2 Contents 1. Introduction Analysis of Business Outcomes in the Non-Life Insurance Lines... 4 A. General... 4 B. Profitability... 5 C. Concentration... 9 D. Outcomes in the Property Vehicle Insurance Line Regulation in the Compulsory Changes in Comprehensive Vehicle Insurance Policies and Rates Modular Policy Database for the Location of Insurance Fraud Property Insurance in Mortgages Health Insurance A. Business Results in Health Insurance B. Definition of the Event insured in Long-term Care Insurance C. Group long-term care Insurance D. Definitions of Illnesses in Critical Illness insurance E. Regulations regarding a Prior Medical Condition List of Tables Table D-1 Distribution of Gross Premiums by Non-Life Insurance Lines, Table D-2 Rate of Profit from Gross Premiums in Various Non-Life Insurance Lines, Table D-3 Results of Centralization Indices in Non-Life Insurance Lines, Table D-4 Use of Parameters in Setting Compulsory Motor-Vehicle Insurance Rates for Private Vehicles Table D-5 Changes in Average Compulsory Motor-Vehicle Insurance Rates Table D-6 Eligibility for Reimbursement by Avner to Insureds, December Table D-7 Comparison of Property Insurance Rates at Mortgage Banks, 2003/ Table D-8 Data on Group Insurance, Table D-9 Data on Individual Insurance, List of Charts Chart D-1 Distribution of Gross Non-Life Insurance Premiums by Lines, Chart D-2 Profitability of Non-Life Insurance Lines, ±
3 Chart D-3 Profits in Non-Life Insurance by Main Lines, Chart D-4 Distribution of Gross Non-Life Insurance Premiums and Profit by Lines, Chart D-5 Distribution of Gross Premiums by Companies in Non-Life Insurance Lines, Chart D-6 Number of Motor Vehicles and Number of Auto Thefts, Chart D-7 Total Premiums in Vehicle Property Line, Chart D-8 Business Outcomes in Sickness and Hospitalization Line, Chart D-9 Distribution of Gross Premiums by Companies in Sickness and Hospitalization Line, Chart D-10 Distribution of Gross Premiums by Companies in Sickness and Hospitalization Line, Chart D-11 Distribution of Gross Premiums by Sub-Lines in Health Insurance, Chart D-12 Loss Ratio in Group Insurance by Main Health Insurance Sub-Lines, Chart D-13 Loss Ratio in Individual Insurance by Main Health Insurance Sub-Lines, Chart D-14 Ratio of Direct Commission Fees to Gross Premiums in Group Insurance by Main Health Insurance Sub-Lines, Chart D-15 Ratio of Direct Commission Fees to Gross Premiums in Individual Insurance by Main Health Insurance Sub-Lines, Chart D-16 Gross Premiums and Total Gross Claims in long-term care insurance, 2003 Individual Versus Group Chart D-17 Number of Insureds in long-term care insurance, 2003 Individual Versus Group Chart D-18 Gross Premiums and Total Gross Claims in Insurance for Covering Medical Expenses, 2003 Individual Versus Group... 34
4 1. Introduction The Non-Life Insurance Department in the Capital Market, Insurance and Savings Division is responsible for policy-making, regulation and ongoing supervision of all lines of the insurance industry, with the exception of life insurance. The goal of the Department's activities is to create a fairer and more competitive market in the interests of the insured public. The insurance lines include property insurance, compulsory and comprehensive vehicle insurance, liabilities insurance (professional liability, employer's liability, third party, etc.), financial insurance (credit, sales guarantees, etc.) and health insurance (long-term care, coverage of medical expenses, transplants, personal accidents, etc.) In 2003, among other areas of work, the Department continued to implement the reform in compulsory vehicle insurance: A special director was appointed for the Avner corporation to ensure the proper and correct management of the claims reconciliation procedure and to maintain Avner's assets in the public interest, to repay moneys accumulated in Avner to the insured public, to implement additional reductions in compulsory vehicle insurance rates and to enhance competition in the line. The Department also addressed the issue of dividing policy coverage for compulsory vehicle insurance and promoting legislation enabling the establishment of a data base for locating insurance fraud against the insurance companies. In the field of health insurance, minimum conditions were established for defining the event insured in long-term care insurance, and draft regulations were published requiring the insurance companies to enable insureds in group long-term care programs to transfer to an individual policy for a life-long insurance period. In addition, minimum definitions were established for illnesses in Critical sickness insurance, and regulations were signed restricting the validity of the exclusion clause relating to a prior medical condition in all health insurance policies. An analysis of the business outcomes in the non-life insurance lines shows that total insurance premiums in the non-life lines for 2003 were NIS 17.5 billion. Profit in non-life insurance lines in 2003 was 113% higher than in 2002, totaling NIS 2,197 million, compared to NIS 1,209 million in the previous year. It should be emphasized that a substantial part of the growth in profitability in 2003 was due to the growth in profits from investments.
