OFFICIAL TRANSLATION REPUBLIC OF LITHUANIA LAW ON COMPULSORY INSURANCE AGAINST CIVIL LIABILITY IN RESPECT OF THE USE OF MOTOR VEHICLES 14 June 2001 No IX-378 Vilnius (A new edition of 5 March 2004 - No IX-2041) CHAPTER ONE GENERAL PROVISIONS Article 1. Objective and Purpose of the Law 1. The Law on Compulsory Insurance against Civil Liability in Respect of the Use of Motor Vehicles has the objective of establishing the legal framework and principles for the functioning of the system of compulsory insurance against civil liability in respect of use of motor vehicles. 2. The provisions of this Law shall not apply where motor vehicles are used for sport competitions, for practicing, for exhibitions, for driving training in restricted areas and in autodromes. 3. The Law shall not apply with respect to motor vehicles which belong to military units and are used by them, by military personnel or by civil servants assigned to military forces if all of the following conditions are satisfied: 1) military forces, military personnel and civil servants assigned to military forces enter from other states that are, together with the Republic of Lithuania, parties to international treaties regarding the status of forces; 2) an international treaty of the Republic of Lithuania establishes a procedure of compensation for damage which is different from that laid down in this Law; 3) military forces, military personnel and civil servants assigned to military forces are allowed to enter the Republic of Lithuania in accordance with the procedure established in the legal acts of the Republic of Lithuania. 4. The damage caused by motor vehicles listed in paragraph 3 of this Article in the territory of the Republic of Lithuania shall be compensated in accordance with the procedure established in international treaties of the Republic of Lithuania and in the legal acts of the Republic of Lithuania. 5. The provisions of this Law shall implement the legal acts of the European Union listed in the Annex to this Law. Article 2. Definitions 1. “Insured vehicle” means a motor vehicle covered by a valid contract of compulsory insurance against civil liability in respect of the use of motor vehicles. 2. “Permanent resident of the Republic of Lithuania” means a citizen of the Republic of Lithuania, a citizen of another state or a person without citizenship whose data on his place of residence in the Republic of Lithuania has been entered in the population register of the Republic of Lithuania or who is acknowledged, in accordance with the Civil Code of the Republic of Lithuania and the procedure established in other legal acts, to have permanent residence in the Republic of Lithuania. 3. “Bureau” means the Motor Insurers’ Bureau of the Republic of Lithuania. 4. “Council of Bureaux” means a body which acts as the coordinator of the Green Card system and which groups together all national insurers’ bureaux of the countries that have joined the system. 5. “Policyholder” means a person who has approached the insurer to conclude a contract of compulsory insurance against civil liability in respect of the use of motor vehicles or who has concluded such an insurance contract with the insurer. 6. “Insurer” means a person (an insurance undertaking of the Republic of Lithuania, an insurance undertaking of another Member State of the European Union or a branch of a foreign insurance undertaking established in the Republic of Lithuania) which conducts, in accordance with the procedure established in legal acts, the business of compulsory insurance against civil liability in respect of the use of motor vehicles in the Republic of Lithuania and which is a member of the Bureau. 7. “Insured event” means a road accident which leads to the obligation to pay compensation under this Law. 8. “Member State of the European Union” means the Republic of Lithuania or any other Member State of the European Union. For the purpose of this Law, “Member State of the European Union” shall also mean member countries of the European Economic Area. 9. “Group insurance contract” means a standard insurance contract concluded with the farmers of farms registered in the manner established in the Law on the Farmer’s Farm and with other agricultural economic entities covered by the Law on Agricultural and Rural Development. 10. “Standard insurance contract” means a contract of compulsory insurance against civil liability in respect of the use of motor vehicles concluded with respect to a motor vehicle normally based in the territory of the Republic of Lithuania. 11. “Territory in which the vehicle is normally based” means the territory of the state in which the registration plate of the vehicle is issued; or, in cases where no registration is required for certain types of vehicle, the territory of the state in which an insurance plate or a distinguishing sign analogous to the registration plate is issued. In cases where the vehicle is not registered or where neither a registration plate nor insurance plate nor distinguishing sign is required for certain types of vehicle, the territory of the state in which the user of vehicle is permanently resident is considered as the territory in which the vehicle is normally based. 12. “Compensation” means an amount of money or any other agreed form of payment payable by the insurer or the Bureau to the injured third party to compensate for personal injury, damage to property and (or) non-pecuniary damage. 13. “Another Member State of the European Union” means a Member State of the European Union other than the Republic of Lithuania. 