Methodology for Calculating and Applying Base Insurance Premiums and Adjustment Coefficients for Compulsory Motor Vehicle Liability Insurance

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REGISTERED: Ministry of Justice of the Republic of Moldova No 1801 of 22 June 2023 Minister _____________ Veronica MIHAILOV-MORARU

Pe - the estimated risk premium for compulsory internal MTPL insurance, calculated according to the paragraph 13; f – the share of the loading factor in the base insurance premium relating to the expenses and profit margin of the insurance undertaking for compulsory internal MTPL insurance, expressed as a percentage and determined according to paragraph 45; β – the share of the loading factor in the base insurance premium relating to the bonus-malus system, expressed in percentages and determined according to paragraph 11. (β) shall be determined according to the formula: (i=M,1,…,17); Pi - the number of insurance policies underwritten for compulsory internal MTPL insurance for the last calendar year used to calculate the base insurance premium and the adjustment coefficient. The base insurance premium for compulsory external MTPL insurance for a transport unit for a period of 12 months shall be calculated according to the formula: Pb - the base insurance premium for compulsory external MTPL insurance; Pe - the estimated risk premium for compulsory external MTPL insurance, calculated according to paragraph 13; f – the share of the loading factor in the base insurance premium relating to the expenses and profit margin of the insurance undertaking for compulsory external MTPL insurance, expressed as a percentage and determined according to paragraph 46. The estimated risk premium shall be determined as the sum of the pure premium and the risk margin, taking into account the inflation rate, according to the formula: Pe – estimated risk premium; Pp – pure premium; Pm – risk margin; Ri – inflation rate. The pure premium shall be determined as the product of the claim frequency and the estimated average loss, according to the following formula:

DP - the amount of claims paid during the calculation period, including the amount of large claims; n = np + nd np - number of claims paid on policies at risk, including the number of large claims paid; nd - the number of claims reported but not settled at the end of the last calculation year on policies exposed to risk, including the number of large claims reported but not settled; N - the number of policy-years at risk, calculated as the ratio of the total number of days on policies that are valid in the policy year to 365 days. exp (X) - value of exponential function at the point μ - the average amount of claims paid, which shall be determined according to the formula:

Di - the amount of the damage paid in respect of the insured event i, without taking into account the amounts relating to large claims; m - the number of insured cases paid, without taking into account the number of large claims; S2 – variation, which shall be determined according to the formula: Development table – Paid claims Year of origin (i) Development year (j) 1 2 3 … n-2 n-1 n 1 d1;1 d1;2 d1;3 … d1;n-2 d1;n-1 d1;n 2 d2;1 d2;2 d2;3 … d2;n-2 d2;n-1 3 d3;1 d3;2 d3;3 … d3;n-2 … … … … … … … … n-2 dn-2;1 dn-2;2 dn-2;3 … n-1 dn-1;1 dn-1;2 … n dn;1 … d(i,j) - the amounts of claims paid during the development years (j) and related to insured cases occurring during the years of origin (i).

1. the amount of the claim shall be determined for each year of origin, the cumulative data being presented according to the development table below: Development table – cumulative paid claim Year of origin (i) Development year (j) 1 2 3 … n-2 n-1 n 1 D1;1 D1;2 D1;3 … D1;n-2 D1;n-1 D1;n 2 D2;1 D2;2 D2;3 … D2;n-2 D2;n-1 3 D3;1 D3;2 D3;3 … D3;n-2 … … … … … … … … n-2 Dn-2;1 Dn-2;2 Dn-2;3 … n-1 Dn-1;1 Dn-1;2 … n Dn;1 …

Development table – Claims declared but not settled Year of origin (i) Development year (j) 1 2 3 … n-2 n-1 n 1 R1;1 R1;2 R1;3 … R1;n-2 R1;n-1 R1;n 2 R2;1 R2;2 R2;3 … R2;n-2 R2;n-1 3 R3;1 R3;2 R3;3 … R3;n-2 … … … … … … … … n-2 Rn-2;1 Rn-2;2 Rn-2;3 … n-1 Rn-1;1 Rn-1;2 … n Rn;1 … R(i,j) - the amounts of reserves for declared but unsettled claims outstanding at the end of the development years period relating to insured cases arising during the years of origin period. Development table – Claims incurred Year of origin (i) Development year (j) 1 2 3 … n-2 n-1 n 1 X1;1 X1;2 X1;3 … X1;n-2 X1;n-1 X1;n 2 X2;1 X2;2 X2;3 … X2;n-2 X2;n-1 3 X3;1 X3;2 X3;3 … X3;n-2 … … … … … … … … n-2 Xn-2;1 Xn-2;2 Xn-2;3 … n-1 Xn-1;1 Xn-1;2 … n Xn;1 … X(i,j) = D(i,j) + R(i,j) Development table – estimated claims Year of origin (i) Development year (j) 1 2 3 … n-2 n-1 n 1 X1;1 X1;2 X1;3 … X1;n-2 X1;n-1 X1;n 2 X2;1 X2;2 X2;3 … X2;n-2 X2;n-1 Y2;n 3 X3;1 X3;2 X3;3 … X3;n-2 Y3;n-1 Y3;n … … … … … … … … n-2 Xn-2;1 Xn-2;2 Xn-2;3 … Yn-2;n-2 Yn-2;n-1 Yn-2;n n-1 Xn-1;1 Xn-1;2 Yn-1;n-3 … Yn-1;n-2 Yn-1;n-2 Yn-1;n n Xn;1 Yn;2 Yn;3 … Yn;n-2 Yn;n-1 Xn;n r1;2 r2;3 … rn-3;n-2 rn-2;n-1 rn-1;n

