OCTA cenas tieši no apdrošinātājiem
The Saeima has adopted and the President 
shall announce the following law:

 

LAW ON THE COMPULSORY THIRD PARTY LIABILITY INSURANCE FOR INLAND MOTOR VEHICLE OWNERS

 

Part I. General Terms
Clause 1. Terms used in the Law
Clause 2. Goal of the Law
Part II. Insurance Contract
Clause 3. Subject of the Compulsory Insurance and the Insured
Clause 4. Types of Insurance Contracts
Clause 5. Standard Contract
Clause 6. Complex Contract
Clause 7. Group Agreement
Clause 8. Insurance Contract made on the Border
Clause 9. Contract on the International Compulsory Third Party Liability Insurance (“Green Card”)
Clause 10. Conclusion of the Insurance Contract
Clause 11. Validity Term of the Insurance Contract
Clause 12. Breach of the Insurance Contract prior to its Expiration upon the Initiative of the Insured
Clause 13. Validity of the Insurance Contract in Case the Insurer is under liquidation
Clause 14. Value of the Insurance Premiums
Clause 15. Amount of the Basic Premium Rates
Clause 16. Reduction of the Insurance Premiums
Clause 17. Increase of the Insurance Premiums
Clause 18. Limits for the Insurer’s liability
Clause 19. Liability for the Application of the Vehicle the Third Party Liability of which has not been Insured
Clause 20. Obligations of the Insurer
Part III. Evaluation of Loss and Insurance Indemnity
Clause 21. Loss incurred due to the Road Accident
Clause 22. Loss incurred to the Person
Clause 23. Loss incurred to the Victim due to the Treatment
Clause 24. Loss incurred to the Victim due to the Temporary Disability to Work
Clause 25. Loss incurred to the Victim due to the Constant Loss of Ability of Work
Clause 26. Loss due to the Victim’s Death
Clause 27. Harm caused to the Property
Clause 28. Loss Incurred due to the Damage of the Vehicle
Clause 29. Loss Incurred due to the Destruction of the Vehicle
Clause 30. Loss incurred due to the Damage or Destruction of the Road, Road Constructions and Other Tangible Assets
Clause 31. Damage caused to the Environment
Clause 32. Co-operation between the Traffic Bureau and the Insurers on Expertise
Clause 33. Indemnification of the Loss
Clause 33.1 Indemnification against the loss caused by a trailer (semi-trailer) or other rigid haulage transport vehicle
Clause 34. Cases when Loss shall not be Indemnified
Clause 35. Notification on the Insurance Event
Clause 36. Activities of the Insurer following the Receipt of the Notification on the Insurance Event
Clause 37. Application on the Insurance Indemnity and its Calculation Procedure
Clause 38. Calculation Term of the Insurance Indemnity and the Payment Procedure
Clause 39. Resolution made by the Insurer
Clause 40 Claim of Regression made by the Insurer and the Traffic Bureau
Clause 41. Indemnification of Loss to Foreigners
Part IV. Public Administration in respect of the Compulsory Third Party Liability Insurance
Clause 42. Traffic Bureau
Clause 43. Authority of the Traffic Bureau
Clause 44. Guarantee (Reserve) Fund for the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
Clause 45. Fund for the Interest Protection of the Insured for the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
Clause 46. Measures for the Prevention of Road Accidents
Clause 47. Obligations of the Road Traffic Security Service and the State Technical Supervisions Inspection in respect of the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
Clause 48. Obligations of the Road Police in respect of the Inspection and Control of the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
Clause 49. Obligations by the Border Guards upon performing the Control of the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners when the Vehicle is crossing the Border
Clause 50. Co-operation among the Traffic Bureau, the Road Police, the Road Traffic Security Service, the State Technical Supervisions Inspection and the Insurers in respect of the Information Exchange
Intermediary Terms

 

 
Part I. General Terms
 
Clause 1. Terms used in the Law
The following terms are used in the Law:
1) insurance indemnity – the sum to be paid to indemnify for any loss;
2) insurance event – a road accident upon the occurrence of which the insurance indemnity shall be paid pursuant to this law;
3) insurance contract – the document defining the rights and obligations of the Insurer and the Insured;
4) the Insured – an individual or a legal person having concluded the insurance contract;
5) insurance policy – a standard document issued by the Insurer acknowledging that the Insurer and the Insured have concluded the insurance contract;
6) insurance premium – the payment for the compulsory third party liability insurance for the inland motor vehicle owner or the legal master;
7) the Insurer – the insurance company acting in accordance with the Law On Insurance and having obtained the licence on the performance of the compulsory third party liability insurance for inland motor vehicle owners stipulated in the procedure under the legislative bills;
8) limit of the Insurer’s liability – the maximum to-be-paid amount of the insurance indemnity;
9) insurance term – the term of the insurance contract;
10) the vehicle – in the context of the present law:
a)  any land motor vehicle including trailers or half-trailers involved in the road traffic in the territory of Latvia and registered with the Road Traffic Security Service or the State Technical Supervision Inspection;
b)  public electric transport (except electric railway);
c)  any vehicle registered overseas if it is participating in the road traffic in the territory of Latvia;
11) vehicle owner – in the context of the present law: any individual or a legal person owning the vehicle or on the name of which the respective vehicle has been registered;
12) legal (authorised) user of the vehicle – any individual who not being the owner of the respective vehicle is authorised to use it in the road traffic on the basis of the authorisation letter, rental agreement or any other legal basis;
13) third person – any natural or legal entity who has suffered personal or financial loss resulting from road accident and entitled to insurance indemnification. In the cases stipulated in article 33, part three and four hereof, a third person shall mean the owner or lawful user of the transport vehicle which caused the concerned road accident.
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 2. Goal of the Law
The goal of this law is to regulate the legal relations existing between the inland motor vehicle owners and the Insurers in respect of the compulsory third party liability insurance for inland motor vehicle owners in order to protect the material interests of those suffered in the accidents.
 
