation, it shall notify the claimant in writing thereof, including the respective justification, within 8 days from the assessment, and in accordance with the deadlines for deciding on the claim presented as set forth in paragraphs 1 and 3 herein. Compensations to persons suffering damage Article 26 The amounts of compensations to persons suffering damage are established by the insurance companies applying the prescribed criteria for compensation. The Government regulates the manner and criteria for the assessment of material damage and the manner and criteria for the assessment of non-material damage, depending on the gravity of bodily injury or affected health, and/or depending on the degree of partial disability for work, as well as the persons entitled to compensation and maximum compensation for pain and suffering due to death or serious disability of another person.
- 11 - Compensation of small claims Article 27 The claims less than 1,000 euros worth in RSD, and which are accompanied with the evidence which can serve as a basis to establish the obligation of the insurance company, are called small claims. The Insurance Companies are required to pay the compensation from paragraph 1 hereof within the deadline of 8 days after the receipt of the claim for compensation. The insurance company shall pay the compensation for the damage within the deadline referred to in paragraph 2 hereof in the case the company establishes that the claim is 1,000 euros worth during the claim assessment procedure, although the claim was not labeled as the claim referred to in paragraph 1 hereof. Objection and subrogation of the insurance company Article 28 When a claimant submits the compensation claim, the Insurance Company cannot state objections in its reply to such claim which the Insurance Company could state toward the claimant due to violation of law or contract and based on the law or contract. The Insurance Company which has paid a compensation to the claimant shall be entitled to the right to subrogate against the person liable for damage up to the amount of paid compensation, interest on such paid compensation, and the costs of proceedings, unless the obligation of the Insurance Company has not taken effect according to the terms of the motor third party liability insurance contract. Compensation of damages in the event of forfeiture of insurance rights Article 29 An insured person shall forfeit their insurance rights in the following instances: 1) if the driver did not use the vehicle for purpose for which it was intended; 2) if the driver did not possess a valid driver s license for the appropriate type or category, except during the driving lessons when a driving candidate was operating the motor vehicle and abiding by all regulations regulating such lessons; 3) If the driver s license was taken away, or the vehicle was removed from the traffic, or the driver has been forbidden to operate the vehicle, or the driver may not use the foreign driver s license in the territory of Republic of Serbia; 4) if the driver has operated the vehicle under the influence of alcohol above the regulated limit, narcotics and illegal medicines or other psychoactive substances; 5) if the driver has caused the damage intentionally; 6) if the damage occurred because the vehicle was significantly technically defective and the driver was aware of this circumstance; 7) If the driver left the location of the accident without providing his/her personal data and insurance data. Deprivation of rights referred in the paragraph 1 hereof does not influence the right of the claimant to compensation.
- 12 - The Insurance Company which has paid compensation to the claimant, as referred to in paragraph 2 hereof, shall be entitled to subrogate against the person liable for damage up to the amount of paid damages, interest paid on such paid compensation and the costs of proceedings. Compensation of the damage caused by unauthorized person Article 30 The motor third party liability insurance shall include, pursuant to this law, also the damages caused by the use of motor vehicle used by, and/or driven by the unauthorized person. The Insurance Company which has paid compensation to the claimant, as referred to in paragraph 1 hereof, shall be entitled to subrogate against the person liable for damage up to the amount of paid damages, interest paid on such paid compensation and the costs of proceedings. European accident report Article 31 In the case of a traffic accident, the participants involved are obliged to complete, sign and exchange European accident reports forms, pursuant to the law regulating the road traffic safety. A correctly completed European accident report form may be used by the claimant or insured party as a claim for compensation of damages on the basis of motor third party liability insurance. An insurance company shall be obliged to deliver a European accident report form to the policy holder along with the motor third party liability insurance policy. While using a vehicle, a driver shall be obliged to be in possession of the European accident report form which he/she must present at the request of an authorized person. The change of owners of motor vehicles Article 32 Should there be a change of the owner of a motor vehicle within the third party liability insurance validity period, the rights and obligations under the contract shall be transferred to the new owner and shall apply until the current insurance period has expired. Territorial validity of motor third party liability insurance Article 33 The motor third party liability insurance shall cover damages occurring in the territory of the EU member states and the territory of International Insurance Card System member states or on the territory of the states whose national insurance bureau is a signatory of the Multilateral Agreement, without payment of the additional insurance premium.
