About the MIF

MOTOR INSURERS’ FUND OR M.I.F.

Establishment

Following the introduction of Compulsory Motor Third Party Insurance in Cyprus in 1957, many owners or drivers of motor vehicles for various reasons and contrary to the relative Law, continued to use the roads without having a policy of insurance in force. As a result of this situation, their victims remained without compensation and this created a social problem that the Insurance Companies’ Law of 1967, which came into force in 1969, intended to solve through the introduction of a specific provision. Section 55 of the said Law, gave to the Minister of Finance the power to set up, if he wished, a special Fund which would cover such victims. Consequently, the then Minister of Finance, having as a model the Motor Insurers’ Bureau already operating in the U.K, authorized Motor Insurers to set up and operate such a Fund. So, on the 1st February 1969, the Motor Insurers’ Fund was registered by the Registrar of Companies as a company limited by guarantee, just like its U.K model and has as its members all Motor Insurers operating in Cyprus.

Scope

The Motor Insurers’ Fund (M.I.F) is bound to the Minister of Finance by force of an Agreement (known as Principal Agreement) to pay under certain conditions, compensation to third parties in relation to the liability of the drivers of:

(a) Uninsured vehicles

(b) Unknown vehicles, and

Sections 27 to 35 of the Motor (Third Party Liability Insurance) Law (Law 96(I) 2000) are relevant.

The Principal Agreement and the Legislation provide that the Motor Insurers’ Fund will also function as the “Cyprus International Insurance Bureau” as a result of the accession of Cyprus to the Green Card System as from 1st June 1996. As an “International Insurance Bureau” the Fund guarantees the liabilities of its member Companies and generally of the owners of the vehicles with Cypriot registration numbers as regards accidents occurring in Countries which are members of the Green Card System.

In addition, the Fund guarantees in relation to any vehicle that bears registration plates of the Republic of Cyprus that circulates without insurance in any country member of the “Multilateral Agreement”, that any victim will be compensated by the “Cyprus International Insurance Bureau”.

In parallel with the Principal Agreement, there also exists the so called “Internal Agreement” between the Fund and its members. The Internal Agreement provides, among other things, the method of handling claims, the undertaking by Insurance Companies of certain liabilities which are excluded from their policies, the method of settlement of disputes and the method of collecting the premium surcharge.
The Motor Insurers’ Fund is administered by a Board of Directors consisting of 10 persons ie the Chairman, the Deputy Chairman and 8 members. The election of the Directors is carried out annually during the Annual General Meeting. The Chairman and his deputy are elected by the Directors during their first meeting.

The day-to-day work of the Fund is carried out by the Secretariat, consisting of the Secretary/General Manager and other officers employed on a full time basis.

Source of Income

In accordance with paragraph 3 of the Memorandum of the Principal Agreement with the Minister of Finance, the Fund collects a premium surcharge from all policy holders (through their Insurers) which is determined in accordance with the from-time-to-time directions of the Minister of Finance, issued after consultations with the Fund and based on the Fund’s needs.

The percentage of the premium surcharge as from 1st January 2001 until to-day has been fixed at 5%. (until 31/12/2000 was 3%)

The amounts collected by Insurance Companies are remitted to the Fund “within two calendar months from the end of each quarter”. (Internal Agreement, Paragraph 10).

The Fund is planning to change the system of financing currently in force, with that of a fixed amount per vehicle.

Members

The members of the Fund until 31st December 2008 were 26 Insurance Companies, including several Companies operating in Cyprus under “Freedom of Services”.

INSURANCE COMPANIES WRITING MOTOR THIRD PARTY LIABILITY INSURANCE BUSINESS IN CYPRUS (31/12/08)

ALLIANZ GENERAL

INSURANCE CO. S.A
ALPHA INSURANCE LTD.
AMERICAN HOME ASSURANCE CO
ATLANTIC INSURACNE CO LTD.
BRIT INSURANCE CO LTD.
COMMERCIAL GENERAL INSURANCE. LTD
COMMERCIAL VALUE ANONYMOUS INS. CO.
COSMOS INSURANCE CO LTD.
DEMCO INSURANCE LTD.
ETHNIKI GENERAL INSUR. (CYPRUS)
EUROSURE INSURANCE CO LTD.
GAN DIRECT INSURANCE LTD.
GENERAL INSURANCE OF CYPRUS LTD.
HYDRA INSURANCE CO LTD.
INTERLIFE INSURANCE CO LTD.
KENTRIKI INSURANCE CO LTD.
LAIKI INSURANCE CO LTD.
LLOYDS CYPRUS LTD.
MINERVA INSURANCE CO LTD.
OLYMPIC INSURANCE CO LTD.
PANCYPRIAN INSURANCE LTD.
PROGRESSIVE INSURANCE CO LTD.
ROYAL CROWN INSURANCE CO LTD.
TRADEWISE INSURANCE CO. LTD.
TRUST INTERNATIONAL INS. CO. (CYPRUS) LTD.
YDROGIOS INSURANCE CO LTD.

In Cyprus operates also the Cyprus Hire and Rejected Risks Pool, which Insures, on account of all the above Insurance Companies, public service vehicles (taxis, omnibuses and cars for hire (Z)) as well as drivers who are not considered as “acceptable risks” by Insurance Companies.

Operations and amounts paid

From the date of its establishment until the 31st December 2008, the Fund paid a total amount of approximately €56 million (C£33 million) as compensation, the €22 million (C£13 million) of which concerned payments to victims of insurers under liquidation.

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