5 The Capital Market, Insurance and Saving Division 2. Analysis of Business Outcomes in the Non-Life Insurance Lines A. General Table D-1 details the distribution of gross insurance premiums by line of non-life insurance, as well as the rate of change in each of the lines for the period 1999 through As can be seen, insurance premiums in the non-life lines in 2003 totaled approximately NIS 17.5 billion. This figure is some NIS 250 million higher than the total collected in the non-life insurance lines in 2002, and represents a growth rate of 1.4%. In addition, 2003 saw a mixed trend in terms of changes in insurance premiums as compared to the previous year. In some lines, total insurance premiums increased, whereas in others a drop was recorded. No change was recorded in fees in the compulsory vehicle insurance line. Table D-1 Distribution of Gross Premiums by Non-Life Insurance Lines, (NIS millions, December 31, 2003 prices, percent) 1999 Rate of Rate of Rate of Rate of change change change change 2003 Property loss 861 6% % 1, % 1, % 1,421 Vehicle property 4, % 4, % 4,953 1% 5,005-1% 4,953 Homeowners % 1, % 1, % 1, % 1,332 Property other % % % % 1,128 Employers' liability % % % % 328 Third party % % % % 671 Vehicle compulsory 3, % 3,928 3% 4, % 4,221 0% 4,222 Other liabilities % % % % 861 Personal accidents % % % % 222 Sickness and hospitalization % 1, % 1, % 1,460 10% 1,607 Other % % % % 715 Total business 13, % 14, % 15, % 17, % 17,459 Division, on the basis of the companies' consolidated statements
6 Chart D-1 presents the distribution of gross non-life insurance premiums according to the various insurance lines for Approximately 53% of total insurance premiums originated from the vehicle insurance lines (compulsory and property), in which no significant change was recorded by comparison to Chart D-1 Distribution of Gross Non-Life Insurance Premiums by Lines, 2003 (percent) Vehicle property 29% Vehicle compulsory 24% Property loss 8% Home owners 8% Property - other 6% Other 4% Sickness and hospitalization 9% Personal accidents 1% Other liabilities 5% Third party 4% Employers' liability 2% Division, on the basis of the companies' consolidated statements B. Profitability Chart D-2 shows the profit (in NIS millions) in the non-life insurance lines for The profit in the non-life insurance lines in 2003 was some 113% higher than in 2002, totaling NIS 2,197 million, as compared to NIS 1,209 million in the previous year. As can be seen, since 2000 there has been a steady rise in the profits of the insurance companies; the growth rate for 2003 is the highest for the years shown. Much of the growth in profitability in 2003 was due to the increase in profits from investments. µ
7 The Capital Market, Insurance and Saving Division ± ± ± ± ± Chart D-2 Profitability of Non-Life Insurance Lines, (NIS millions, December 31, 2003 prices) ±ππ ±ππµ ±ππ ±ππ ±ππ ±πππ ± Division, on the basis of the companies' consolidated statements Chart D-3 shows the profit (in NIS millions) in the main non-life insurance lines for the period This chart reflects a very high level of variance in the profitability of each of the non-life insurance lines, and shows that different lines yielded differing rates of profit in different years. All lines included in the chart, including the various liability lines, recorded profits in In all the years shown in the chart, the compulsory insurance line is the most profitable.