- 13 - Compensation of damages caused abroad Article 34 The responsible insurance company shall cover damages occurring in the territory of the EU member states and the territory of International Insurance Card System member states or on the territory of the states whose national insurance bureau is a signatory of the Multilateral Agreement, up to the amount established by the regulations on motor third party liability insurance of the state in which the damage occurred. Of the lowest insured sum of the state is lower than the amount referred to in the Article 22 of this law, the damage shall be covered up to the amount referred to in that article. If the responsible insurance company from the paragraph 1 hereof does not pay the compensation for the damage, the damage shall be paid by the Association. The Guarantee fund, in accordance with the concluded international agreements, shall be responsible for the damage incurred by a driver of uninsured motor vehicle, usually located in the territory of republic of Serbia, in the territory of EU member states or in the territory of the states whose national insurance bureau is a signatory of Multilateral agreement, or in the territory of the state in which a registration plate serves also as an international certificate of motor third party liability insurance. Expressing recourse claims of legal entities in the field of social insurance Article 35 The legal entities involved in health, disability and retirement insurance may, on account of payments made for their beneficiaries, express recourse claims from the Insurance Companies on the basis of motor third party liability insurance in the amount of real damage, up to the amount of the highest liability of the company in cases where such claims may be made toward the persons liable for damage, according to existing regulations. The real damage referred to in paragraph 1 hereof shall be the costs of medical treatment and other costs caused by medical treatment, as well as adequate amount of pension of the claimant and/or a member of his/her family, which is established as a capitalized amount according to the remaining period of insurance and according to the number of years the person would need to be entitled to old-age pension. 2. Payment of compensation for damages caused by using foreign registration motor vehicles International document on motor third party liability insurance Article 36 A driver entering the territory of the Republic of Serbia by a motor vehicle usually located in a territory of a state whose national insurance bureau is not a signatory of the Multilateral Agreement, shall hold a valid international motor third party liability insurance document which is valid in the territory of the EU, or some other type of document which serves as evidence of such insurance. The international document referred to in the paragraph 1 hereof, for the motor vehicle usually located on the territory of the state whose national insurance
- 14 - bureau is a signatory of the Multilateral Agreement, is replaced by a registration plate. In the case the motor vehicle has been sent from the territory of an EU member state into Republic of Serbia, the risk shall be considered to be located in the Republic of Serbia during the period of 30 days staring from the day of the receipt of the vehicle by the buyer, if the vehicle is not registered in Serbia. Validity of international documents on provided motor third party liability insurance Article 37 International document and evidence referred to in Article 36, paragraph 1hereof shall be understood as a document and evidence recognized as valid by the Association, in accordance with the concluded international agreements. Any payments based on the documents referred to in paragraph one hereof shall be guaranteed by the Association up to the amount referred to in Article 22 hereof. Border insurance Article 38 A driver of a vehicle usually located on a territory of the state whose national insurance bureau is not a signatory of the International Agreement, that does not have a valid international document or evidence showing the existence of motor third party liability insurance referred to in Article 3 hereof, is obliged to conclude a contract for motor third party liability insurance (border insurance) which is valid on the territory of the EU member states, with a validity period equal to the driver s stay in territory of the EU Member Country, which shall not be shorter than 15 days. Legal compliance supervision of the drivers of the motor vehicles with foreign plates from the paragraph 1 hereof and from the Article 36 hereof, shall be performed by the body authorized for internal affairs. When the motor vehicles, usually located on a territory of an EU member state or a third country, enter into the territory of the Republic of Serbia from the territory of the other member state, the body authorized for internal affairs shall supervise the vehicles by non-systematic checking which is not strictly directed towards checking the motor third party liability insurance documents. Payment of compensation for damages caused by using foreign registration motor vehicles Article 39 Persons who suffered any damage caused by motor vehicles with foreign plates, used in the territory of the Republic of Serbia for which there are valid international documents on motor third party liability insurance or some other evidence on insurance, shall submit their damage claims to the Insurance Company which has obtained the authorization of the Association for performing activities on the grounds of the international agreement on the insurance of owners of motor vehicles for damages arising from the use of motor vehicles in the country or abroad. Should the Insurance Company, to which any claims for compensation referred to in paragraph 1 hereof have been submitted, fails to pay compensation within 60 days after such claim has been received, the claimant shall be entitled to submit such compensation claim to the Association.