Part II. Insurance Contract
 
Clause 3. Subject of the Compulsory Insurance and the Insured
(1) The subject of the compulsory insurance shall be the third party liability of the owner or the authorised user of the motor vehicle (hereinafter referred to as the owner’s third party liability) on the loss incurred during the accident to any third party.
(2) The owner’s third party liability insurance for every motor vehicle involved in the road traffic in the territory of Latvia shall be the responsibility of every motor vehicle owner. Should such vehicle has been passed for use by any other person without concluding the insurance contract on the compulsory third party liability or upon using such vehicle if the term of such prior insurance contract has expired, the insurance contract shall be concluded on behalf of the owner by the legal user of the vehicle. The person using the vehicle for any business or legal purposes shall be released from the obligation to insure such vehicle.
 
Clause 4. Types of Insurance Contracts
(1) There are the following types of the compulsory third party liability insurance contracts for inland motor vehicle owners: standard contract, complex contract, group agreement, insurance contract made on the border, international insurance contract for the compulsory third party liability (hereinafter referred to as the Green Card).
(2) If the transport vehicle has been laid up and is used to cross a border, the final factor to determine the kind of insurance agreement shall be the country at which the vehicle has been last registered; in case of a new vehicle not registered before – the manufacturing country.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 5. Standard Contract
The standard contract shall be considered to be the insurance contract concluded in respect of the vehicles registered in Latvia in accordance with the generally approved procedure on the calculation of the insurance premiums.
 
Clause 6. Complex Contract
(1) Complex insurance contract shall mean an insurance contract concluded with a manufacturer of agricultural products – a farm registered in the due order or the owner thereof, or a statutory agricultural company owning several transport vehicles subject to Transport Vehicle Owners’ Compulsory Third Person Liability Insurance. Such a contract can be made on no more than five transport vehicles only one of which may be a passenger vehicle.
(2) Upon the conclusion of the complex contract the insurance premium shall be collected which according to the calculation procedure in case of the standard contract shall be equal to the insurance premium for the vehicle the insurance premium of which is higher due to the higher level of risk.
(3) The specific condition envisaged in the complex contract shall be as follows: should the person using the vehicle which is subject to the complex contract is unable to present the insurance policy to any of the officials of the Road Police (or any other person authorised to perform such control) it is considered that no insurance contract has been concluded in respect of such vehicle.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 7. Group Agreement
(1) The group agreement shall be considered to be the insurance contract concluded only with those legal persons which are involved in the vehicle sales business.
(2) The group agreement shall apply to the to-be-sold vehicles equipped with the specific number signs issued by the Road Traffic Security Service and which are displaced to the place of sales or storage or are participating in the road traffic in the trial drive made by the customer upon the presence of the sales representative.
(3) Upon the execution of the group agreement the insurance premium shall be collected which according to the calculation procedure in case of the standard contract shall be equal to the insurance premium for the vehicle the insurance premium of which is higher due to the higher level of risk.
 
Clause 8. Insurance Contract made on the Border
The insurance contract made on the border shall be considered to be the insurance contract signed by the owner of the vehicle registered overseas upon crossing the border of Latvia if the owner of such vehicle is unable to present the contract on the international compulsory third party liability insurance (the Green Card) secured by the international covenants and valid in the territory of Latvia.
 
Clause 9. Contract on the International Compulsory Third Party Liability Insurance (“Green Card”)
(1) The international contract on the compulsory third party liability insurance (the “Green Card”) shall be considered to be the insurance contract concluded upon the request made the Insured in respect of the vehicle involved in the road traffic at least in one country where the compulsory third party liability insurance is valid and which is the member state of the Green Card Convention.
(2) The minimum term of the international contract shall be 15 days.
(3) The international contract shall be valid in the countries specified in the policy.
(4) The liability of the Insurer in respect of the Green Card shall be regulated by the international covenants and the legislation of the respective country as well as any other legislative bill which is made known by the Insurer to the Insured upon the request.
 
Clause 10. Conclusion of the Insurance Contract
(1) The Insurers shall conclude the compulsory third party liability insurance contracts for inland motor vehicle owners (standard contract, complex contract, group agreement, insurance contract made on the border as well as the international contract (Green Card) (after Latvia has become the member to the international compulsory third party liability insurance system) in accordance with the provisions of the present law.
(2) The standard policies for the compulsory third party liability insurance for inland motor vehicle owners shall be approved by the Cabinet of Ministers.
 