8 Chart D-3 Profits in Non-Life Insurance by Main Lines, (NIS millions, December 31, 2003 prices) Vehicle compulsory Sickness and hospitalization Vehicle property Property loss Comprehensive residential Various liabilities (excluding vehicle compulsory) ± ± ± ±πππ ± Division, on the basis of the companies' consolidated statements Chart D-4 presents data for the proportion of insurance premiums in the various insurance lines out of total non-life insurance premiums, as well as figures for the rate of profit in the various insurance lines out of total non-life insurance profit for As can be seen, the most notable in terms of expenses is the compulsory vehicle insurance line, which had the highest profit, at 61% of total non-life insurance profit, while insurance premiums accounted for 24% of gross insurance premiums in the non-life lines.
9 The Capital Market, Insurance and Saving Division Chart D-4 Distribution of Gross Non-Life Insurance Premiums and Profit by Lines, 2003 (percent) Ratio of profit in various insurance lines to total profit in non-life insurance Ratio of premiums in various insurance lines to total premiums in non-lifeinsurance µ ± Liabilities (excluding vehicle compulsory) Personal accidents Other risks Sickness and hospitalization Property loss Property others Comprehensive residential Vehicle property Vehicle compulsory Division, on the basis of the companies' consolidated statements Table D-2 shows the rate of profit from gross insurance premiums in the various nonlife insurance lines for the period As can be seen, most of the lines have been profitable over the years, such as the vehicle lines, comprehensive residential and sickness and hospitalization. Employer's liability insurance, which has recorded losses in recent years, was profitable in Personal accidents and third party insurance shows a mixed trend in profitability. The rate of profit from insurance premiums for all the non-life insurance lines increased in 2003, at 12.6%, as compared to 6% in 2002.
10 Table D-2 Rate of Profit from Gross Premiums in Various Non-Life Insurance Lines, (NIS millions, December 31, 2003 prices, percent) Property loss 3.6% 1% 2.4% 3.5% 4.8% Vehicle property 3.2% 0.9% 4.2% 5.1% 3.7% Comprehensive residential 10.1% 9.8% 8.5% 5.2% 8.6% Property others 5.6% 5% 3.5% 6.2% 4.1% Employers' liability -27.5% -17.2% -11.1% -27.5% 26.2% Third party -0.8% 2.2% -1.5% -5.3% 10.2% Vehicle compulsory 14.7% 3.8% 8.7% 15% 31.9% Other liabilities 9.4% 12.7% 6.1% 0% 10.6% Personal accidents 2.6% 2.7% -8.3% -4.9% 4.4% Sickness and hospitalization 5.4% 6.3% 8.6% 3.9% 7.9% Other risks 1.6% -0.6% 3.4% 4.5% 7.8% Total 6.6% 3.2% 5.3% 6% 12.6% Division, on the basis of the companies' consolidated statements C. Concentration Chart D-5 shows the distribution of gross insurance premiums by insurance companies in the non-life lines in Israel in As can be seen, four insurance groups 1 collect 64% of the insurance premiums in the non-life insurance lines. The market share of the Clal group, which is the largest group in the non-life insurance line, is 21%. The market share of the group in the comprehensive residential and property loss lines is 32%; in compulsory vehicle insurance 19%; in property vehicle insurance 15%; and in liabilities insurances (excluding compulsory vehicle insurance) 2 21%. The outcomes obtained in 2003 are very similar to those obtained in The Clal group Clal, Aryeh, Clal Credit Insurance; the Harel group Harel and Dikla; the Phoenix group Phoenix and Hadar; and the Migdal group Migdal and Hamagen. 2. The liabilities insurances include the following lines: Employer's liability, professional liability, third party and other liabilities. π
11 The Capital Market, Insurance and Saving Division Chart D-5 Distribution of Gross Premiums by Companies in Non-Life Insurance Lines, 2003 (percent) Direct Insurance 4% AIG 2% Agricultural insurance 2% Other 1% Govermmental 1% ILCD 4% Clal Group 21% Eliahu 5% Ayalon 7% Menorah 8% Migdal Group 10% Phoenix Group 14% Harel Group 19% Division, on the basis of the companies' consolidated statements Notes: Governmental: BSSCH, Inbal, Natural Disasters in Agriculture Insurance Fund Other: New BSSCH, Shomera, Shirbit, EMI-Ezer The concentration indices help estimate the level of concentration in specific market sectors. The assumption is that the higher the level of concentration, the lower the level of competitiveness, the less the incentive to efficiency and the grater the ability of commercial bodies to dictate the price of the product or service. Table D-3 shows the outcomes of the concentration indices in the principal non-life insurance lines for The higher these indices, the greater the level of concentration. 