The Fund for the Protection of the Insured protects the interests of insured persons in case of an insurance company’s bankruptcy. The assets of the Fund for the Protection of the Insured consist of deductions in the amount of 0.1% of the gross sum of insurance premiums received from natural persons for the classes of insurance specified by law, with the exception of insurance relating to a unit-linked life insurance contract.
Only a policyholder, natural person, may receive insurance indemnity in case of insurer's default:
- in life insurance, except insurance in relation to a market-linked life insurance contract – in the amount of 100 % insurance indemnity, but not more than 15 000 euro per policyholder;
- other types of insurance referred to in the Law – 50 % in the amount of insurance indemnity, but not more than 3000 euro per policyholder.
The accumulation of assets in the Fund for the Protection of the Insured and the disbursement of guaranteed insurance indemnities is organised by Latvijas Banka. The guaranteed insurance indemnity from the Fund for the Protection of the Insured shall be disbursed only after initiating a bankruptcy procedure at the insurance company. The creditor’s right to claim against the insurer is exercised by Latvijas Banka.
Members of the Fund for the Protection of the Insured