14. “National insurers’ bureau” means a professional organisation which is established in accordance with Recommendation No 5 adopted on 25 January 1949 by the Road Transport Sub-committee of the Inland Transport Committee of the United Nations Economic Commission for Europe and which groups together insurance undertakings which are authorized to conduct the business of compulsory insurance against civil liability in respect of the use of motor vehicles in that state. 15. “Non-pecuniary damage” shall be physical pain, mental suffering, inconveniences, mental shock, emotional depression, humiliation, impairment of reputation, diminution of possibilities to associate with others and other non-pecuniary consequences arising from personal injury or loss of life in a road accident. 16 “Injured third party” means a person who has suffered damage and who is therefore entitled to compensation in accordance with the procedure established in this Law. 17 “Frontier insurance contract” means a contract of compulsory insurance against civil liability in respect of the use of motor vehicles concluded with respect to vehicles that are normally based outside the territory of the Republic of Lithuania. 18. “Supervisory authority” means an authority that exercises supervision of insurance activities in the Republic of Lithuania in accordance with the Law on Insurance of the Republic of Lithuania. 19. “Vehicle” means any motor vehicle the registration of which is required and which is intended for travel on land, but not running on rails, also mopeds, trailers or semi-trailers. 20. “User of vehicle” means a person who owns and/or uses a vehicle on the basis of ownership, trust, rent, loan for use or any other legitimate basis. A natural person who drives a vehicle either legally or illegally shall also be considered as the user of vehicle. 21. “Foreign state” means a state other than a Member State of the European Union. 22. “Internal Regulations” means the rules approved by the Council of Bureaux that regulate the relations between national insurers’ bureaux. 23. “Damage” means damage caused in a road accident or damage that arises later as a consequence of a road accident. 24. “Personal injury” means damage to health and/or damage incurred by loss of life. The size of damage to person shall be assessed in accordance with the procedure established by the law. 25. “Damage to property” means damage to property of the injured third party. The size of damage to property shall be assessed in accordance with the procedure established by the law. 26. “Green Card” means an international certificate of insurance (policy) issued on behalf of a national insurers’ bureau participating in the Green Card system. 27. “Green Card system” means an international system of compulsory insurance against civil liability in respect of the use of motor vehicles. 28. “Compensation body” means a body set up in the manner established by the legal acts of the respective Member State of the European Union which is responsible for compensating injured third parties where a road accident occurs in a Member State of the European Union other than the Member State in which the injured third party is permanently resident or in a foreign state if its national insurers’ bureau is a member of the Green Card system and if the damage is caused by an insured vehicle normally based in the territory of a Member State of the European Union. 29. Other terms in this Law shall be used within the meaning of the Law on Insurance of Republic of Lithuania and the Republic of Lithuania Law on Traffic Safety. Article 3. Compulsory Insurance Cover against Civil Liability in respect of the Use of Motor Vehicles 1. Compensation under this Law shall be paid to cover the damage suffered by injured third parties when the persons who caused the damage with the vehicle owned or used (hereinafter “used”) by them become liable under civil liability. 2. A contract of compulsory insurance against civil liability in respect of the use of motor vehicles (hereinafter referred to as the “insurance contract”) shall provide coverage against civil liability in respect of the use of a vehicle specified in the insurance contract and/or certificate (policy) of compulsory insurance against civil liability in respect of the use of motor vehicles (hereinafter referred to as the “insurance certificate”) for damage, except for the case referred to in paragraph 3 of this Article. 3. Neither the insurer nor the Bureau shall pay compensation in accordance with the procedure established in this Law for damage to the user responsible for the damage or to the vehicle used by him or to the property in the vehicle as well as to other property of the policyholder or the owner of the vehicle concerned. Article 4. Obligation to Conclude an Insurance Contract 1. Vehicles used in the territory of the Republic of Lithuania must be covered by compulsory insurance against civil liability in respect of the use of motor vehicles. A vehicle normally based in the territory of the Republic of Lithuania must be covered by compulsory insurance against civil liability in respect of the use of motor vehicles as long as the vehicle is registered. 2. Responsibility for concluding an insurance contract in accordance with the procedure established in Article 43 of this Law shall fall on the owner of vehicle (hereinafter referred to as the “person responsible for the conclusion of an insurance contract”). Where a person uses a vehicle under a leasing (financial lease) contract or a lease-option contract or under any other similar contract, the responsibility to conclude an insurance contract shall fall on that person. Where the vehicle is co-owned by several persons, the responsibility to conclude an insurance contract shall be joint and several among all the co-owners, unless they agree otherwise. 