1. The Herfindahl-Hirschman Index (HHI), which is calculated by totaling the squares of the insurance companies' market shares. The market share for each company is calculated as the ratio of gross insurance premiums collected by the company and total insurance premiums in the line. The closer the number obtained is to 1, the more concentrated the line. 2. The Concentration Ratio 3 (CR3) index combines the market shares of the three largest insurance companies or groups in the line. The higher the percentage obtained, the more concentrated the line. 3. The Concentration Ratio 5 (CR5) index combines the market shares of the five largest insurance companies or groups in the line. ±
12 As can be seen, all the indices show that the most concentrated lines are sickness and hospitalization and property loss. The least concentrated lines are the vehicle lines (compulsory and property). In the sickness and hospitalization line, the market share of the three largest companies is 76.8%, and the market share of the five largest companies is 98.3%. Table D-3 Results of Centralization Indices in Non-Life Insurance Lines, 2003 Herfindahl- Hirschman Vehicle compulsory Vehicle property Comprehensive residential Sickness and hospitalization Property loss Employers' liability CR3 43.7% 47.8% 56.3% 76.8% 77.6% 61.1% CR5 62.8% 64% 79.6% 98.3% 89.5% 82.4% Division, on the basis of the companies' consolidated statements D. Outcomes in the Property Vehicle Insurance Line Chart D-6 shows the number of motor vehicles and the number of vehicle thefts for the period The chart shows that the downward trend in the number of vehicle thefts continued in 2003 (a reduction of 2%), as compared to the continuing rise in the number of vehicles (an increase of 1.1%). Chart D-7 shows total insurance premiums in the property vehicle line for these years. In 2003, total insurance premiums in the line fell by 1% as compared to ±±
13 The Capital Market, Insurance and Saving Division Chart D-6 Number of Motor Vehicles and Number of Auto Thefts, (thousands) Number of auto thefts Number of motor vehicles µ µ No. of vehicles ±µ ± µ ± No. of thefts ±ππ ±ππ ±πππ ± Source: Crime in Israel Statistical Summary Report for 2003, Statistics Section, Israel Police, and Central Bureau of Statistics publications µ ± Chart D-7 Total Premiums in Vehicle Property Line, (NIS millions, December 31, 2003 prices) ±ππ ±ππ ±πππ ± Division, on the basis of the companies' consolidated statements ±
14 3. Regulation in the Compulsory Vehicle Insurance Line The Reform in the Compulsory Vehicle Insurance Line In 1997, legislation was enacted mandating the opening of the compulsory vehicle insurance line to competition. One of the goals of the reform in the compulsory vehicle insurance line was to transfer liability for the financial expenses in the line from the public to the insurance companies, and to regulate a competitive structure in order to stabilize the line and reduce insurance premiums. The share of the Avner Corporation, which functioned as a joint insurer in the compulsory vehicle insurance line, out of insurance policies was gradually reduced from 70% in 1997 to 0% in 2003, when Avner discontinued its operations in the issuing of new policies as a joint insurer. In January 2003, a special director was appointed for Avner with the authorities established for an authorized director in accordance with the Supervision of Insurance Businesses Law, The director's function is to ensure proper and correct management of the claims reconciliation procedure and to maintain Avner's assets in the public interest. Differential (Risk Adjusted) Rates The insurance companies now determine rates in the compulsory vehicle insurance line with reference to the recommendations of the database operator, and with the authorization of the Commissioner of Insurance. The new rates of most of the companies take into account the characteristics of the vehicle and the driver, so that careful insureds pay less than dangerous insureds. The purpose of using these parameters is to adjust the insurance premium to the risk presented by the insured. The permitted parameters are: 1. Engine capacity 2. Gender of the youngest driver driving the vehicle regularly 3. Age of the youngest driver driving the vehicle regularly 4. Seniority of license of the youngest driver driving the vehicle regularly 5. Number of prior claims over the past three years of all the persons driving the vehicle regularly 6. Number of driving license revocations over the past three years for all the persons driving the vehicle regularly 7. Installation of air bags in the vehicle ±
