The Financial Services Authority has  issued a circular to all chief executive officers and general managers of insurance and Takaful companies stressing the importance of compliance with the Motor Vehicle Insurance Law in that they may not refuse insuring electric vehicles or renewal as far as the vehicle satisfies the stipulations stated in the Traffic Law.

The move comes in view of observations the FSA received about the refusal of some insurance companies to provide insurance coverage for electric vehicles which is breach of Article (2) (b) of the Motor Vehicles Insurance Law promulgated by Royal Decree No.  34/94, which provides that insurers may not refuse insuring or renewing the insurance for vehicles satisfying the stipulations of the Traffic Law.

FSA emphasized that the compulsory insurance includes all vehicles including electric vehicles with no exclusion and urged the companies to address the technical issues such as availability of spare parts through underwriting and pricing policies without prejudice to the beneficiary’s right to obtain insurance coverage and may resort to cash compensation in the event of lack of spare parts and specialized garages for such type of vehicles.

The circular was issued within the context of FSA’s role in protecting the rights of policyholders and enhancing transparency and compliance in the insurance market as well as coping with the global trends in the transport and energy industry and insurance sustainability.