3. Persons specified in paragraph 2 of this Article may not use an uninsured vehicle nor let other persons use it. CHAPTER TWO INSURANCE CONTRACT Article 5. Types of Insurance Contract Types of insurance contracts shall be as follows: 1) standard insurance contract; 2) frontier insurance contract. Article 6. Conclusion of Insurance Contract 1. A standard insurance contract and a frontier insurance contract shall be concluded in accordance with this Law, the Civil Code of the Republic of Lithuania, the Law on Insurance, standard terms and conditions of an insurance contract approved by the supervisory authority and other legal acts of the Republic of Lithuania, unless otherwise provided in this Law. Insurers who issue Green Cards shall act also in accordance with the Internal Regulations, other legal acts regulating the Green Card system, the decisions of the Council of Bureaux and shall take into account the terms and conditions of the agreements concluded between the Bureau and the national insurers’ bureaux of other states. 2. Insurers shall conclude insurance contracts with persons specified in paragraph 2 of Article 4 of this Law who have submitted application in person or through their representatives and have presented all the required information and documentation necessary for the conclusion of a contract. A refusal by the insurer to conclude an insurance contract may be contested in court. 3. Before concluding an insurance contract, the policyholder must provide the insurer with correct information requested by the latter and the documents necessary for the conclusion of an insurance contract. The insurer shall have the right to verify that the submitted information is accurate and correct. 4. A standard insurance contract shall be concluded where the vehicle is normally based in the territory of the Republic of Lithuania. A standard insurance contract shall be concluded before the registration of the vehicle, unless the vehicle concerned is already covered by insurance. Where no registration is required for a vehicle, an insurance contract may be concluded before the vehicle is put to use. 5. Where a standard insurance contract is concluded before the registration of the vehicle, the insurer shall, after having received the policyholder’s application and other documents necessary for the conclusion of an insurance contract, issue an insurance certificate without indicating the vehicle registration number, unless the registration number is known. The policyholder shall submit the insurance certificate to the body responsible for the registration of vehicles. The body responsible for the registration of vehicles shall enter the registration number into the insurance certificate presented by the policyholder and shall notify the insurer thereof within 3 working days in writing or any other equivalent form. 6. Should the policyholder wish to have, under a concluded or to be concluded standard insurance contract, insurance coverage in foreign states participating in the Green Card system, the insurer shall additionally issue a Green Card to the policyholder according to the terms and conditions of the insurance contract. 7. A group insurance contract shall be concluded with respect to several vehicles to be covered by a single insurance certificate. A group insurance contract may be concluded with respect to five vehicles at the most, with only one of them being a passenger car. A group insurance contract shall be subject to all the terms and conditions applied to a standard insurance contract as provided in this Law. 8. A frontier insurance contract shall be concluded where the user intends to participate in the road traffic of a Member State of the European Union with a vehicle that is normally based outside the territory of the Republic of Lithuania if the user of such vehicle does not have any other contract of compulsory insurance against civil liability in respect of the use of motor vehicles valid in the Republic of Lithuania. 9. All declarations and notifications by the parties to the insurance contract in relation to the insurance contract shall be made in writing. Should the address of the policyholder’s place of residence or establishment change and should the policyholder fail to notify the insurer thereof, any declarations and notifications sent by the insurer to the policyholder’s last known address by registered mail shall be deemed to be delivered to the policyholder. 10. The user shall not have the right to conclude several concurrently valid contracts of compulsory insurance against civil liability in respect of the use of motor vehicles with respect to one and the same vehicle. Where several insurance contracts have been concluded, the original insurance contract shall terminate as from the moment when a new one concluded with respect to the same vehicle comes into force. During the period of validity of an insurance contract, the insurer may not conclude another insurance contract with the same insurance coverage for the same or overlapping period. 11. The text of the insurance contract and the data indicated in the insurance certificate as required by subparagraphs 1-10 of paragraph 1 of Article 6.991 of the Civil Code shall be typed. Insurance certificates have to be filled in with the data from the database of compulsory insurance against civil liability in respect of the use of motor vehicles. Article 7. Termination and Expiry of Insurance Contract 1. The policyholder shall have the right to terminate a standard insurance contract by giving the insurer a written notice at least 15 days prior to the desired termination date. When the request to terminate an insurance contract is made on the basis of failure by the insurer to execute or properly execute the insurance contract, where such failure is a material breach of contract as determined in accordance with Article 6.217 of the Civil Code, the insurance contract shall terminate as from the date indicated in the policyholder’s request. In both cases, the policyholder shall be reimbursed for the portion of the insurance premium related to the remaining period of validity of the insurance contract. 