Clause 11. Validity Term of the Insurance Contract
(1) The insurance contract may be concluded for the period of 15 days up to one year. 
(2) The insurance contract shall become effective on the next day after signing it if not agreed otherwise.
(3) Should it stipulates that the insurance contract becomes effective since the moment it is signed the contract shall specify the hour when it was signed. Should the contract is signed before 12 a.m., the calculation of the final term of the contract shall include the day it was signed, but if the contract is signed at 12 a.m. or later – shall exclude such day from the total calculation.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 12. Breach of the Insurance Contract prior to its Expiration upon the Initiative of the Insured
(1) The contract shall be terminated upon the request of the Insured if one of the following conditions shall apply:
1) sustained illness of the Insured;
2) long-term absence of the Insured;
3) alienation of the vehicle;
4) the vehicle is in the technical condition prohibiting its participation in the road traffic;
5) any other conditions indicating that the vehicle shall not be used in the road traffic;
6) the complex insurance contract policy has been stolen, lost, destroyed or damaged;
7) data stated in the policy are mistaken.
(2) In case of death of the vehicle owner the insurance contract shall be terminated on the basis of the application submitted by his/her heir.
(3) The vehicle owner shall submit to the Insurer the written application on the termination of the insurance contract as well as the insurance policy and the evidence acknowledging the reason for such termination.
(4) Upon termination of contract ahead of schedule the insured shall be entitled
to part of the paid premium equal to:
1) part of premium covering full months from the date of written application until expiry of the insurance contract term; 10 per cent shall be deducted, however, if the contract is terminated due to circumstances stipulated in part one, paragraphs 1 through 5 hereof, o part two, and if no insurance indemnification has been claimed under the concerned contract, as well as if the contract is terminated due to the circumstances stipulated in part one, paragraph 6 hereof;
2) unused part of premium for the remaining period calculated from the date of delivery of the written application provided that the contract is terminated due to the circumstances stipulated in part one, paragraph 7 hereof.
(5) Should the vehicle is alienated and the owner has failed to submit the application on the termination of the insurance contract or its renewal the contract shall be considered to be terminated.
(6) Upon the expiration of the insurance contract concluded by the owner of the vehicle the responsibility of the heirs shall be to conclude a new insurance contract.
(7) Upon liquidation of a transport vehicle owner – a legal entity having a legal successor, or upon change of the legal entity’s name only the contract shall be terminated in accordance with provisions of part four, paragraph 2 hereof, and a new contract shall be made.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 13. Validity of the Insurance Contract in Case the Insurer is under liquidation
(1) If the insurance company having the successor in rights is under the liquidation process the insurance contracts shall remain valid until their expiration.
(2) Should the insurance company is being liquidated according to the resolution passed by its shareholders, the fulfilment of the obligations stipulated in the contracts shall be the responsibility of the liquidation commission or the liquidators.
(3) Should the insurance company is under the liquidation process due to the resolution made by the institutions set in the law, the fulfilment of the obligations stipulated in the compulsory third party liability insurance contracts shall be exercised by the liquidation commission or the liquidators (administrator). The obligations which the insurance company being under liquidation is unable to meet shall be transferred to the Traffic Bureau (Clause 42) and they shall be covered from the cash collected in the Fund for the Interest Protection of the Insured for the compulsory third party liability insurance for inland motor vehicle owners (clause 45). The full execution of these obligations shall be guaranteed by the state budget.
 
Clause 14. Value of the Insurance Premiums
(1) The value of the insurance premium shall be fixed depending on the model, type, ownership (whether the owner of the vehicle is an individual or a company), application (whether or not used for the commercial haulage purposes) and the place of registration of the vehicle as well as observing the basic premiums and rates specified in the present law.
(2) Pursuant to this law the insurance premiums shall be fixed by the Cabinet of Ministers.
 
Clause 15. Amount of the Basic Premium Rates
(1) The price of the basic premium for the passenger vehicles and vehicles having the similar design to those as well as the microbuses where the number of seats excluding the seat for the driver is not exceeding eight seats shall be 31 Lats per year and taking into consideration the full weight of this kind of vehicle the premium value must not exceed the basic premium rate for more than 1,5 times but should such vehicle is used for the commercial haulage – for more than 2 times.
(2) The value of the basic premium for the trucks and vehicles having the similar design to those shall be 55 Lats per year and taking into consideration the full weight of this kind of vehicle the premium value must not exceed the basic premium rate for more than 1,3 times but taking into consideration the kind of application of such vehicles – for more than 2 times.
(3) The value of the basic premium for the buses and vehicles having the similar design to those shall be 45 Lats per year and taking into account the full weight of this kind of vehicle the premium value must not exceed the basic premium rate for more than 1,3 times but taking into consideration the kind of application of such vehicles – for more than 1,9 times.
(4) The value of the basic premium for the motorbikes, motorollers and vehicles having the similar design to those shall be 10 Lats per year and taking into consideration the operational capacity of the engine for this kind of vehicle the premium value must not exceed the basic premium rate for more than 1,5 times.
(5) The value of the basic premium for the tractors and self-powered vehicles shall be 11 Lats per year and taking into consideration the type of the vehicle the premium value must not exceed the basic premium rate for more than 1,7 times.
(6) The value of the basic premium for the trams and trolleybuses shall be 87 Lats per year.
(7) The price of the basic premium for the trailers or the passenger vehicles and vehicles having the similar design to those shall be 5 Lats per year while the price for the trailers of tractors and the self-powered vehicles shall be 7 Lats per year. The price of the basic premium for the trailers intended for trucks and the vehicles having similar design shall be 15 Lats per year and taking into consideration the full weight of this kind of trailer the premium value must not exceed the basic premium rate for more than 6 times.
(8) Taking into consideration the risk level of the traffic and the number of vehicles, the Cabinet of Ministers may fix additional rate – 1,2 which is to be applied to the insurance premiums for the vehicles registered in particular administrative areas.
(9) If the vehicle is registered overseas, the basic premium value shall be 70 Lats per year and taking into consideration the type of the vehicle the premium value must not exceed the basic premium rate for more than 2 times.
(10) The insurance premium rate for the term not exceeding 6 months shall be higher than the premium rate for the corresponding period of one year but in all the other cases – it shall be fixed in proportion to the insurance term.
 
Clause 16. Reduction of the Insurance Premiums
(1) The insurance premium shall be reduced up to 50 percent if the insurance has been valid for the last 12 months before the execution of the contract and during such term the owner or the legal user of the vehicle has not caused any accident using the vehicle specified in the policy as well as he/she has not driven the vehicle being in a state of alcoholic, narcotic, or toxic intoxication.
(2) If not more than one motor vehicle is insured the insurance premium shall be reduced by 40 percent to:
1) 1st and 2nd category handicapped persons;
2) 3rd category handicapped persons having the respective driving licence and suffering from any disturbances in the movement of the body being evidenced by the respective statement issued by the Doctors’ Board for the Health Care and Labour Abilities.
(3) The insurance premium reduction procedure shall be set by the Cabinet of Ministers but the total reduction may not exceed 50 percent of the insurance premium for the respective vehicle.
 
