Reinsurance of Third Party Motor Insurance and Motor Insurance in Finland

The need and extent of reinsurance of third party motor insurance depends fundamentally on the risk limits prescribed in the legislation of the country in question (and on the other hand the legal limits of the compulsory insurance may have been fixed with regard to the reasonable possibilities of the insurers getting reinsurance). There are two kinds of risk limits which are applied in different countries: total limits and individual limits. The former defines the maximum joint indemnity for an accident, paid to all claimants together, and the latter defines the maximum indemnity paid to each claimant separately. From the social point of view limits of this sort are not expedient, especially in regard to physical injuries. Owing to this total limit the indemnity for a single claimant can depend on the number of other claimants, which is quite inadequate from the point of view of the actual need to get insurance cover for injuries.