Guarantee Fund
The Guarantee Fund of the Association of Insurers of Serbia was established in accordance with the Law on Property and Liability Insurance from 1996 and began operations in July 1997. The business of the Guarantee Fund is conducted as a public authorization entrusted to the Association by law.
The funds of the Guarantee Fund for settling obligations and covering the operational costs of the Guarantee Fund, in accordance with the law, are formed from contributions of insurance organizations, allocations from the premiums of compulsory insurance, funds obtained from recourse claims against persons who did not conclude a compulsory insurance contract, and other funds in accordance with the law.
In performing its duties, the Guarantee Fund accepts compensation claims, conducts their assessment and settlement, pays the insured sum or damages, and enforces recourse claims in cases provided by law.
The Guarantee Fund is obligated to pay compensation for damages to the same extent and under the same conditions as if a liability insurance contract had been concluded on the date of the damage, up to the amount that limits the liability of insurance companies according to the law.
The funds of the Guarantee Fund are used to pay the insured sum, or compensation for damages to the injured parties, in the following cases:
1) If the damage is caused by the use of a motor vehicle, aircraft, boat, or another means of transport for which no compulsory insurance contract had been concluded, but such an obligation was established by law.
The obligation of the Guarantee Fund to compensate for damages caused by the driver of an uninsured vehicle is conditional on the following:
• The vehicle that caused the damage is uninsured, and by law, it is classified as a means of transport for which compulsory insurance is required,
• The driver of the uninsured vehicle is responsible for the damage, either fully or partially.
2) If the damage is caused by the use of an unknown motor vehicle, aircraft, or boat resulting in death, bodily injury, or health impairment, as well as damage to property, if a participant in the traffic accident has been compensated for severe bodily injuries requiring hospital treatment, with the injured party’s participation in the damage being 10%, but no more than 500 euros in the dinar equivalent at the time of the accident.
An injured party is not entitled to compensation for vehicle damage from the Guarantee Fund if the damage was caused by an unknown motor vehicle and there were no injured persons requiring hospital treatment (e.g., if the vehicle was damaged by an unknown vehicle in a parking lot).
3) If the damage is caused by the use of a motor vehicle, aircraft, boat, or another means of transport for which a compulsory insurance contract was concluded with an insurance company that is undergoing bankruptcy proceedings.
The Guarantee Fund within the Association of Serbian Insurers was established in accordance with the Law on Property and Personal Insurance of 1996.
The Guarantee Fund started its operations in July 1997. Pursuant to the law, operation of the Guarantee Fund is entrusted to the Association of Serbian Insurers as part of public functions.
In accordance with the law, the Guarantee Fund is comprised of assets created from the contributions of insurance companies for financial protection of passengers and third party claimants. The assets of the Guarantee Fund used to settle liabilities and cover its operating costs are generated by the contributions of insurance companies through allocations from the compulsory insurance premiums and proceeds from recourse claims to persons who have not concluded a contract on compulsory insurance as well as from other sources in line with the law.
The Guarantee Fund within the Association receives claims for compensation, assesses, liquidates and pays the sum insured i.e. compensation of damages, and settles recourse claims relating to the use of Guarantee Fund assets.
The Guarantee Fund is obliged to compensate a claim to the same extent and under the same conditions which would apply if the contract on compulsory insurance had been concluded on the date of the loss event, namely, up to the amount to which liabilities of insurance companies are limited by the law.
Claimants who suffered the loss in a traffic accident shall have the right to compensation of damages paid from the Guarantee Fund in the following cases:
1. damage caused by the use of a motor vehicle, aircraft or other means of transport for which the owner has not concluded the contract on compulsory insurance, despite being obliged to do so according to the provisions of the law;
All means of transport which, under the law, are subject to compulsory insurance against liability in traffic and which do not possess a proper insurance policy are considered uninsured. In case of liability arising from uninsured vehicle, the Guarantee Fund shall pay both material and non-material damages. Upon the payment of damage caused by the use of an uninsured vehicle, the Guarantee Fund shall have the right of recourse against the owner and/or user of the uninsured vehicle.
2. damage caused by the use of an unknown motor vehicle or aircraft;
In case of liability arising from the use of an unknown motor vehicle and aircraft, the Guarantee Fund shall pay damages due to death, bodily injury or impairment of health. The assets of the Guarantee Fund shall not be used to pay compensation for damage on a vehicle caused by the use of an unknown motor vehicle.
3. damage caused by the use of a motor vehicle, aircraft or other means of transport which were insured in insurance companies against which bankruptcy proceedings have been initiated;
In case of liability arising from the use of vehicles insured in the companies against which bankruptcy proceedings have been initiated, the Guarantee Fund shall compensate both material and non-material damage. The liability of the Guarantee Fund depends on the prior completion of the bankruptcy proceedings. The Guarantee Fund shall pay such part of the damage which is not compensated from the bankruptcy estate. Namely, in the event that the damage is not reported, the Guarantee Fund shall pay a part of the damage which would remain uncompensated for if such damage had been reported in the bankruptcy proceedings. Companies against which bankruptcy proceedings have been initiated have claims arising from different types of insurance (MTPL, property, casco), however, the assets of the Guarantee Fund can compensate the damage and/or claim arising from motor third party liability only, and not from the other types of insurance. The Guarantee Fund is liable to compensate the claimants for damages only if the vehicle of the guilty party has been insured in the company against which the bankruptcy but not the liquidation proceedings have been initiated. Namely, if liquidation proceedings are initiated against a company, but bankruptcy proceedings have not been opened, it is understood that this company has sufficient funds to settle all its liabilities. For this reason, the legislator imposed the liability on the Guarantee Fund only for the claims relating to the companies against which bankruptcy proceedings have been initiated, for such part in which the claim is not compensated for from the bankruptcy estate.
The Guarantee Fund pays all its legal obligations in full and on time.
