On 20 December 2023, the House of Representatives approved an important legislative amendment, namely Law 167(I) of 2023, bringing changes to the legal framework governing the Motor Vehicles’ Third-Party Liability Insurance Laws of 2000-2021.

The enactment of the law was dictated by the need for alignment with the European Union Directive (EU) 2021/2118, dated 24 November 2021 (the “Directive”), which amends Directive 2009/103/EC related to insurance against civil liability concerning the use of motor vehicles and the enforcement of the obligation to insure against such liability.


The amending law and its implications

The main changes brought by Law 167(I) of 2023 are summarised below.

Cooperation empowerment (Article 29A)

Law 167(I) of 2023 grants the Motor Insurer’s Fund of Cyprus (“MIF”) expanded powers to engage in timely cooperation with similar organisations in other Member

States and other relevant parties during insolvency procedures. The amendment ensures a more coordinated and efficient approach to proceedings.

Additionally, the amending law facilitates the exchange of information, ensuring seamless collaboration, especially concerning specific claims.

Compensation procedure enhancement (Article 32)

The amendment introduces a refined procedure for the payment of compensation by the MIF. Key aspects include:

  • Dispute resolution: in cases of disputes between the MIF and liability insurers, the law establishes provisions for equal payments to the injured party, with reimbursement procedures outlined.
  • Direct claim submission: in certain cases, injured parties may submit claims directly to the MIF, simplifying the compensation process.
  • Limitation clarification: Law 167(I) of 2023 clarifies limitations on compensation payments for bodily injury and material damage, with specific conditions and exceptions outlined.


Right to recover compensation (Article 32A)

The new Article 32A introduces the right of the MIF to seek recovery from bodies in the insurer’s home Member State, coupled with subrogation to the rights of the injured party against the responsible party or insurer.


Final remarks

Law 167(I) of 2023 entered into force upon publication in the Official Gazette of the Republic of Cyprus, namely on 20 December 2023.

However, the provisions of paragraph (b) of subsection (2) and subsections (3) and (4) of section 20A shall come into force on the later of the following dates: 23 April 2024 or on the date of application of the implementing act of the European Commission referred to in the sixth paragraph of Article 16 of Directive 2009/103/EC.

The objects of the Directive and its Cypriot implementing legislation are to ensure an equal minimum protection of parties injured as a result of traffic accidents across the European Union, to ensure their protection in case of insolvency of insurance undertakings and to ensure equal treatment of claims-history statements by insurers for potential policy holders crossing internal Union borders.

The European legislator may in the future approve additional measures to be adopted at Union level.

Last update: February 2024



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