FSA mandates insurers to maintain minimum EV insurance share in motor insurance portfolios

The Financial Services Authority (FSA) has issued a circular to all insurance companies licensed to provide motor insurance, mandating the maintenance of a minimum level of underwriting for electric vehicles (EVs) in proportion to the size of their respective motor insurance portfolios. The circular stipulates that the minimum share of EV insurance underwriting must not be less than 0.2% of the total motor insurance portfolio and sets 31 December 2026 as the deadline for compliance.

The circular reflects the FSA's regulatory role in enhancing confidence in the insurance sector and ensuring the availability of appropriate insurance coverage that keeps pace with rapid market developments. It also underscores the FSA's role in protecting customer interests and enhancing insurance coverage in line with developments in the automotive market and the transition towards clean energy.

To enable continuous monitoring and identify any challenges that insurance companies may face in achieving the minimum EV insurance threshold, the circular requires insurers to submit monthly reports detailing their underwriting performance. It also mandates the introduction of a dedicated code or classification for electric vehicles within companies' electronic systems and databases. This will facilitate the tracking of insurance policies and claims related to electric vehicles and support the generation of accurate data and statistics, including underwriting figures, premiums, claims, compensation payments, and loss ratios.

This circular comes in line with the FSA's commitment to ensuring the availability of insurance coverage for EV owners, the FSA has called on all insurance companies to comply with the provisions of the circular and avoid being considered in breach of its requirements.