2. A standard insurance contract may be terminated at the insurer’s initiative on the basis of failure by the policyholder to execute or properly execute the insurance contract where such failure is a material breach of contract. In this case, the policyholder shall not be reimbursed for the insurance premium, unless otherwise provided in the insurance contract. 3. A frontier insurance contract may be terminated at the initiative of any party on the basis of failure by the other party to execute or properly execute the insurance contract where such failure is a material breach of contract. Where the insurance contract is terminated at the policyholder’s request, the policyholder shall be reimbursed for the portion of the insurance premium related to the remaining period of validity of the insurance contract. Where the insurance contract is terminated at the insurer’s request, the policyholder shall not be entitled to such reimbursement. Article 8. Change of Owner of Insured Vehicle 1. Where the owner of an insured vehicle changes, the policyholder must forward the documents certifying the conclusion of an insurance contract to the new owner of vehicle. In this case, the new owner of the vehicle shall take over the policyholder’s rights and obligations under the insurance contract and shall, without delay but not later than within 15 days of transfer of vehicle ownership, notify the insurer in writing thereof and submit his personal data. If the new owner of the vehicle fails to notify the insurer about the transfer of vehicle ownership, the insurer may treat it as failure to fulfil the obligation of notifying about the change of insurance risk. The new owner of the vehicle shall also have the right to terminate the insurance contract in accordance with the procedure established in paragraph 2 of this Article. 2. If the new owner of the vehicle terminates the insurance contract within 15 days of acquisition of the vehicle, the insurance contract shall terminate after 15 days of acquisition of the vehicle, unless the policyholder and the insurer agree otherwise. In this case, the new owner of the vehicle shall be reimbursed for the portion of the insurance premium related to the remaining period of validity of the insurance contract. 3. If the new owner of the vehicle does not terminate the insurance contract within the period specified in paragraph 2 of this Article, the insurer shall have the right to increase the insurance premium on the basis that the insurance risk has increased whereas the policyholder shall have the right to request to reduce the insurance premium on the basis that the insurance risk has decreased. 4. The provisions of this Article shall also apply in situations where, after the death of the policyholder, the vehicle is transferred to another legitimate user. The new user of vehicle must notify the insurer in writing thereof and submit his personal data. Article 9. Entry into Force and Period of Validity of Insurance Contract 1. The insurance contract shall come into force upon the conclusion thereof and subject to the payment of insurance premium for the period indicated in the insurance certificate, except in the cases referred to in paragraphs 2 and 3 of this Article. 2. Where the insurer has indicated in the insurance contract a later date for the payment of insurance premium, the insurance contract shall come into force on the date of conclusion thereof. 3. The insurance contract may specify a date of entry into force of the insurance contract other than indicated in paragraphs 1 and 2 of this Article where, on the date of conclusion of the insurance contract, there already exists a valid insurance contract for the same vehicle. 4. A standard insurance contract shall be concluded for a term of twelve months. The insurer shall issue to the policyholder an insurance certificate certifying the conclusion of an insurance contract and the provision of insurance coverage. The insurance certificate shall also indicate its period of validity which shall not be shorter than 1 month and for which the insurance premium has been paid. During the period of validity of the insurance contract, several insurance certificates may be issued. 5. During the period of validity of the insurance contract, the insurer, at the policyholder’s request, shall release the policyholder from the obligation to pay insurance premiums under a valid insurance contract where the policyholder intends not to use the vehicle for a period longer than 1 month. The policyholder must provide assurance to the insurer that he will not use or let other persons use the vehicle specified in the insurance contract and may place, free of charge, the vehicle registration plate into the custody of the insurer. The period of release from the obligation to pay insurance premiums shall terminate as soon as the insurer issues a new insurance certificate at the policyholder’s request. Where an insurance premium is nevertheless paid for a period in respect of which the policyholder is released from the obligation to pay insurance premiums, the insurer shall extend the insurance contract by that period without requesting any additional premiums for that period. Where the policyholder is released from the obligation to pay insurance premiums, the insurer shall record it in the insurance certificate. 