Call for cap on compensation

The Hellenic Association of Insurance Companies (EAEE) urged the government on Wednesday to impose a ceiling on compensation awarded to traffic accident victims, as an absence of such a mechanism has encouraged the appearance of rackets exploiting the latter.

EAEE president Giorgos Kotsalos also said the phenomenon has created a serious viability problem for the insurers? common auxiliary compensation fund, Epikouriko, whose deficit has risen to more than 700 million euros.

According to Epikouriko head Dimitris Zorbas, payments of over 100,000 euros (which represent 1.2 percent of the total number of claims), absorb more than 50 percent of its funds. EAEE charges that there have been instances where lawyers have basically pilfered large amounts of high compensation sums intended for families of victims insured by firms whose license was revoked in the meantime.

Kotsalos said Epikouriko is facing an ?explosive? liquidity problem and called for a ceiling of 100,000 euros per claim. Such payments rose by nearly 400 percent between 2005 and 2009, EAEE said.

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