α(g) - the safety coefficient, based on the normal probability distribution g, with which the results are guaranteed (according to the Gauss-Laplace table); Pp – pure premium; q – claims frequency; V – coefficient of variation of total damage. Nh - the number of policy-years at risk for the following year for which the base insurance premium is calculated and determined according to the formula: t – 5,6, ... , n (previous period on the basis of which the number of policy-years at risk is estimated).

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• estimated average loss. ADJUSTMNET COEFICIENTS FOR COMPULSORY DOMESTIC MTPL INSURANCE Risk factors Coefficient Category of the vehicle K1 Territory of use of the vehicle K2 Legal status of the insured K3 Age and length of driving experience of the insured person K4 Place of registration of the vehicle K5 Insurance term K6 a) vehicle: with an engine cylinder capacity up to 1 200 cm3 with an engine cylinder capacity between 1 201 and 1 600 cm3 with an engine cylinder capacity between 1 601 and 2 000 cm3 with an engine cylinder capacity between 2 001 and 2 400 cm3 with an engine cylinder capacity between 2 401 and 3 000 cm3 inclusive with an engine cylinder capacity over 3 000 cm3 taxi (only for legal entities) electric vehicles b) vehicles intended for the carriage of passengers: up to 17 seats, including the driver’s seat from 18 to 30 seats, including the driver’s seat over 30 seats trolleybuses

c) road tractors with engine power: up to and including 45 HP from 46 HP up to and including 100 HP over 100 CP d) trucks and vehicles other than those referred to in (a) to (c) whose maximum authorised mass is: up to 3 500 kg between 3 501 and 12 000 kg inclusive over 12 000 kg e) motorcycles: up to and including 300 cm3 over 300 cm3 Legal status of the insured Individuals Legal entities, individuals engaged in entrepreneurial activity, other legal entities, with the exception of legal persons engaged in taxi and trolleybus services Age and length of service Age up to and including 23 years and driving experience up to and including 2 years Age up to and including 23 years driving experience of over 2 years Age over 23 years and driving experience up to and including 2 years Age over 23 years and driving experience of over 2 years Term of insurance

1 month 2 months 3 months 4 months 5 months 6 months 7 months 8 months 9 months 10 months and over 0,15 0,3 0,4 0,5 0,6 0,7 0,8 0,85 0,9 1 Pa = Pb × K1 × K2 × K3 × K4 × K6 × Kbm× Kgc × Kdd Pa - insurance premium; Pb – base insurance premium; K – adjustment coefficient (K4 – shall be applied for individuals, Kgc and Kdd – shall be applied according to paragraph 35). Pa = Pb × K1 × K5 × K6 Risk factors Coefficient Vehicle category K1v Insurance term K2v

Category of vehicle Vehicle category code according to Council Regulations of the Bureaux of the International “Green Card” Insurance System vehicles A motorcycles B trucks with a total mass up to 3.5 tonnes C1 trucks and tractors with a total mass exceeding 3,5 tonnes C2 vehicles used for the carriage of passengers with up to 17 seats, including the driver E1 vehicles used for the carriage of passengers and comprising more than 17 seats E2 Term of insurance Insuranc e area 15 day s 1 mont h 2 month s 3 month s 4 month s 5 month s 6 month s 7 month s 8 month s 9 month s 10 month s and more Area 1 0,15 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,85 0,9 1 Area 2 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,85 0,9 1 Area 3 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,85 0,9 1 Pa = Pb * K1v × K2v, Pa – insurance premium; K – adjustment coefficient.