Clause 17. Increase of the Insurance Premiums
(1) The insurance premium shall be increased up to 200 percent if during the last 12 months before the execution of the new contract the owner or the legal user of the vehicle has caused one or more road accidents using the vehicle specified in the insurance policy or during such term he has driven the vehicle being in the state of alcoholic, drug, toxic or any other intoxication.
(2) The insurance premium shall be increased up to 300 percent if during the last calendar year  the owner or the legal user of the vehicle driving in the state of alcoholic, drug, toxic or any other intoxication has caused the road accident to happen.
(3) The insurance premium increase procedure shall be set by the Cabinet of Ministers.
 
Clause 18. Limits for the Insurer’s liability
(1) Further to the compulsory third party liability insurance contracts the Insurers shall cover the loss in the amount of liability fixed by the Cabinet of Ministers.
(2) If the loss is exceeding the fixed limit amount the victim shall be entitled to claim for the proportion of loss exceeding such limitation in accordance with the Civil Law.
 
Clause 19. Liability for the Application of the Vehicle the Third Party Liability of which has not been Insured
(1) Upon using the vehicle in the road traffic the vehicle driver should have the insurance policy acknowledging the presence of the compulsory third party liability insurance for such vehicle.
(2) Using the vehicle the compulsory third party liability of which has not been insured shall be penalised according to the procedure set by the Administrative Violation Code of Latvia.
(3) Fine collected for driving of vehicle without insurance of the owner’s third person liability shall be  allocated to the state budget.
 
Clause 20. Obligations of the Insurer
(1) The Insurer shall be obliged to exercise its obligations against the Insurer.
(2) Pursuant to the procedure set by the Cabinet of Ministers the Insurers shall transfer the payments to the following accounts specified by the Traffic Bureau:
1) the Guarantee (Reserve) Fund for the compulsory third party liability insurance for inland motor vehicle owners (Clause 44);
2) the Fund for the Interest Protection of the Insured for the compulsory third party liability insurance for inland motor vehicle owners (Clause 45);
1) to prevent any road accidents and to perform additional preventive measures;
2) to carry out the business of the Traffic Bureau (Clause 41).
(3) According to the procedure set by the Cabinet of Ministers any information on the insurance contracts obtained by the Insurers shall be reported to the Traffic Bureau, the Road Traffic Security Service and the State Technical Supervision Inspection.
(4) The Insurers shall accept the notifications on the accidents. Should the beneficiary of the application has not insured the compulsory third party liability insurance for inland motor vehicle owner involved in the accident such application shall be passed to the Insurer who has made it or to the Traffic Bureau.
 
Part III. Evaluation of Loss and Insurance Indemnity
 
Clause 21. Loss incurred due to the Road Accident
Upon the occurrence of the insurance event the Insurer under the scope of his liability shall indemnify for the loss caused to the third person, his/her assets or the environment and evaluated in accordance with the procedure set by the present law.
 
Clause 22. Loss incurred to the Person
(1)The loss caused to the health of the third person – the victim who suffered in the accident – shall be considered to be the loss related to:
a) the treatment of the victim;
b) temporary inability to work;
c) constant inability to work;
d) death of the victim.
(2)The victim shall be indemnified in accordance with the scope of the liability of the Insurer.
 