6. If, after the expiry of the validity of the insurance certificate as indicated therein, a new insurance certificate is not issued and a release from the obligation to pay insurance premiums has not been agreed between the policyholder and the insurer, the policyholder shall pay insurance premiums in the manner provided for in the insurance contract until the expiry of the insurance contract. 7. Upon the expiry of a standard insurance contract, its validity period shall be extended subject to the procedure and conditions established in the insurance contract. 8. The validity period of a standard insurance contract shall not be extended if: 1) there is an outstanding insurance premium due for previous periods under a valid insurance contract; 2) the insurer has lost the right to conduct the business of compulsory insurance against civil liability in respect of the use of motor vehicles. 9. Where the validity period of a standard insurance contract is extended, the policyholder must pay the insurer an insurance premium as calculated by the insurer. In the case of failure to pay the insurance premium, the provisions of paragraphs 5-7 of Article 11 of this Law shall apply. 10.  A frontier insurance contract shall be concluded for a period not shorter than 15 days and not longer than 90 days. 11. A Green Card shall be issued for a period not shorter than 15 days and not longer than 12 months. Article 10. Territorial Coverage of Insurance Contract 1. A standard insurance contract and a frontier insurance contract shall provide insurance coverage in any Member State of the European Union to the extent required by the legal acts of the respective Member State of the European Union regulating compulsory insurance against civil liability in respect of the use of motor vehicles or to the extent required by this Law, whichever is higher. A standard insurance contract under which a Green Card has been issued shall also provide insurance coverage in the foreign states indicated on the Green Card. 2. A standard insurance contract and a frontier insurance contract shall also be valid and shall provide insurance coverage in Switzerland in accordance with the Swiss laws. A standard insurance contract shall also provide insurance coverage under this Law for any damage suffered by injured third parties, permanently resident in a Member State of the European Union, during a direct journey between two territories in which the Treaty establishing the European Community is in force, if there is no national insurers’ bureau responsible for the territory which is being crossed. 3.  Contracts of compulsory insurance against civil liability in respect of the use of motor vehicles concluded by the insurance undertakings or branches of other Member States of the European Union shall be recognised in the Republic of Lithuania and shall be deemed to be in compliance with the provisions of this Law. 4. A Green Card shall be valid and shall provide insurance coverage in the states indicated on the Green Card, unless the insurer and the policyholder agree otherwise, in accordance with the legal acts of these states. Article 11. Sums Insured and Insurance Premiums 1. The sum insured under compulsory insurance against civil liability in respect of the use of motor vehicles shall be 500 000 euros for personal injury (including 500 euros for non-pecuniary damage) and 100 000 euros for damage to property in a single road accident, whatever the number of injured third parties. 2. A single road accident means an accident which occurred for same reason, even if more than one injured third party may pursue claims in respect of such a road accident. 3. The insurer shall pay compensation for the damage caused in another Member State of the European Union based on the sums insured in accordance with the legal acts of the Member State concerned or the sums insured as specified in paragraph 1 of this Article, whichever are higher. 4. Amounts of insurance premiums shall be fixed by the insurer. 5. Should the policyholder fail to pay the insurance premium in due time, the insurer shall have the right to charge late-payment interest of 0.04 percent on the overdue amount for each delayed day, unless otherwise provided in the insurance contract. 6. The insurer may not refuse to pay compensation in respect of an insured event which occurred in the period for which the policyholder failed to pay the insurance premium within the time limit set in the insurance contract or in the period for which the policyholder was released from the obligation to pay insurance premiums. 7. If the policyholder failed to pay, within the time-limit set in the insurance contract, the insurance premium for the insurance coverage provided under the insurance contract and if the vehicle covered by that insurance contract caused damage during the said period or the damage was caused during the period for which the policyholder was released from the obligation to pay insurance premiums, the insurer shall be entitled to claim reimbursement from the policyholder for the amounts paid by the insurer to the policyholder by way of compensation for damage. CHAPTER THREE Procedure for assessing damage and paying compensation Article 12. Obligations of Persons Involved in a Road Accident and of Injured Third Parties 1. Where a road accident occurs, the user of vehicle involved in the accident shall: 1) take all available and reasonable measures to reduce the potential damage, take all the measures necessary to provide medical aid to injured persons and protect their property as much as possible; 2) immediately report the road accident to the police; 3) provide the information necessary to identify the insurer to other persons involved in the road accident; 4) within 3 working days from the road accident for which he is responsible, notify in writing the insurer who has covered his civil liability about the accident, unless he is unable to do so for serious reasons. The insurer who has covered his civil liability must be also informed about the road accident in those cases where the person responsible for the accident has not been established; 5) within 5 working days, notify in writing the insurer who has covered his civil liability if a claim for damages was made or any action for damages was brought to court and deliver all necessary explanations and available information. 