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When the insurance fails?

When the insurance fails?

At this interval it’s straightforward to search out your self discussing bankrupt insurance coverage (see Novit and Faro); first, let’s begin by clarifying that insurance coverage corporations don’t go bankrupt as occurs with corporations however are put into liquidation. Why does an organization go into liquidation? Liquidation procedures could be of two varieties: voluntary liquidation, if it’s the firm that decides to cease exercising the insurance coverage enterprise, obligatory administrative liquidation, whether it is imposed by Isvap and the Ministry of Financial Improvement following severe financial shortcomings of the corporate or severe violations of the legislation and administrative irregularities.

Impact of liquidation on the insured

It might occur that you’re insured with an organization in liquidation and surprise what is going to turn into of the contracts in progress; two distinctions should subsequently be made:

  • RCA contracts: present contracts proceed to cowl the dangers for the obligatory a part of civil legal responsibility till the expiry of the contract or the time period for which the premium was paid; subsequently if the premium has been cut up as an alternative of an annual one, the protection will likely be efficient till the expiry date of the installment paid after which the coverage ends;
  • non-life contracts: the contracts in opposition to damages stay legitimate till 60th subsequent day the publication of the liquidation measure within the Official Gazette;

RCA claims

In case you undergo an accident with an insured with an organization positioned in obligatory administrative liquidation a territorially competent firm will likely be designated which is able to settle the declare; it should subsequently be paid again to the fund di Assure for Highway Victims managed by Consap for the return of the paid quantities. This recourse to the Highway Victims Assure Fund doesn’t happen if the corporate in liquidation is absorbed by one other firm which at this level may even bear all of the claims originating from the corporate in liquidation supplied that they occurred after the discovery of absorption; in any other case, the quantities will, in any case, be returned to the corporate by the Fund managed by Consap.
The duty of proposing cheap sums and liquidating the quantities of the claims (paid by the Victims of the Highway Assure Fund) is the liquidator appointed by Isvap.

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