MTP L polic y num ber Period of insura nce stated in the MTPL policy Insura nce premi um receive d, MDL Vehicl e categ ory (K1) Data on the residence/ legal address of the insured person (K2) Legal status/Nat ural or legal person (K3 ) Age and length of driving experie nce of the insured person (K4) Place of vehicle registra tion (K5) The applied bonus￾malus coeffici ent Termin ated contract Termina tion date Fro m t o 1 2 3 4 5 6 7 8 9 10 11 12 Total X INFORMATION on claims paid on domestic MTPL contracts Numb er of the claim file MTP L policy numb er Date of accide nt Date of dama ge repor t (for the first time) Date of payment of compensat ion Amount of compensat ion paid, MDL Vehicl e catego ry (K1) Details of the residence/l egal address of the insured person (K2) Legal status / Natur al or legal perso n (K3) Age and length of driving experie nce of the insured person (K4) Place of registrat ion of the vehicle (K5 ) 1 2 3 4 5 6 7 8 9 10 11 Total X INFORMATION on the value of claims declared but not settled on internal MTP contracts Numbe r of the claim file MTPL policy numbe r Date of accident s Date of damag e report (for the first time) Estimated amount of declared but unsettled claims outstandin g at the end of the year, MDL Vehicle categor y (K1) Details of the residence/leg al address of the insured person (K2) Legal status/ Natur al or legal person (K3 ) Age and length of driving experienc e of the insured person (K4) Place of registratio n of the vehicle (K5) 1 2 3 4 5 6 7 8 9 10

Total X Vehicle category Code a) vehicles: with an engine cylinder capacity up to 1 200 cm3 11 with an engine cylinder capacity between 1 201 and 1 600 cm3 12 with an engine cylinder capacity between 1 601 and 2 000 cm3 13 with an engine cylinder capacity between 2 001 and 2 400 cm3 14 with an engine cylinder capacity between 2 401 and 3 000 cm3 inclusive 15 with an engine cylinder capacity over 3 000 cm3 16 taxi (for legal entities only) 17 electric vehicles 18 b) vehicles intended for the carriage of passengers: up to 17 seats, including the driver’s seat 21 from 18 to 30 seats, including the driver’s seat 22 over 30 seats 23 trolleybuses 24 c) road tractors with engine power: up to and including 45 HP 31 from 46 HP to 100 HP inclusive 32 over 100 CP 33 d) lorries and vehicles other than those referred to in (a) to (c) whose maximum authorised mass is:

up to 3 500 kg 41 between 3 501 and 12 000 kg inclusive 42 over 12 000 kg 43 e) motorcycles: up to and including 300 cm3 51 over 300 cm3 52 f) trailer 61 Domicile/legal address of the insured person Code municipality of Chisinau, Hânceşti, Orhei, Străşeni, Ialoveni, Anenii Noi and Criuleni districts 1 other places 2 Legal status of the holder Code individuals 1 legal entities, individuals – entrepreneurs, other legal entities, except the legal persons operating taxi and trolleybus services 2 legal persons operating taxi and trolleybus services 0 Code age up to and including 23 years old and driving experience up to and including 2 years 1 age up to and including 23 years old and driving experience of over 2 years 2 age over 23 years old and driving experience up to and including 2 years old 3 Age over 23 years old and driving experience over 2 years 4 legal persons* 0 Place of registration of the vehicle Code The Republic of Moldova 1 Outside of the Republic of Moldova 2 For terminated contracts YES For contracts not yet terminated NO

The applied bonus-malus coefficient is indicated depending on the bonus-malus class applied at the date of conclusion of the insurance contract: Bonus – malus class M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 INFORMATION on compulsory external MTPL insurance certificates Green Card certificate number Insurance area Policy end date Duration of insurance indicated in the "Green Card" certificate Insurance premium received Vehicle category (K1) Terminated contract Termination date from to MDL Euro 1 2 3 4 5 6 7 8 9 10 Total X INFORMATION on claims paid on compulsory external MTPL insurance contracts Green Card certificat e number Duration of insurance indicated in the Green Card Place of accident, insuranc e area Countr y where the accident took place Date of acciden t Date of damag e report Date of payment of compensatio n Amount of compensatio n paid Vehicle categor y MDL Euro

certificat e From To 1 2 3 4 5 6 7 8 9 10 11 Total X INFORMATION on the amount of claims declared but not settled on compulsory external MTPL insurance contracts Green Card certificate number Duration of insurance indicated in the Green Card Place of accident, insurance area Country where the accident took place Date of accident Date of damage report Estimated amount of declared but unsettled claims outstanding at the end of the year Vehicle category from to MDL Euro 1 2 3 4 5 6 7 8 9 10 Total X

Vehicle category Code Vehicles A Lorries with a total mass up to 3.5 tonnes C1 Lorries and tractors with a total mass exceeding 3,5 tonnes C2 Vehicles used for the carriage of passengers with up to 17 seats, including the driver E1 Vehicles used for the carriage of passengers and comprising more than 17 seats E2 Motorcycles B Trailers F towed by vehicles (group A) F A towed by trucks (group C1 and C2) F C towed by minibuses and buses (group E1 and E2) F E