Clause 23. Loss incurred to the Victim due to the Treatment
(1) The loss related to treatment of the victim shall be the costs incurred for transportation to, admission, accommodation, diagnostics, treatment and rehabilitation of the victim at medicinal institutions, nursing of the victim, curative food, rehabilitation at home and prosthetic application.
(2) The costs related to treatment of the victim abroad shall be indemnified provided that the treatment has been coordinated in advance either with the Insurer or the Traffic Bureau.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 24. Loss incurred to the Victim due to the Temporary Disability to Work
The loss incurred to the victim due to the temporary disability to work shall be the income not received by the victim during the disability time evidenced by the hospital. Such loss shall be evaluated as follows:
1) to the employee (the person being in the labour or business relationship with the Employer) – the average remuneration due to such person and calculated according to the rates of the Labour Law of Latvia minus the allocated disability premium and disability allowance;
2) to the self-employed person – the income due to such person calculated as a difference between the taxable income for the prior calendar year (before the accident) and the income received in the calendar year when the person suffered the temporary inability to work minus the price for any social services the victim is entitled to after the damage caused to his/her health and covered from the state social insurance budget.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 25. Loss incurred to the Victim due to the Constant Loss of Ability of Work
(1) The loss incurred to the victim due to the constant loss of ability to work shall be the income not received by the victim and in case of the complete loss of ability to work it shall be calculated in accordance with the clause 24 of the present law but in case of the partial loss of ability to work – shall be the difference on income fixed by deducting the actual income and the social services assigned from the state social insurance budget in the form of money from the loss calculated in accordance with clause 24 of the present law.
(2) The insurance indemnity for the loss incurred due to the constant inability to work shall be paid at least once a month during the time the person is suffering such loss.
(3) If a student of higher education establishment day department is unable to proceed with the studies  in day department due to permanent disability the Insurer or the Traffic Bureau shall pay for studies at a higher education establishment accredited in the Republic of Latvia extra-mural department until the concerned person reaches the age of 24 years.
(4) If a person with permanent disability has the opportunity to master a new profession on single-time basis with the purpose to gain income from work compatible with its current health condition the Insurer or the Traffic Bureau shall pay for the professional education corresponding with the education level of the victim upon the onset of the road accident. The Insurer or the Traffic Bureau shall bear such a costs upon agreement with the victim.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 26. Loss due to the Victim’s Death
(1) The persons who are dependent on the victim and the person who has undertaken to bury him/her shall be entitled to the insurance indemnity due to the victim’s death.
(2) As a result of the victim’s death the following persons shall be entitled to the insurance indemnity:
1) children – until they come of age;
2) widow (widower) unable to work, parents unable to work – until the rehabilitation of their ability to work as well as the able-bodied widow (widower) if there are children in the family at the age up to 8;
3) any other family members who were dependent on such person and who are subject to such status in accordance with the Law On the State Pensions.
(3) The insurance indemnity shall be paid if the victim who suffered in the accident died within a year since the occurrence of such accident and if the forensic medical specialist or the hospital has confirmed that the reason for his/her death was closely related it.
(4) The loss incurred due to the death of the victim to the persons dependent on him/her shall be the income not received by the deceased (Clause 24) due to every dependent minus the pension on the loss of the supporter. The procedure of calculating the indemnity shall be set by the Cabinet of Ministers.
(5) Funeral expenses shall be indemnified against within the limits of the Insurer’s liability upon presenting of the original death certificate.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 27. Harm caused to the Property
1) Harm caused as a result of the accident to the property of the third party shall be considered to be the loss incurred due to:
1) the damage or loss of the vehicle;
2) related to damage or destruction of road, road constructions, building and structures;
3) the damage or destruction of the property owned by the victim;
4) performing the work to rescue the victims suffered in the accident;
5) the damage or staining the vehicle or the inside of the vehicle used to bring the victim to the medical institution;
6) evacuating the vehicles from the place of the accident.
2) The indemnification of the loss to the victim shall be performed in accordance with the liability limit of the Insurer.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 28. Loss Incurred due to the Damage of the Vehicle
The loss incurred due to the damage of the vehicle shall be the expenditure to repair the vehicle including the costs for evacuating it from the place of accident to the residence of the transport vehicle owner of lawful user who has been driving the vehicle at the moment of onset of the road accident, or to the place of repair within the territory of Latvia. Should it be necessary to place the transport vehicle at the nearest parking place for the purpose of reference or for any other reasons, the loss shall also include the expenses incurred from evacuation of the transport vehicle to the parking place and the costs for parking services.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 29. Loss Incurred due to the Destruction of the Vehicle
(1) The vehicle shall be considered to be destroyed if it is impossible to repair it or such repair is considered to be unreasonable and the owner of the vehicle shall agree to acknowledge it to be destroyed. The repairs shall be considered to be unreasonable if the expected costs for such repair shall exceed the value of the vehicle before the accident.
(2) Should the owner of the vehicle disagree to recognise it to be destroyed, he shall be indemnified for the difference between the vehicle value before and after the accident as well as any expenditure on the evacuation of the vehicle from the place of accident.
(3) If the vehicle is recognised to be destroyed, the indemnity shall be paid in the amount corresponding to the value of the vehicle before the accident and the expenses incurred due to evacuation of the remains of the vehicle from the place of accident. The rights to the remains of the vehicle shall be with the Insurer and the Traffic Bureau.
 
Clause 30. Loss incurred due to the Damage or Destruction of the Road, Road Constructions and Other Tangible Assets
(1) The loss incurred due to destruction of the road, road constructions and other tangible assets shall be the difference between the value of the respective site before and after the accident but in case of the damage of these sites – the restoration costs of the site.
(2) The harm caused to the property shall also include any other loss incurred to the third party and to the owner of the property as a result of the accident.
 
Clause 31. Damage caused to the Environment
(1) The damage caused to the environment as a result of the accident shall be the loss caused due to the degradation of the natural resources or the environment.
(2) The loss shall be indemnified in accordance with the liability limit of the Insurer.
 
Clause 32. Co-operation between the Traffic Bureau and the Insurers on Expertise
The experts performing the technical expertise of the vehicles subject to the compulsory third party liability insurance for inland motor vehicle owners shall obtain the certificate issued by the Traffic Bureau. The regulations on the technical expertise of the motor vehicles shall be issued by the Cabinet of Ministers.
 
