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Armenian Car Insurers Pay Out Less Than Quarter of Premium Funds


Armenia -- Traffic police investigate a car collision in Yerevan, 11Jan2011.

Armenia -- Traffic police investigate a car collision in Yerevan, 11Jan2011.

Armenian insurance companies have reported a nearly 22 percent payout of premium funds to cover the costs of damages incurred by some 14,000 car owners in road accidents since the introduction of mandatory car insurance at the beginning of this year.

Vahan Avetisian, who heads the Car Insurers Bureau, presented the relevant statistics at Monday’s hearings held by the National Assembly’s Standing Committee on Finance and Budgetary Issues. In particular, the official reported that a total of 2 billion, 840 million drams (about $7.6 million) have been paid to policyholders during the first eight months of this year, whereas a sum of more than 13 billion drams (about $35 million) had been collected as insurance premiums from 400,000 or so motorists. (An average car owner in Armenia had to pay a sum equivalent to between $70 and $85 to get an annual insurance coverage from one of eight insurance companies offering such policies).

Speaking at the hearings, Avetisian expressed his conviction that the scheme that has been criticized by Armenia’s political opposition and taken skeptically by many drivers has “proved its value”.

“No unpredictable problems have emerged. The fact that the initial tension that existed in society [over mandatory car insurance] has essentially eased proves this,” said the official, adding that the number of complaints and grievances received by the Bureau or the Financial Ombudsman over car insurance is “very small”.

Meanwhile, member of the parliamentary faction of the Armenian Revolutionary Federation (Dashnaktsutyun) Artsvik Minasian criticized insurance companies for “showing no tendency” towards slashing insurance premiums for car owners based on the statistics unveiled by the Car Insurers Bureau head.

“The Bureau seems to be more representing the interests of insurance companies, and in this case insurance companies are not interested in receiving lower profits,” Minasian told RFE/RL’s Armenian service (Azatutyun.am).

Head of the Achilles motorist rights advocacy center Eduard Hovannisian confirmed the low number of complaints received from car owners regarding insurance payouts, but instead made a critical assessment of the work of the road police in dealing with car accidents. He said their later arrivals cause huge traffic congestions and discontent of both drivers and passengers.

“They are late in reaching the scene. When we asked them to provide explanations, they say they do not have enough personnel [for that amount of work]. Why is it so? It is because the law does not specify the time limit for the traffic police to arrive at a car accident scene,” Hovannisian told RFE/RL’s Armenian service (Azatutyun.am).
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