The Government of the Federation of BiH, at its session held on 21.12.2017. in Sarajevo, established a Draft Law on Compulsory Insurance in traffic and submitted it to a regular parliamentary procedure.

One of the reasons for the adoption of this law is deregulation and liberalization of the price of compulsory liability insurance for vehicles, with the aim of preserving the stability and uninterrupted functioning of the insurance sector. The implementation of the current Act in this area, adopted in 2005, has shown shortcomings that hamper its implementation. Also, practice has shown that certain solutions are unclear and imprecise and lead to legal uncertainty.

The new regulation brings about harmonization in the single insurance market throughout BiH, as the Republika Srpska passed a new law in 2015 and the Steering Board of the Insurance Agency in BiH on October 4, 2016 adopted a guideline for assessing the compliance of entity Laws on Compulsory Insurance in traffic .

An additional reason is also the harmonization with the legislation and acquis communautaire of the European Union, which is also a commitment from the Stabilization and Association Agreement.

The Compulsory Insurance Contract covers claims occurring on the territory of BiH, on the territory of the member states of the Green Card System, and the States Parties to the Multilateral Agreement, in the event that this Agreement has been signed with BiH.

(Source: http://www.fbihvlada.gov.ba)