Clause 33. Indemnification of the Loss
(1) The loss shall be indemnified by the Insurer who has insured the compulsory third party liability of the motor vehicle owner who caused the accident to happen. 
(2) Should there are two or more drivers to be blamed for causing the accident the compulsory third party liability of which is insured with the same or different insurance companies the insurance indemnity shall be settled by the Insurers to the victim in accordance with the degree of guilt of every of these vehicle owners. 
(3) Should several persons cause the road accident thus causing mutual loss the insurers shall pay insurance indemnification to each victim in proportion to the guilt o each transport vehicle’s driver.
(4) Should it be impossible to determine the guilt of owners or lawful users of the transport vehicles involved in the accident the loss shall be indemnified against assuming that the level of guilt is equal.
(5) If the loss incurred has been indemnified by any other Insurer prior to the Insurer’s decision on the payment of the insurance indemnity, then the amount of such indemnity shall be reimbursed by the Insurer who has insured the compulsory third party liability of the vehicle owner who caused the accident.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Article 33.¹ Indemnification against the loss caused by a trailer (semi-trailer) or other rigid haulage transport vehicle
(1) If the loss has been caused by trailer (semi-trailer) or other rigid haulage transport vehicle            which upon the road accident has been connected to a tractor or other towing vehicle insurance indemnification to the victim shall be paid by the insurer which has insured third person liability of the tractor or other towing vehicle owner.
(2) If the loss has been caused by trailer (semi-trailer) or other rigid haulage transport vehicle            which upon the road accident has not been connected to a tractor or other towing vehicle insurance indemnification to the victim shall be paid by the insurer which has insured third person liability of the trailer (semi-trailer) owner.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 34. Cases when Loss shall not be Indemnified
Pursuant to the present law the Insurer shall not be obliged to indemnify:
1) the loss incurred as a result of using the vehicle the compulsory third party liability has been insured for but for occurrence of which the liability shall not become effective pursuant to clause 2347 of the Civil law. These shall include the loss incurred due to the force majeur or intended by the victim or his substantial negligence;
2) the loss caused to person or property of owner or lawful user of the transport vehicle that has caused the road accident, except the cases set forth in article 33, part three and four;
3) the loss on any damage, destruction or loss of the vehicle or the items located in it if such loss has been incurred to the persons after the accident;
4) the loss incurred to the vehicle during the training or competition drive;
5) the loss on any damage of the vehicle or trailer attached or in any other way coupled to the vehicle that caused the accident;
6) the loss directly or indirectly caused or promoted by the ionised radiation,  radioactive contamination caused by any nuclear fuel, any radioactive, toxic, explosive or any other dangerous feature of any explosive nuclear combination or nuclear element;
7) the profit not gained or the moral detriment caused due to the accident.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 35. Notification on the Insurance Event
(1) The persons involved in the accident shall immediately report on such accident to the Road Police and the Insurer who has insured the compulsory third party liability of the motor vehicle that has caused the accident as well as all the possible measures shall be performed to reduce or avoid any future losses.
(2) The person the property or the vehicle of which has suffered the loss shall be obliged to maintain the damaged vehicle or property in the condition as it was after the accident until the time it is examined by the expert nominated by the Insurer.
(3) Should the Insurer is unknown, the accident shall be reported to any other Insurer or the Traffic Bureau. If the Insurer – beneficiary of the notification has not the one having insured the compulsory third party liability of the vehicle that has caused the accident to happen, the notification shall be immediately passed to the Traffic Bureau. The Traffic Bureau shall find out the Insurer in charge of such liability and shall report to the victim its name and address.
(4) The victim suffered in the accident shall be liable to claim for the indemnification of the loss incurred during the accident in accordance with this law if at least one of the persons involved in the accident has immediately (as soon as it became possible) reported it to the Road Police.
 
Clause 36. Activities of the Insurer following the Receipt of the Notification on the Insurance Event
(1) The Insurer shall immediately but not later than within 3 working days (from the date of the receipt of the written notification on the insurance event) send the expert to inspect the damaged property.
(2) Should the expert nominated by the Insurer has failed to arrive in the term mentioned in p.1 of the present clause the victim shall have the right himself to choose the expert for the evaluation of the loss. In this case the Insurer shall not be entitled to dispute any evidence on the loss presented by the victim.
 
Clause 37. Application on the Insurance Indemnity and its Calculation Procedure
(1) The Insurer shall be in charge of calculating the loss incurred as a result of the accident and the insurance indemnity.
(2) The calculation shall be made following the receipt of the application submitted by the person liable to the insurance indemnity. The application shall be accompanied by:
1) the reference issued by the Road Police;
2) the documents on the respective accident issued by the investigation or legal institutions (if any);
3) any other documents acknowledging the value of the loss.
(3) Upon making the decision on the settlement of the insurance indemnity due to the loss incurred to the person the Insurer may request from the medial institution any written information on the treatment of the victim, the diagnosis and forecast of the illness, to use the statements made by the forensic medicine expertise as well as, if necessary, to obtain any additional information, to forward the victim to the medial investigation covering all the associated costs. The information on the treatment of the victim, diagnosis and forecast of the illness acquired by the Insurer shall be considered to be confidential.
(4) In order to recover the loss the institution that paid for the treatment of the victim and provided the emergency assistance from its own resources shall submit to the Insurer or the Traffic Bureau the calculation on the cash spent for the treatment of such person.
(5) Upon the request of the demander the Insurer shall make him familiar with the bills and the procedure of calculating the insurance indemnity.
(6) The request for the indemnification of the loss shall be considered if it is submitted not later than within one year since the day the victim acquired the rights to such indemnification.
 
Clause 38. Calculation Term of the Insurance Indemnity and the Payment Procedure
(1) The insurance indemnity shall be calculated and paid within one month since the receipt of all the respective documentation.
(2) Upon the request made by the victim until complete evaluation of the loss the Insurer shall be entitled to pay the advance.
 
Clause 39. Resolution made by the Insurer
(1) Following the consideration of the submitted documents on the road accident the Insurer shall make the decision on the payment or rejection of the insurance indemnity.
(2) After passing the decision the written notification shall be forwarded by the Insurer to the demander within three working days.
(3) Should the person concerned shall not be satisfied with the Insurer’s decision on the payment of the insurance indemnity he/she shall submit to the Traffic Bureau the complaint on the revision of the said decision. Should the person concerned or the Insurer shall fail to be satisfied with the resolution passed by the Traffic Bureau the claim on the collection of the loss may be filed with the court.
 
Clause 40. Claim of Regression made by the Insurer and the Traffic Bureau
(1) The Insurer may submit the claim of regression against:
1) owner of the transport vehicle that has caused the road accident if the former:
a) has been driving the transport vehicle under the influence of alcohol, narcotic, psychotropic or other toxic maters,
b) has been driving the transport vehicle without the license to drive the given category vehicle,
c) has deliberately left the place of accident or escaped from compulsory test of alcohol, narcotic, psychotropic or other toxic matters, or has used such a matters after the road accident prior to the test;”.
2) the owner (master) of the road if he is responsible for the loss incurred during the accident;
3) the person causing the loss with intention or due to severe negligence.
2) The Traffic Bureau may submit the claim of regression against:
1) the owner of the vehicle who caused the accident to happen and who has not insured his compulsory third party liability or against the legal user of the said vehicle;
2) the driver of the vehicle who has obtained the said vehicle illegally;
3) the Insurer if upon identifying the vehicle causing the loss and the obligation to indemnify such loss was the responsibility of the Insurer.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 41. Indemnification of Loss to Foreigners
The loss incurred to the foreigners as well as the legal person from overseas shall be indemnified in accordance with the procedure set by the law of the Republic of Latvia.
 
