Companies Ιn Liquidation

 

Procedure governing the submission of claims to the Motor Insurers' Fund (MIF) in case of insolvency of an Insurance Company registered in the Republic of Cyprus and transacting motor insurance business in Cyprus.

 

According to the Motor Vehicles (Third Party Insurance) Law 2000 (Law 96 (I) / 2000) and the provisions of the “Basic Agreement” between the MIF and the Minister of Finance, the MIF is obliged to satisfy all the motor claims that fall under the Compulsory Insurance (against third party), if and when a final Winding-up Order against an Insurance Company is issued as described above.

 

Under Article 31 of the Law, the MIF has the right to appoint the liquidator or one of the liquidators, depending on certain criteria.

 

The MIF has the right to negotiate and settle the claims as soon as its obligation arises, i.e. after the issue of the Winding-up Order and the appointment of the liquidator. All claim settlements are subject to the approval of the liquidator, so that the Fund may later be entitled to be included in the list of creditors of the insolvent company according to Article 31 of the Law. Such approval is usually given very soon after the settlement of each claim.

 

 Any person having a claim, as a result of a road accident, from an insolvent Insurance Company as described above then:

 

   a. In case the claimant has already submitted a claim to the abovementioned company, the Fund will contact the claimant

 

   b. In case the claimant intends to submit a claim to the abovementioned company, the claimant mus contact the Fund to submit the claim.

 

In case of legal representation of the claimant, the submission of the claim can be proved through the lawyer of the claimant.

 

The MIF will then, as soon as possible, negotiate the settlement of the claim either directly with the claimant or with his/her lawyer and the MIF will submit a preliminary settlement proposal, which as mentioned above is subject to the approval of the Liquidator. We point out that no interest is payable for Court judgements after the issue of the Winding-up Order.

 

In any case, the claimant must fully cooperate with the MIF and provide any additional information requested and / or take all reasonable steps to protect the MIF's interests.

 

A possible out-of-court settlement of the claim entails the signing of a form which completely releases the MIF, the insolvent company, the liquidator and  the person involved in the accident of any possible liability which has arisen or may  arise in the future and at the same time all the rights of the signatory are assigned to the MIF.



It is pointed out that this procedure does not apply to vehicles insured by an Insurance Company established in Cyprus which is insolvent and operates outside Cyprus under Freedom of Establishment(FOE) or Freedom of Services(FOS). For these vehicles, there is a separate procedure emanating from International Agreements to which the Fund is a signatory.