- 15 - Should the Association fail to pay compensation within 30 days after the claim has been received, the claimant may take legal action against the Association or the Insurance Company referred to in paragraph 1 hereof, and inform the NBS about it. Compensation on the grounds of border insurance Article 40 Compensation for any damages caused by using motor vehicles with foreign plates, provided that the owners of such vehicles have contracted the motor third party liability insurance with the local Insurance Company, shall be paid by such Insurance Company according to the provisions of this Law applicable to the insurance contracted by owners of local registration motor vehicles. Compensation for damages caused by uninsured foreign registration motor vehicles Article 41 Payment of compensation for damages caused by using foreign registration motor vehicles, in cases where the owners of such vehicles have not contracted the motor third party liability insurance, shall be provided by the Guarantee Fund. 3. Compulsory insurance premiums premium system Determining and prescribing compulsory insurance premiums Article 42 The Insurance Company shall calculate the premium for each compulsory insurance premium system tariff group on the basis of the relevant data for each tariff group. The data for calculation of the each tariff group premium consist of the information from the concluded insurance contracts, reported, resolved, paid and reserved claims, costs related to resolving and payment of claims, and other information necessary for risk estimation and premium calculation. The insurance company shall submit the data from paragraph 2 hereof to the Association, within the period prescribed by the Association. The Association shall process the data from paragraph 2 hereof and shall publish them on its web site at least once a year. Bonus-malus System Article 43 An insurance company is obliged to include a bonus-malus system in its premium system and apply it when closing MTPL insurance contracts. The basic criteria of bonus-malus system, the data fro such system application as well as the highest bonus shall be prescribed by the National Bank of Serbia. An insurance company may establish additional criteria which are not contrary to the criteria referred to in the paragraph 2 hereof.
- 16-4. Selling the insurance policies and insurance company business operations Article 44 Motor third party liability insurance policies, apart from the persons referred to in the Insurance Law, may be also sold by legal entities authorized for motor vehicle inspection in accordance with regulations on traffic safety (hereinafter: motor vehicle inspection). The sale of compulsory insurance policies by motor vehicle inspection stations shall not be considered as agency activities in insurance, as defined in the Insurance Law. The sale of compulsory insurance policies by motor vehicle inspection stations shall be performed only by the staff of the station authorized for the insurance agency activities according to the insurance Law. The insurance company and motor vehicle inspection station, and their related parties, apart from the contracts on compulsory insurance policies sale, shall not conclude agreements on premises lease or perform other legal activities which are the source of income for the inspection station from the funds of the insurance company, or its related party. The inspection station shall not be entitled to charge the insurance premium. Article 45 The management loading in motor third party liability insurance may be up to 23% of gross premium of such insurance. Motor third party liability insurance execution costs, including the insurance acquisition costs, shall not be higher than management loading referred to in the paragraph 1 hereof, and the commission for compulsory insurance policies sale shall not exceed 5% of the gross premium of such insurance. The insurance company in its financial report shall provide a comparative overview of profit and/or surplus and loss and/or deficit for performance of motor third party liability insurance activities. The insurance company shall keep 1.2% of gross motor third party liability insurance premium as a reserve and shall quarterly deposit in a special account intended for introduction, functioning and improvement of the system for surveillance, control and regulation of traffic- video surveillance of the roads. The obligation of the insurance companies from the paragraph 4 hereof shall be valid for five years. The funds referred to in the paragraph 4 hereof shall be used in accordance with the law regulating the road and traffic safety. 5. Special provisions on realization of motor third party liability insurance 1) Authorized representative for deciding on the claim Article 46 The authorized representative for deciding on the claim on the basis of motor third party liability insurance (hereinafter referred to as: authorized representative) shall be a person that on behalf of and for the account of the liable insurer collects information, undertakes measures necessary for making decisions about the claim
- 17 - and in the country of permanent residence of the injured party carries out the appropriate payment of damages in the case of claims caused by a traffic accident in a EU member state which is not be the country of permanent residence of the claimant, and/or in third countries whose national insurer s bureau is a member of the International insurance card system, in the case the damage is caused by use of a motor vehicle insured and usually located in one of the EU member states, different from the country of permanent residence of the claimant. The authorized representative must have all necessary powers to represent the insurance company in relation to claimant and government bodies and must have registered offices or residency in that country. The authorized representative must be trained for processing the damage claims in the official language of the country for which he/she has been appointed. The authorized representative may work for one or more insurance companies. Notwithstanding the provisions of paragraph 1 hereof, the injured party has the right to direct realization of an indemnity claim in regards to the person responsible for the accident or the liable insurance company. Legal entities referred to in Article 35 hereof and other legal entities to which, on the basis of this law, the right to compensation of the injured party has been transferred, shall not have the right to realize indemnity claims from an authorized representative. Article 47 An insurance company carrying out activities of motor third party liability insurance in the territory of the Republic of Serbia shall be obliged to appoint authorized representatives in all the EU member states. The insurance company, by means of the Information Center referred to in the Article 50 of this law, shall inform the information centers of other EU Member States of the names and addresses of the authorized representatives referred to in the paragraph 1 hereof. Article 48 The appointment of authorized representatives in The EU member states shall not influence the substantive law applied in the procession of indemnity claims nor shall it alter court jurisdiction. Article 49 The liable insurance company or its authorized representative shall, within three months of the date the claim submission, submit to the claimant the following: 1) a justified offer for compensation of damages insofar as liability for compensation of damages and the amount of damages are not disputable. 2) a justified reply insofar as liability for compensation of damages and the amount of damages are not disputable. If the liable insurer or its authorized representative from paragraph 1 hereof misses the stipulated deadline and does not deliver to the claimant a justified offer for compensation of damages or justified reply, the claimant may file a lawsuit against the liable insurer in the place of his/her residence.