15 The Capital Market, Insurance and Saving Division In 2003, almost all the insurance companies, with the exception of Eliahu and ILDC, began to apply differential (risk adjusted) rates in pricing the insurance premium. Table D-4 shows the parameters used by each insurance company in determining compulsory vehicle insurance rates as of December 2003: Table D-4 Use of Parameters in Setting Compulsory Motor-Vehicle Insurance Rates for Private Vehicles (as of December 31, 2003) Engine capacity Driver's gender Driver's age Driver's seniority Previous claims License revocations Air bags installed in vehicle AIG Ayalon Eliahu Aryeh Agricultural Insurance Direct Insurance ILDC Migdal/Hamagen Phoenix/Hadar Harel Clal Menorah Shomera Shirbit Since July 2003, the difference between the compulsory vehicle insurance premiums required of different insureds by the same insurance company has grown, as has the difference between the premiums required of the same insured by different companies. In order to help the insured to compare compulsory insurance rates, the Capital Market, Insurance and Savings Division has developed a system enabling a comparison of insurance rates for private vehicles for each insured. The system may be found on the Division's website: ±
16 Reduction of Compulsory Vehicle Insurance Rates As noted, one of the goals of the reform in the compulsory vehicle insurance line was to regulate a competitive structure in the line in order to enhance economic efficiency and reduce the levels of insurance premiums paid by the public. From 1998, as controlled competition was introduced in the line, the average rates paid have fallen by a cumulative average of 30%, as detailed in Table D-5. In 2003, the rate was reduced by 11%, as follows: July 2003 following the recommendation of the database operator, 3 compulsory insurance rates for private vehicles and for commercial vehicles weighing up to 4 tons were reduced by an average of 7.5%. November the collection rate for Karnit 4 was reduced from 5.43% to 1%. This change reduced the final premium paid by the insured by 3.5%. In place of the payments transferred to Karnit by the insured public, Avner now transfers to Karnit the sum of NIS 13 million a month from cumulated surpluses in the corporation. Table D-5 Changes in Average Compulsory Motor-Vehicle Insurance Rates Date Change in average rate January %- September %- July %- September %- April %+ July %- November %- 3. The recommendation of the database operator for risk-based rates, as well as other documents published by the database operator, may be found on the Department's website at the following address: gov.il/hon/2001/insurance/betuahr.asp. 4. Karnit is a corporation established in accordance with the Compensation for Road Accident Victims Law, , charged with compensating injured persons who are eligible for compensation in accordance with this law and who cannot demand compensation from an insurance company for one of the following reasons: 1) The identity of the driver responsible for compensation is unknown (e.g. in hit and run accidents). 2) The driver does not have insurance in accordance with the Vehicle Ordinance, or the insurance does not cover the relevant liability. 3) The insurer is in the process of liquidation or an authorized director has been appointed. For information on the manner of collection for Karnit, see Section D in the Annual Report of the Commissioner of the Capital Market, Insurance and Savings for 2002, p ±µ
17 The Capital Market, Insurance and Saving Division Fines on Account of Defective Reports to the Database Operator In accordance with the legal provisions, all insurance companies forward data once a quarter to the database operator relating to the details of the vehicle and driver in all insurance policies issued in the compulsory vehicle insurance line, as well as details of claims filed against them. The reported data are intended to be used by the database operator in calculating the risks in the compulsory vehicle insurance line. Due to the great importance of collecting high-quality data, the Commissioner of Insurance imposed fines on several insurance companies whose reports failed to meet the established requirements. On account of defective reports submitted from the fourth quarter of 2001 through the fourth quarter of 2003, fines totaling