On 20 December 2023, the House of Representatives passed a pivotal legislative amendment, Law Number 167(I) of 2023, bringing significant changes to the legal framework governing the Motor Vehicles' Third Party Liability Insurance Laws of 2000-2021.
In line with the efforts towards harmonisation with the European Union, this initiative is driven by the need for alignment with the European Union's Directive (EU) 2021/2118, dated 24 November 2021, which amends Directive 2009/103/EC related to insurance against civil liability concerning the use of motor vehicles and the enforcement of the obligation to insure against such liability.These amendments aim to fortify the regulatory structure and improve the efficiency of the Insurers' Fund.
The Amendment and its Significance:
1. Cooperation Empowerment (Article 29A): Law 167(I) of 2023 grants the Motor Insurer's Fund of Cyprus (MIF) expanded powers to engage in timely cooperation with similar organisations in other Member States and other relevant parties during insolvency procedures. The amendment ensures a more coordinated and efficient approach to proceedings.
2. Compensation Procedure Enhancement (Article 32): The amendment introduces a refined procedure for the payment of compensation by the MIF. Key aspects include:
3. Right to Recover Compensation (Article 32A): The new Article 32A introduces the right of the Insurers' Fund to seek recovery from bodies in the insurer's home Member State, coupled with subrogation to the rights of the injured party against the responsible party or insurer.
Conclusion: The amendments introduced by Law 167(I) of 2023 signify a crucial step in fortifying the regulatory framework related to the Motor Vehicles' Third Party Liability Insurance. While the legislative amendment was passed on 20 December 2023, upon publication in the Official Gazette of the Republic of Cyprus, it is important to note that the provisions of paragraph (b) of subsection (2) and subsections (3) and (4) of section 20A shall come into force on the later of the following dates; 23 April 2024 or on the date of application of the implementing act of the European Commission referred to in the sixth paragraph of Article 16 of Directive 2009/103/EC. By enhancing cooperation powers and clarifying compensation procedures, these amendments contribute to a transparent, efficient, and cross-border compatible system.