2. The user of vehicle involved in a road accident and persons claiming damages incurred in the road accident shall be obliged to submit to the insurer or to the Bureau any available evidence concerning the road accident and damage, to be cooperative in examining the circumstances of the accident and assessing the size of the damage, to follow the insurer’s or the Bureau’s instructions, if any, and to allow the insurer or the Bureau to investigate the causes of the damage incurred and assess the size of the damage. 3. The person who caused damage with an uninsured vehicle shall, within 3 working days from the road accident, notify in writing the Bureau thereof, otherwise the handling and settling the claim shall be exercised without him being present. Article 13. Claim for Damages 1. The injured third party may present a claim for damages to the person responsible for the damage (hereinafter referred to as the “liable person”), directly to the insurer of the liable person (hereinafter referred to as the “responsible insurer”), to the insurer’s representative appointed for the settlement of claims, or, in the cases referred to in Articles 17 and 18 of this Law, to the Bureau. Where civil liability of the liable person was insured by an insurance undertaking or a branch of another Member State of the European Union, the injured third party may present a claim for damages to that insurance undertaking, its claims representative or directly to the liable person. 2. Where the compensation paid by the insurer or the Bureau is not sufficient to cover the damage incurred to the injured third party because the damage exceeds the sum insured, the injured third party shall be entitled to claim the remainder from the liable person. 3. The claim for damages may not be presented to the Bureau if the injured third party has applied to court claiming damages suffered in a road accident from the liable person or the responsible insurer. 4. Where the liable person is unidentified but the damage has been caused in circumstances that prove civil liability of a user of vehicle, the injured third party whose property is damaged in the Republic of Lithuania shall be entitled to present a claim for damages to the Bureau. In this case, the Bureau shall examine the claim, assess the size of the damage and determine the amount of compensation to be paid in accordance with the procedure established in this Law; however the compensation shall be paid only after the liable person has been identified. Article 14. Assessment of Damage 1. The injured third party claiming compensation from the insurer or the Bureau shall notify in writing, whether in person or through a representative, the responsible insurer or, in the cases referred to in Article 17 of this Law, the Bureau about the road accident within 3 working days of the accident, unless he is unable to do so for serious reasons. The injured third party shall submit, in person or through a representative, a claim for damages as well as any information and documents concerning the liable person, the circumstances of the road accident and the documents that prove the fact of the damage caused in the road accident, and shall also give access to the documents evidencing the circumstances, fact and size of the damage. 2. Where the damage is caused to property, the injured third party must keep the damaged vehicle or other property in the condition as immediately after the accident until it is inspected by a person authorised by the insurer or the Bureau and allow the person authorised by the insurer or the Bureau to inspect the damaged or destroyed property. The insurer and the Bureau shall, without delay but not later than within 3 working days of receipt of a written notice from the injured third party about the road accident, send an authorised person to inspect the damaged or destroyed property, write a survey report and shall present it to the injured party for signature. 3. The size of damage to property shall be assessed by the responsible insurer or, in the cases referred to in Article 17 of this Law, by the Bureau on the basis of reports and documents prepared by authorised persons and/or by property valuators which prove the circumstances, fact and size of the damage. Should the person authorised by the insurer or the Bureau fail to arrive within the time-limit specified in paragraph 2 of this Article, the injured third party shall have the right to contract a property valuator to assess the size of damage to property. In this case, the insurer or the Bureau must compensate the injured third party for reasonable expenses incurred by him when contracting the property valuator. Nevertheless the injured party has the right, at his own initiative and on its own account to apply to the experts to assess the size of the damage. 