The BFSA approves the guidance on the Bonus-Malus system

The Board of the Financial Supervisory Authority has approved the guideline “On the implementation of the Bonus-Malus system in providing internal MTPL”. The guidance sets out the criteria for calculating the universal scheme of the Bonus-Malus system to be applied by all insurance companies offering TPL product in categories B1 (motor vehicles) and B2 (vans,).


The guidance was approved by the Authority Board pending full legal changes with the main aim of protecting the consumer and incorporating well-known European practices into the Albanian insurance market. This, having been verified that in countries where the “Bonus Malus” system is in place, has had effects on reducing the number of accidents, protecting the lives of citizens and guaranteeing a fairer price on TPL insurance policies.


From the social point of view, the application of the Bonus-Malus system aims to raise public awareness of a more car-friendly driving, but also to increase the quality of insurance service to consumers. Technically the process is more transparent and the inclusion of mathematical formulas makes a fair, reliable and merit-based mechanism.


The “Bonus-Malus” system is the mandatory MTPL insurance charging mechanism, where the premium applied depends on the insured’s history of damage / driving experience. This system economically penalizes, by increasing the premium (up to its doubling), the insured responsible for one or more accidents caused / reported during the insurance period. On the other hand, it favors it by lowering the price of the insurance premium (by half) if it has not caused any damage during the period considered.


Based on the guidance adopted by the Authority Board, the background to the implementation of the system begins on 1 April 2019. The final version of the guidance adopted by the FSA Board has included the opinion of all stakeholders. In addition to the damage history (“Bonus-Malus”) other risk factors that directly affect the price of the insurance premium are the territory where the vehicle and its motor power circulate.


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