some NIS 1.4 million were imposed. The two companies that were fined most frequently, and hence in the highest amounts, are ILDC and Ayalon. Compulsory Vehicle Insurance Premiums Letter In March 2003, insurance circular 2003/6 was published. The circular was updated in September 2003, and establishes the supervision policy regarding rates in the compulsory vehicle insurance line. In accordance with the circular, an insurance company must submit rates for approval by the Commissioner of Insurance, and is entitled to sell insurance only at such rates as approved. The circular establishes that the insurance premiums for all vehicles shall not exceed 96% of the insurance premiums in the Pool. 5 In addition, an insurance company is entitled to establish a different rate for fleets comprising more than 40 vehicles, and for collectives comprising more than 100 vehicles, which have a relatively strong bargaining capacity. Once a quarter, each insurance company must report on its agreements with vehicle fleets as stated. The provisions of the circular also address additional aspects. For example, the manner of calculating the rebate for insureds whose policies were cancelled was amended in the insured's favor. Today, in accordance with the provisions of the circular, a person whose vehicle is sold or stolen will receive a rebate calculated proportionately to the period of time in which the policy was valid. Circular on the Recording of Variables in the Annex of the Compulsory Vehicle Insurance Certificate In March 2003, Insurance Circular 2003/8 was published, establishing procedures for the registration of details relating to the variables reported to the insurance company at the time 5. For further information on the Pool, see Section D of the Annual Report of the Commissioner of Capital Market, Insurance and Savings for 2001, p ±
18 of issuing a policy for compulsory vehicle insurance in the annex to the insurance certificate. One of the goals of this change was to improve the quality of data in the compulsory vehicle insurance line. The circular permits the insurance company to include with the insurance certificate an annex noting the details of the driver as reported by the insured to the insurance company. Financial Reimbursement for Insureds in Avner On the cancellation of compulsory vehicle insurance policies, insureds are entitled to a financial reimbursement comprising several components. Insureds who cancelled the compulsory insurance for their vehicle during the period between January 1996 and June 2000 for various reasons (such as theft or vehicle replacement) did not receive the full financial reimbursement to which they were entitled from the insurance company. The reimbursement should have included, among other components, part of the amount collected from the insureds and transferred to the Ministry of Transport fund as required by law, but, for various reasons, this was not repaid to the insureds and the money was held by Avner. During the said period, Avner accumulated a total of NIS 35 million, which should have been included in repayments to the insureds. After work on the headquarters level to locate insureds eligible for reimbursement, during the second half of 2003, insureds eligible for reimbursement were sent checks by mail. Through August 2003, 255,000 insureds eligible to reimbursement in the total amount of NIS 13 million were identified and received checks in amounts ranging from NIS 11 to NIS 250. All amounts transferred to the insureds eligible for reimbursement included linkage increments to the CPI and interest at a rate of 4% annually. By April 31, 2004, checks in the total amount of approximately NIS 11 million were cashed. Table D-6 Eligibility for Reimbursement by Avner to Insureds, December 2003 Reimbursement amount (NIS) to insured No. of insureds Total reimbursement (NIS) Up to NIS ,038 3,108,639 NIS ,456 9,123,216 NIS 151 and above 5,759 1,100,029 Total 225,253 13,331,884 ±