4. In case of personal injury, the size of damage shall include all of the damage sustained by a natural person. The damages shall comprise the loss of income that the injured person would have received had he not sustained bodily harm, and the expenses related with the rehabilitation of health (medical treatment costs, expenses incurred for additional nourishment, medicines, prosthetics, care of the injured person, acquisition of specialised transport means, retraining costs and other expenses necessary for the rehabilitation of health). 5. The damages incurred by loss of life shall include funeral expenses and other related expenses as well as expenses related to loss of a breadwinner. Persons entitled to compensation for damage caused by loss of a breadwinner shall be compensated for that portion of the deceased person’s income which they received or were entitled to receive when the deceased person was alive. Persons who were maintained by a breadwinner or at the time of his death were entitled to such maintenance (minor children, spouses, parents incapable of work or other actual dependants incapable of work), also the children of the deceased born after his death shall have the right to compensation for damage. 6. Damage to person shall be assessed by the responsible insurer or, in the cases referred to in Article 17 of this Law, by the Bureau on the basis of documents and information which prove the circumstances, fact and size of the damage as well as on the basis of medical examination reports. On the basis of the conclusions reached by institutions or establishments entitled to assess the damage to health, the insurer or the Bureau shall have the right to send the injured third party for medical examination and shall be obliged to compensate for examination expenses. 7. The injured third party shall be entitled to present claims for non-pecuniary damages to the insurer or, in the cases referred to in Article 17 of this Law, to the Bureau. If the insurer and the injured third party do not agree with the amount of compensation for non-pecuniary damage, the injured third party shall be entitled to apply to court. The persons specified in paragraph 5 of this Article shall also be entitled to compensation for non-pecuniary damage. 8. The provisions of this Chapter related to the assessment of damage and payment of compensation shall respectively apply in cases where the assessment of damage and payments of compensation are resolved by the Bureau or the insurer’s claims representatives. Article 15. Claims Representatives 1. The insurer shall, in accordance with the procedure established in the Law on Insurance of the Republic of Lithuania, appoint its claims representatives in all of the other Member States of the European Union. The claims representatives shall be responsible for the payment of compensation to injured third parties where all of the following conditions are satisfied: 1) the injured third party has suffered damage in a Member State of the European Union other than the state of his permanent residence or in a foreign state the national insurers’ bureau of which has joined the Green Card system and the injured third party is permanently resident in a Member State of the European Union; 2) civil liability of the liable person is covered by an insurer or its branch based in a Member State of the European Union other than the state of permanent residence of the injured third party; 3) the vehicle of the liable person is normally based in a Member State of the European Union other than the state of permanent residence of the injured third party. 2. The claims representative shall be permanently resident or established in the Member State of the European Union where he is appointed. The choice of its claims representative shall be at the discretion of the insurer. The claims representative may work for one or more insurers. He must be capable of examining cases in the official language(s) of the Member State of the European Union where the injured third party is permanently resident. 3. The insurer shall delegate sufficient powers to its claims representative to discharge his functions (collect all necessary information, take decisions regarding the payment of compensation, pay compensation, etc.). Article 16. Principles of Paying Compensation 1. The responsible insurer or the Bureau shall, within the sums insured as specified in Article 11 of this Law, pay compensation if the user of vehicle incurs civil liability for the damage caused to the injured third party. 2. The responsible insurer shall pay compensation to the injured third party if the user of vehicle incurs civil liability for the damage caused to the injured third party when using an insured vehicle, irrespective of whether the user acted in conformity with the terms and conditions of the insurance contract, except in the cases referred to in paragraphs 1 and 2 of Article 21 of this Law, and irrespective of whether the policyholder provided the insurer with all the information necessary for the conclusion of an insurance contract prior to its conclusion. 3. The Bureau shall pay compensation in the cases referred to in Articles 17 and 18 of this Law. 4. In accordance with the procedure established in this Law, the insurer or the Bureau shall pay compensation if the claim for damages is presented within one year from the date when the damage was caused or within one year from the date on which the injured third party learned or had to learn of the damage but not later than within 4 years from the date of the road accident concerned. 