Part IV. Public Administration in respect of the Compulsory Third Party Liability Insurance
 
Clause 42. Traffic Bureau
(1) The Traffic Bureau is a public institution operating under the supervision of the Ministry of Finance. The provisions of the Traffic Bureau shall be approved by the Cabinet of Ministers.
(2) The Traffic Bureau shall also perform the office functions for the Green Card of Latvia.
 
Clause 43. Authority of the Traffic Bureau
(1) The Traffic Bureau shall ensure setting up and operating the compulsory third party liability insurance system for inland motor vehicle owners in the country.
(2) The Traffic Bureau:
1) shall set up the guarantee (reserve) fund for the compulsory third party liability insurance for inland motor vehicle owners;
2) shall set up the fund for interest protection of the Insured for the compulsory third party liability insurance for inland motor vehicle owners;
3) shall pay the insurance indemnity in cases stipulated by this law;
4) shall produce draft bills and the proposals in respect of the issues related to the compulsory third party liability insurance for inland motor vehicle owners;
5) shall set up and maintain the data base required for the compulsory third party liability insurance for inland motor vehicle owners;
6) shall provide the information to the victim on the insurance company that has insured the third party liability of the vehicle owner involved in the accident;
7) in the procedure under the legislative bills may require and receive free of charge from the state management institutions, municipalities and the insurance companies any information necessary for the work;
8) shall develop the methods and principles for the performance of the technical expertise of the vehicles related to the compulsory third party liability insurance for inland motor vehicle owners;
9) shall file the claim of regression with the court in cases stipulated in the present law;
10) shall be in charge of the international co-operation in respect of the compulsory third party liability insurance for inland motor vehicle owners and of the conclusion of the respective contracts;
11) shall render the services related to the technical, legal and medical expertise of the compulsory third party liability insurance for inland motor vehicle owners, certification and training of the technical experts (improvement of their professional skills) as well as the services to be performed by the Traffic Bureau on behalf of Latvia in cases stipulated in the international covenants;
12) shall render the assistance to the Insured from Latvia to protect their rights and interests overseas in respect of the issues related to the compulsory third party liability insurance for inland motor vehicle owners.
 
Clause 44. Guarantee (Reserve) Fund for the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
(1) The Traffic Bureau in co-operation with the Insurers shall set the guarantee (reserve) fund for the compulsory third party liability insurance for inland motor vehicle owners (hereinafter referred to as the Guarantee Fund). The goal of the fund shall be to ensure the insurance indemnity to cover the loss caused by:
1) the vehicle the owner of which has failed to insure his third party liability;
2) an unknown vehicle except the loss caused to the property or the environment;
3) the vehicle being out of the possession of the owner, preserver or user without their fault and due to the illegal activities performed by other persons;
4) the vehicle registered overseas the owner of which has failed to conclude the insurance contract upon crossing the border.
(2)The loss to be indemnified in cases envisaged in the international covenants shall be covered from the resources of the Guarantee Fund.
(3)The reserves of the Guarantee Fund shall consist of:
1) single payments made by the Insurers in the amount fixed by the Cabinet of Ministers;
2) deductions from the insurance premiums for the compulsory third party liability insurance for inland motor vehicle owners in the amount fixed by the Cabinet of Ministers,
3) any additional payments in the amount fixed by the Cabinet of Ministers made by the Insurers;
4) the cash recovered by the Traffic Bureau in the form of regress for the loss incurred due to the road accident;
5) donations and grants.
(4) The Guarantee Fund shall be maintained by the Traffic Bureau. The decisions on the application of the resources according to the set goals shall be the responsibility of the Board of the Traffic Bureau.
(5) Application of the cash spent from the Guarantee Fund shall be monitored by the Council of the Guarantee Fund consisting of the representative from the Traffic Bureau, the State Insurance Supervision Inspection and the persons authorised by the Insurers.
(6) The provisions of the Guarantee Fund shall be approved by the Cabinet of Ministers.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 45. Fund for the Interest Protection of the Insured for the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
(1) The Traffic Bureau in co-operation with the Insurers shall set up the fund for the interest protection of the Insured for the compulsory third party liability insurance for inland motor vehicle owners (hereinafter referred to as the Interest Protection Fund) the goal of which is to ensure the insurance indemnity in case of insolvency of the Insurer.
(2) The reserves of the Interest Protection Fund shall consist of:
1) the payments made by the Insurers in the procedure set by the Cabinet of Ministers;
2) donations and grants.
(3) Should the Fund for the Interest Protection of the Insured is short of cash for the settlement of its obligations the cash from the state budget shall be transferred to the Fund in the procedure stipulated by the Cabinet of Ministers.
(4) The Fund for the Interest Protection of the Insured shall be maintained by the Traffic Bureau. The cash from such fund shall be paid upon the respective resolution made by the Council of the Traffic Bureau.
(5) The operations of such Fund shall be monitored by the State Insurance Supervision Inspection.
(6) The provisions of the such Fund shall be approved by the Cabinet of Ministers.
 
Clause 46. Measures for the Prevention of Road Accidents
(1) The road traffic safety program shall be co-ordinated by the Council of the Road Traffic Security Service set up by the Cabinet of Ministers.
(2) For the road accident prevention purposes the Insurers shall make the quarterly payments of 0,6 percent of he insurance premium to the account indicated by the Traffic Bureau.
(3) The application of such money shall be the responsibility of the Road Traffic Safety Council.
 