19 The Capital Market, Insurance and Saving Division 4. Changes in Comprehensive Vehicle Insurance Policies and Rates Modular Policy The policy for insurance against property damage and third party property damage for a private vehicle and for a commercial vehicle weighing up to 4 tons, excluding motorcycles (compulsory and third party insurance) is defined in the Inspection of Insurance Business Regulations (Conditions of Contract for Insurance of a Private Vehicle), (hereinafter the standard policy ). The standard policy establishes a format and minimum conditions for comprehensive insurance for a vehicle, which may be amended by the insurance company only if the amendment is in the insured's favor. Extensions may be added to the standard policy in terms of the scope of coverage, risks, liabilities and property of the insured. In September 2003, as part of the process of liberalization in the insurance industry in general, and in vehicle insurance in particular, the Minister of Finance published an amendment to the regulations with the principle purpose of introducing a more flexible structure for the policy. As of May 1, 2004, and insured may choose between the following four possibilities: 1. Comprehensive insurance (also including third party insurance) 2. Comprehensive insurance without coverage against theft 3. Comprehensive insurance without coverage against accidents 4. Third party insurance only Until now, an insured could only purchase full comprehensive insurance for his vehicle or third party insurance only. The change allows vehicle owners flexibility in choosing the appropriate coverage. For example, those who believe that the chance of their vehicle being stolen is remote may waive coverage against theft, while those who believe that their chances of being involved in an accident are remote may waive coverage against accidents. The difference in the rates for the various types of coverage may amount to tens of percent, and varies from company to company according to the data for the insured vehicle and driver. The default option for a person purchasing a policy is comprehensive insurance including all coverage. The insured may waive one of the types of coverage noted above during the insurance proposal stage, provided that this is done through an explicit notification documented in the insurance company. In addition to the flexible structure of the policy, further changes were also made to the standard policy: ±
20 Possibility to exclude vehicle fleets from the standard policy bodies owning large fleets of vehicles may evaluate their own insurance needs, and do not require the protection of a standard policy. Fleets of 40 or more vehicles may now waive the applicability of the standard policy and establish such conditions as they see fit. Insurance coverage for the means of protection of the vehicle following complaints from the public received by the Office of the Commissioner of Insurance, it emerged that there was a lack of clarity regarding the scope of insurance coverage for means of protection installed in a vehicle in accordance with the requirement of the insurance company. The amendment stated that an insurance company that requires the insured to install means of protection in his vehicle must indemnify the insured on account of damage caused to the means of protection it required. Insurance coverage for a vehicle on account of damage from snow and hail the Commissioner of Insurance received various complaints suggesting a lack of clarity among insurance companies and insureds regarding coverage against damage caused to a vehicle by snow and hail. Accordingly, it was specifically stated that the standard vehicle insurance policy includes coverage on account of these risks. Total loss according to the standard policy, a vehicle that is unusable, and the direct damage to which is more than 60% of the value of the vehicle, including taxes, is considered a total loss and the insured receives the full value of the vehicle. In the past, only damage of 75% was considered total loss. A further amendment to the standard policy is that if the vehicle is damaged at a rate in excess of 50% of its value (as opposed to 2/3 in the past), the insurance company may declare the vehicle to be an effective total loss and reimburse the insured for the full value of the vehicle (as in the case of total loss). Claims report at the end of every year, the insurance company must send the insured a claims report stating whether the insured has sued the insurance company over the past three years. The amendment stated that the coverage in each insurance year (full comprehensive, comprehensive without accident, comprehensive without theft and third party) must also be noted. In addition to the above amendments, based on the amendment of the Regulations, the policies and rates of the insurance companies active in the line was examined and amended. Changes were introduced in the policies, in the extensions to the policies, in the letters of service attached thereto, in the insurance proposal form and in the insurance details sheet ( the list ). The following are the principal changes: ±π