On November 1, 2023, in accordance with the Law on Compulsory Traffic Insurance, a gradual and phased deregulation of the MTPL insurance sector in the Federation of Bosnia and Herzegovina (FBiH) will come into effect, insurance companies gaining the right to apply their own MTPL tariffs with prior approval from the market authority, the Insurance Supervision Agency of the FBiH (NADOS) announced.

The premium rate for motor liability insurance in the Federation of Bosnia and Herzegovina (FBiH) was administratively determined in accordance with the Law on Compulsory Traffic Insurance until October 31, 2023, through a secondary regulation act issued by the Expert Council of the Insurance Supervision Agency of the FBiH.

The phase of deregulation aims to prepare insurance companies/the insurance market for complete liberalization, in view of the country’s EU accession which requires full compliance with EU Directives.

Bosnia and Herzegovina, through the Stabilization and Association Agreement, committed to implementing structural reforms to achieve a gradual harmonization of regulations with the European legal acquis. One of the obligations is the establishment and free determination of premium rates for MTPL insurance.

Motor liability insurance constitutes 59% of the non-life insurance portfolio in the FBiH market, with over half a million entities holding at least one MTPL insurance policy.

One should note that the two main administrative entities of Bosnia and Herzegovina, Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) have different supervising authorities and are subjected to different legal provisions. AZOBiH - the Insurance Agency for the entire country, has not any regulatory power over the two separate entities. For the time being, MTPL prices in the RS market are still state controlled.