Clause 47. Obligations of the Road Traffic Security Service and the State Technical Supervisions Inspection in respect of the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
(1) Prior to the registration and technical inspection of the vehicle the Road Traffic Security Service and the State technical Supervision Inspection shall examine the presence of the compulsory third party liability insurance for inland motor vehicle owners.
(2) The registration and technical inspection of the vehicle cannot be performed if the compulsory third party liability has not been insured. 
 
Clause 48. Obligations of the Road Police in respect of the Inspection and Control of the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners
(1) The official from the Road Police shall be authorised to examine the driving documents of the vehicle owner acknowledging the presence of the respective insurance contract for the compulsory third party liability insurance for inland motor vehicle owner.
(2) If such inspection shows that the compulsory third party liability of the vehicle owner has not been insured the official from the Road Police shall make the respective protocol in the order stipulated in the Latvian Administrative  Infringement Code.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 49. Obligations by the Border Guards upon performing the Control of the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners when the Vehicle is crossing the Border
(1) The border guards shall examine the presence of the insurance contracts for the compulsory third party liability insurance for inland motor vehicle owners irrespective of the ownership and place of registration of such vehicle.
(2) If upon crossing the border of Latvia the driver of the vehicle is unable to present such document acknowledging the conclusion of the contract for the compulsory third party liability insurance for inland motor vehicle owner the vehicle may continue its trip only after such compulsory third party liability has been insured by the vehicle owner.
(3) If it is ascertained during the inspection that upon departure from Latvia the transport vehicle owner’s third person liability has not been insured the penalty stipulated in the Latvian Administrative  Infringement Code shall apply. Further movement of the transport vehicle to cross the border shall be only permissible upon payment o the penalty.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Clause 50. Co-operation among the Traffic Bureau, the Road Police, the Road Traffic Security Service, the State Technical Supervisions Inspection and the Insurers in respect of the Information Exchange
(1) The Traffic Bureau, the Road Traffic Security Service, the State Technical Supervisions Inspection and the Insurers shall set up the data base of the insured vehicle owners. The information on the vehicles the compulsory third party liability of which has been insured shall be collected and consolidated in the data base of the insured vehicle owners maintained by the Traffic Bureau and in the vehicle registration data base maintained by the Road Traffic Security Service.
(2) Prior to the conclusion of the insurance contract the Insurer shall be entitled to receive from the Traffic Bureau, the Road Traffic Security Service, the State Technical Supervisions Inspection any information being at their disposal on the respective vehicle and the Insured.
(3) Following the request made by the Traffic Bureau the Road Traffic Security Service shall supply from the respective data base the information on the specific vehicle and its owner, the legal user or the driver as well as on the road accident.
(4) Upon the request of either the Traffic Bureau or the insurer the Road Policy shall introduce the Traffic Bureau or the insurer with the information at its disposal concerning the road accident and issue a certificate about the road accident, and, if necessary, provide the possibility to obtain copies of the documents executed in relation to the given road accident.
(5) Following the request made by the Traffic Bureau the State Technical Supervision Inspection shall provide the information it has acquired on the specific vehicle and its owner, the legal user or the driver.
(6) Provision of the data listed in this clause and the information exchange among the respective institutions shall be implemented in the procedure set by the Cabinet of Ministers.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
Intermediary Terms
1.Until 1 June, 1997 the Cabinet of Ministers shall issue the regulations on:
1) the insurance premiums, their increase or reduction procedure;
2) the standard insurance policies for the compulsory third party liability insurance for inland motor vehicle owners;
3) limit amounts for the insurance indemnity;
4) the Traffic Bureau, the Guarantee Fund and the Fund for the Interest Protection of the Insured.
2. Any other bills intended for the implementation of the present Law shall be issued by the Cabinet of Ministers by 1 September, 1997.
3. To announce that the present law shall be effective from 1 June, 1996 until 31 August, 1997 according to the following procedure:
1) the contracts on the compulsory third party liability insurance for inland motor vehicle owners should be made or pursuant to the provisions of the present law the voluntarily insurance contracts should be renewed by stating that the Law on the Compulsory Insurance shall become effective from 1 September, 1997;
2) since 1 June, 1997 the registration and the technical inspection of the vehicle shall not be performed unless the contract on the compulsory third party liability insurance for inland motor vehicle owner has been concluded in accordance with the provisions stipulated in the subsection 1 of this clause;
3) the provisions envisaged in the 2nd part of clause 49 of the present law shall apply from 1 September, 1997. The owner of the vehicle registered overseas who crossed the border until 31 August, 1997 and is still staying in Latvia shall be obliged to conclude such insurance contract not later than by 31 August, 1997;
4) provisions stipulated in clauses 19 and 48 of the present contract shall apply since 1 September, 1997.
4. The insurance indemnity for the accidents that happened after 1 September, 1997 shall be paid from the resources of the Guarantee Fund.
5. Part II of the clauses 9 and 42 shall become effective after the Republic of Latvia has become the member of the International Compulsory Third Party Liability Insurance ( “Green Card”) System.
6. Following the effect of the present law the regulations No. 300 Regulations on the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners issued by the Cabinet of Ministers pursuant to the procedure of clause 81 stipulated by the Satversme (Ziņotājs No. 19, 1996 (newspaper of the Cabinet of Ministers and the Saeima of the Republic of Latvia) and the regulations No. 458 Amendments on the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners (Latvijas Vēstnesis, No. 228, 229, 230, 1996).
7. The provisions set forth in article 14, part one hereof shall not apply to international third person liability compulsory insurance contracts (Green Card).
8. The provisions set forth in article 16 and 17 hereof shall not apply to international third person liability compulsory insurance contracts (Green Card) not valid on the territory of Latvia.
 
(As amended by the Law from 19.12.1999 effected as from 24.01.2000)
 
The Law was adopted by the Saeima on 13 March, 1997.
G. Ulmanis, President of the State
Riga, 25 March, 1997