Mandatory insurance - also for legal persons
 The mandatory insurance program should also be extended to companies, according to an amendment proposal of the mandatory household insurance law, launched in ICAR - the International CAtastrophic Risk Forum 2009, by Radu MANOLIU, Deputy General Manager, CREDIT Europe Asigurari. The proposal starts from the assumption of a catastrophic event, an earthquake of large magnitude, for example, a case in which the activity of a large number of legal entities would cease, leading to an indefinite loss of revenues.
"At first glance, the idea of including legal entities in the field of aplicability of the concept of mandatory insurance against earthquakes, landslides and flooding may seem lacking the necessary part of social protection, to render political feasibility. But, following a catastrophic earthquake, damages registered for buildings belonging to legal persons would generate the suspension of a big part of the activities and, thus, at least temporary loss of most sources of income", Radu MANOLIU said for XPRIMM Newsletters.
"Regarding the economic side that we ought to have in view, I am emphasizing that the probability of obtaining the profit as a result of administration of such a portfolio would be much higher than in the case of the dwellings, especially if it would be accepted that the insured amounts for legal persons coincide with the accounting values of properties in question. Moreover, in the case of accepting the accounting values of properties as insured sums, the project could only reffer to the risk of earthquake, the only one that could generate social disastrous effects, and it would still be, I believe, feasible in all respects", the Deputy General Manager of CREDIT Europe Asigurari added.
Currently, the AOL law only provides mandatory household insurance for body persons, households owners, and it will be applicable from July next year.
Author: Oana RADU
on 19.10.2009
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