- 18 - The National Bank of Serbia shall notify the competent supervisory body of the EU member state in the case the liable insurer or its claims representative breaches the provisions of paragraph 1 hereof. 2) Information Center Article 50 The Information Center shall be established within the Association for the purpose of ensuring efficient realization of indemnity claims caused by the usage of motor vehicles. The Information Center shall: 1) collect data relevant for the indemnity claims realization and keep a register of the data, 2) enable access to the data referred to in item 1 hereof, 3) offer assistance to claimants when gathering data from the register referred to in item 1) of this paragraph, and the data from the registers of the information centers of other EU member states. The Register referred to in paragraph 2, item 1) of this Article shall contain the following data: 1) registration markings, types, brands and the types and numbers of chassis of motor vehicles registered in the Republic of Serbia, 2) Motor third party liability insurance policies numbers for motor vehicles under item 1) hereof; 3) Duration of the insurance coverage on the basis of the motor third party liability insurance contracts; 4) Business names and registered offices of insurance companies offering insurance coverage on the basis of insurance contracts referred to in item 3) of this paragraph, 5) name and surname, date of birth, residence and/or head office location of the insured party, 6) names and addresses or registered offices of the authorized representatives appointed by an insurance company from the Republic of Serbia in other EU member states, 7) a list of vehicle owners in the Republic of Serbia exempt from the obligation of motor third party liability insurance. Data from paragraph 3 of this Article shall be collected form the insurance companies and from the records of registered vehicles in the Republic of Serbia. At the request of the injured party referred to in paragraph 3 of this Article, the Association shall also request data from the registers of information centers of the other EU member states. An insurance company and body authorized for keeping records of registered motor vehicles in the Republic of Serbia are obliged to regularly forward data referred to in paragraph 3 of this Article to the Association. The data referred to in Article 3 items 1) to 5) hereof shall be kept on file by the Information Center for not less than ten years after the deregistration of a motor vehicle or after the insurance policy has expired.
- 19 - In providing assistance with collecting of data referred to in paragraph 2, item 3) hereof, the Information Center shall cooperate with information centers of The EU member states. Article 51 The Information Center shall be obliged to enable, without delay, access to the following data contained within its registers or registers of information centers of the EU member states to claimants for ten years following a traffic accident: 1) - Business name and head office of the responsible Insurance Company 2) the number of the insurance policy referred to in the item 1) hereof 3) Name and surname and/or business name and head office address or the address of the authorized representative in the Republic of Serbia, appointed by the responsible insurance company. Upon the request of the claimant, the Information Center shall collect data on the name and surname and/or business name and registered office address, including the address of the owner, the usual driver or registered user of the motor vehicle if the claimant has a legitimate legal interest in obtaining such information. The Information Center shall collect the data from insurance companies and from bodies authorized for motor vehicle registration. Upon the request of the claimant, the Information Center shall collect data on the name and surname and/or business name and registered office address of the person liable for the damage caused by the motor vehicle exempt from the obligation of concluding a motor vehicle third party liability insurance contract. Article 52 The Information Center must enable access to and use of data in accordance with this law to all claimants and other participants of a traffic accident. Processing, storage, providing access and use of data which are by their nature personal data, must be carried out in accordance with the provisions of Article 9, paragraph 3 hereof. 3) Claims Compensation Bureau Article 53 Claims compensation bureau shall be established within the Association. The claimants with permanent residence in the Republic of Serbia may submit a claim for compensation of damages to the Compensation Bureau for compensation if the traffic accident is caused in other EU member state or in a third country whose national insurer s bureau is a member of the International insurance card system, and has been caused by a motor vehicle insured and/or normally based in other EU member state. The Claims compensation bureau is accountable only in exceptional instances where the liable insurer and/or its authorized representative did not fulfill their obligations as stipulated by this law. The claimant referred to in paragraph 2 hereof may present his/her indemnity claim to the Claim compensation bureau if: 1) within three months from the date the claimant filed the indemnity claim to the liable insurer or its authorized representative, and the liable insurer or its authorized representative have not proceeded in accordance with Article 49 hereof,