RIGA - A Latvian official said last week that the limits of compulsory insurance of civil liability for land transport owners will rise faster than planned once the country becomes a member of the European Union, which is planning to introduce coordinated rules for civil liabilities among all member states.
As a result, insurance prices in EU countries are expected to rise.
According to EU plans, starting in 2005 the minimum compulsory insurance of civil liability for damage caused to an individual will be 1 million euros, while liability for property damage will be 2 million euros, explained the chairman of Latvia's traffic office, Gvido Janevics.
The possibility to choose a minimum limit of 5 million euros for a group of victims is currently under consideration, he added.
Experts at the Ministry of Finance and private insurers pointed out that if the limits were to be implemented too rapidly in Latvia the prices of compulsory insurance of civil liability policies would rise correspondingly.
Janevics said he believed that Latvia should apply for the maximum possible transition period of five years. However, if given a possibility to choose between a smaller limit and a transition period - Latvia should go for a smaller limit.
Regardless, starting May 1, 2004, the limit for damage caused to a person would be 250,000 lats (384,000 euros) per person and to property - 70,000 lats, according to the appropriate EU directive.
Presently Latvian laws maintain that the total liability limit for injuring a person is 10,000 lats, while losses caused to property as a result of a traffic accident amount to 9,000 lats.
Experts said that the parliamentarian commission for European affairs has made calls to initiate negotiations on the EU level to form a Europe-wide budget resources fund from which insurance premiums would be paid to victims (of other EU countries) from those countries that cannot afford to implement the limit prescribed by the EU directive, while citizens of these "poorer" countries would receive smaller premiums.