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Life in Kosovo investigates insurance companies

04 02 2010  Life in Kosovo broadcast a report by BIRN journalist Jeta Abazi on how insurance companies operate in the country.

The main questions covered were: How are insurance companies regulated in Kosovo? Is there a law on insurance? Do companies meet their obligations to injured parties? What do representatives of these companies and affected parties have to say?

Having no law on vehicle insurance safety outside of an UNMIK policy from 2001, Kosovo’s citizens are severely affected by ineffective insurance companies.

Only 30% of all damages caused by vehicles in Kosovo have been covered by insurance companies.

All the lawyers contacted claimed that insurance companies do not respond to requests. Sadri Ferati, a lawyer, specifically mentioned cases involving the ‘Dardania’  insurance company, which are rarely settled “due to the company’s lack of professionalism and inefficiency”.

Despite the fact that a court order has been issued to this company to pay for a specific incident, Mr Ferati claimed that they have not taken this seriously.

A case from Gjilan involving the ‘Insig’ insurance company was then brought up. Representatives of the company have refused to talk in front of the media about cases, and have refused to pay.

Specifically, Insig’s Senior Vice-President, Dijana Dajaku, and the company’s accidents specialist, Aferdita Berisha, were not able to provide comment without special permission from their headquarters in Albania.

Ali Kryezi, an insurance lawyer, said that the case of Arber Hoxhaj highlights the problems with the ‘Siguria’ insurance company.

Mr Hoxhaj was left disabled due to a problem that arose while he was donating blood to assist after the Gerdec tragedy in Albania.

Mr Hoxhaj has since paid hundreds of thousands of euro, yet Siguria have paid out only a small amount of the compensation he was due.

Siguria’s director, Rrahim Pacolli, gave an interview about his company and Mr Hoxhaj’s case.

Mr Pacolli said that he would personally pay compensation to Mr Hoxhaj, but as he did not know the details of the case, he promised to ensure that Siguria’s legal department would review the case within ten days.

A few days after the broadcast of the show, Mr Hoxhaj’s lawyer informed BIRN that Siguria had signed an agreement to pay the total amount owed to his client.

Arber Mikeli, director of the Association of Insurance Companies from Kosovo, said that responsibility for the dysfunction in the insurance industry lies with the companies themselves, and with the Central Bank, which has an oversight body.

However, arbitration and, as a last resort, the courts should also function effectively in order for cases to be settled as soon as possible, Mikeli said.

He added “the insurance companies together with government representatives and EULEX officials must solve this problem as soon as possible, because Kosovo as a whole loses between €500,000 and €700,000
every year due to car accidents.”

The governor of the Central Bank of Kosovo, Mr Hashim Rexhepi, argued that when cases are brought before courts, “the Bank is stricter, and does not hesitate to take any measures necessary to ensure cases are completely solved”.

Besnik Nikqi, an expert on insurance, suggested that, “if Kosovo only has a department in the Central Bank observing the insurance sector, we can freely conclude that the state is dysfunctional”.

Kosovo’s diaspora also have complaints about the insurance industry, mainly about the imposition of ‘border insurance fees’ when entering Kosovo, due to the non-recognition of European insurance.

Their main complaint was that vehicles with Serbian registrations are not obliged to pay any border insurance according to an UNMIK agreement from 2001, but drivers of other foreign vehicles must.

Governor Rexhepi claimed “vehicles from Serbia that enter Kosovo don’t pay border insurance, and any damage caused by such vehicles are covered by [Kosovo’s] funds.”

Problems as a result of the state of Kosovo’s insurance sector also affect the region, as was shown by the following discussion involving representatives of Macedonia’s insurance field.

Mr Jonce Popovski, the director of the National Insurance Bureau of Macedonia, stated that “until the beginning of 2009, we were not satisfied at all with insurance companies in Kosovo, because the debt they owed to [Macedonian] firm had been increasing, with no damages being paid.

However, due to an initiative by [Kosovo’s] government, by the end of the year this debt was reduced by between €40,000 and €50,000.”

He added that the amount owed in early 2009 had been around €500,000, and if debts continue not to be paid, an agreement signed between Macedonia and Kosovo on third party liability policies, would be terminated.

The director for international damages of Macedonia’s Vardar insurance company, Mira Poptaleska, emphasised that such an agreement can only work if companies from Kosovo show that they are serious and pay what they owe. She also explained that, when Kosovo as a whole had owed €500,000 in insurance to Macedonian companies, around 60% had been owed by Insig.

One conclusion drawn was that, due to the chaos surrounding Kosovo’s insurance companies, citizens should pay extra attention while driving in order to avoid the possibility of spending years demanding money from insurance companies, while also spending large amounts of money paying for insurance and car repairs themselves.

In the ‘Justice in Kosovo’  section of the show, BIRN researcher Argzon Muçaj revealed a report on the safety of judges and prosecutors in Kosovo courts.

‘The Week’s Highlight’ report from BIRN journalist Edona Musa featured Armend Agolli, Kosovo’s only neurosurgeon, who left Sweden to work in Kosovo.

The satirical section ‘Lamjet’  closed Life in Kosovo, reflecting on the events that marked the week.

Life in Kosovo is a co-production between Kosovo Public Television, RTK and the Balkan Investigative Reporting Network, BIRN. It is broadcast every Thursday, starting at 20:20.