The conversion from Maltese lira to euro is proving to be of benefit to motor insurance policyholders and insurance customers in general as prices for motor insurance products remain stable. In fact, motor insurers are following the conversion guidelines in accordance with NECC Guideline 0004/06 as recommended by The Malta Insurance Association, an outline of which is being provided hereunder. In the following list, one can easily notice that the interests of policyholders determine the principles at the heart of these guidelines. For instance, the guidelines clearly stipulate that none of the premia are to be boosted as a result of the Euro conversion.

The Malta Insurance Association has therefore recommended the following:

1. Policy premia have been converted to the nearest euro cent with no difference in price.

2. In the past, it was common practice for policyholders to round the value of their risks (sum insured) for insurance purposes. Vehicles were valued in multiples of hundreds or thousands of liri. Motor insurers are religiously converting these values into euros without any change except where expressly demanded by policyholders. The latter may sometimes find it convenient to round figures even when it comes to euros, but it is a matter of his/her choice.

3. Document duty has been converted at the established rate without any rounding or smoothing whatsoever; the euro cents in the converted figure are to be retained unamended. The standard 10 per cent rate is being applied to the policy’s premium in euro.

4. The current practice for the hire of replacement cars is that the majority of market players offer a maximum of e582.34 (Lm250). However, some insurers may decide to raise cover (at no additional expense to policyholders) to e600.00 (Lm257.58).

5. Any convenience smoothing should not affect contractual conditions (without the policyholder’s consent), and will apply only at the renewal of existing policies.