The Act on Mandatory Contractual Insurance of Responsibility for Damage caused by Opreation of Motor Vehicles

(Act No. 381/2001 Coll. on Mandatory Contractual Insurance of Responsibility for Damage Caused by Operation of Motor Vehicles)

The statutory insurance of responsibility for damage caused by operation of motor vehicles was performed till 1 October 2001 exclusively by Slovenská poisovòa, a.s. As of this date the new Act No. 381/2001 Coll. on mandatory contractual insurance of responsibility for damage caused by operation of motor vehicles (the "Act") came into effect and the monopoly of Slovenská poisovòa, a.s. was cancelled. Starting from 1 January 2002 the statutory contractual insurance (the "Insurance") can be provided also by other insurance companies operating at the Slovak insurance market provided that the insurance companies obtain a permission for this activity from the Office for the Financial Market (the "Office").

According to Section 3 of the Act, a duty to conclude an insurance contract concerning a domestic motor vehicle has a holder of a motor vehicle who is registered in documents of the vehicle as the holder, in other cases, the duty is with an owner of the vehicle or its operator. If a lease agreement with an option to purchase the leased vehicle has been concluded, the duty to conclude the insurance contract is with a lessee. In case of foreign motor vehicles, the duty to conclude the insurance contract is with a driver of motor vehicle. The duty to conclude the insurance contract origins on 1 January 2002. As of 1 January 2002, a person having a duty to conclude the insurance contract is liable to satisfy this duty not later than on the day of the first use of the motor vehicle. As of 1 January 2002, a driver of foreign motor vehicle who enters the territory of the Slovak Republic is liable to conclude so called "frontier insurance" on the moment of entering the territory of the Slovak Republic by this foreign motor vehicle. The frontier insurance is concluded by payment of premium for the entire period of operation of this vehicle in the Slovak territory, however the premium is paid for at least 15 days. The duty to conclude the frontier insurance is considered to be satisfied if the driver holds so called "green card", i.e. international card of insurance of motor vehicle.

Due to the above duties, the maturity date of payment of the premium changes. Under the previously valid legal regulation it was possible to pay the premium for the next calendar year till the end of February of the relevant year. The Act stipulates that the manner of payment of the premium, period of insurance and maturity of payment of the premium are determined by general insurance terms of the given insurance company which are approved by the Office.

The Act stipulates that the minimum premium for the year 2002 shall be in the same amount as the premium for the year 2001. For the years 2003 and 2004, the amount of the minimum premium shall be increased yearly by an average inflation announced by the Statistical Office of the Slovak Republic, alternatively by increase of percentage of yearly losses approved by the Office.

This Act comes in force on 1 October 2001 except certain provisions which come in force on 1 January 2002.

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