5. Compensation for the damage caused by a towed vehicle shall be paid according to the insurance contract covering the towing vehicle provided that the towed vehicle was connected to the towing vehicle at the time of the road accident. If the towed vehicle was not coupled with the towing vehicle at the time of the road accident or got disconnected from the towing vehicle immediately before the road accident, compensation shall be paid according the contract of insurance against civil liability in respect of the use of the towed vehicle where the user of the towed vehicle incurs civil liability in respect of the damage. Article 17. Compensation Payable by the Bureau 1 The Bureau shall pay compensation to third parties injured in road accidents occurring in the territory of the Republic of Lithuania in the cases where: 1) damage is caused by an identified liable person with an uninsured identified vehicle, provided that the user of vehicle incurs civil liability in respect of the damage; 2) an unidentified liable person causes personal injury and/or loss of life, provided that the damage is caused in circumstances proving the civil liability of the user of vehicle; 3) damage is caused by an identified liable person who, at the time when the damage is done, is covered by compulsory insurance against civil liability in respect of the use of motor vehicles, but the responsible insurer is the subject of bankruptcy proceedings. 2. The Bureau shall pay compensation under paragraph 1 of this Article to injured third parties who are permanently resident in the Republic of Lithuania or another Member State of the European Union, except in the cases referred to in paragraphs 1, 3 and 4 of Article 21 of this Law. The Bureau shall also pay compensation to injured third parties permanently resident in a foreign state if the national insurers’ bureau of the state in which the injured third party is permanently resident has signed the Internal Regulations or an agreement with the Bureau on the recognition of reciprocal settlement of claims. 3. The Bureau shall pay compensation for the damage caused in a road accident in the territory of the Republic of Lithuania if the civil liability of the liable person is covered by an insurance undertaking of another state which has issued a Green Card valid in the Republic of Lithuania, provided that the national insurance bureau of the state whose insurance undertaking issued the Green Card has signed the Internal Regulations or an agreement with the Bureau on the recognition of reciprocal settlement of claims, except in cases where the damage has already been compensated by the insurance undertaking which insured the liable person’s civil liability or by its claims representative. 4. The Bureau shall pay compensation for the damage caused in another Member State of the European Union in accordance with the legal acts of that other Member State of the European Union (the national insurers’ bureau of which has signed the Internal Regulations) if the liable person whose vehicle is normally based in the territory of the Republic of Lithuania is not covered by compulsory insurance against civil liability in respect of the use of motor vehicles. The principles of payment of compensation laid down in this paragraph shall also apply if the responsible insurer is the subject of bankruptcy proceedings. The Bureau shall, acting in conformity with the Internal Regulations, pay compensation in other cases as well. 5. The Bureau shall reimburse the sum claimed from it by a compensation body of another Member State of the European Union which has paid it by way of compensation to the injured third party if all of the following conditions are satisfied: 1) the injured third party is permanently resident in another Member State of the European Union; 2) the liable person has his civil liability covered by an insurer or a branch based in the territory of the Republic of Lithuania; 3) the vehicle of the liable person is normally based in the territory of the Republic of Lithuania; 4) within three months from the date of presenting a claim for damages to the responsible insurer or its claims representative, the insurer or its claims representative has not issued a reasoned reply to the claim or the insurer has failed to appoint a claims representative in another Member State of the European Union in which the injured third party is permanently resident. 6. The Bureau shall pay compensation according to subparagraph 3 of paragraph 1 of this Article to injured third parties instead of the following members of the Bureau: 1) insurance undertakings or branches of insurance undertakings of foreign states in accordance with their insurance contracts governed by the law of the Republic of Lithuania; 2) insurance undertakings of another Member State of the European Union in accordance with their insurance contracts governed by the law of the Republic of Lithuania. Article 18. Claims Handled and Settled by the Bureau as Compensation Body of the Republic of Lithuania 1. The Bureau shall act as a compensation body in the Republic of Lithuania and shall handle and settle claims for damages and pay compensation when the injured third party suffers damage in another Member State of the European Union or in a foreign state the national insurers’ bureau of which has joined the Green Card system if all of the following conditions are satisfied: 1) the injured third party is permanently resident in the Republic of Lithuania; 2) the liable person whose vehicle is normally based in another Member State of the European Union has his civil liability covered by an insurance undertaking or a branch of another Member State of the European Union (located outside the Republic of Lithuania). 2.  On the basis of paragraph 1 of this Article, the injured third party may present a claim for damages to the Bureau subject to either of the following conditions: 1) within three months from the date of presenting the claim for compensation to the responsible insurer of another Member State of the European Union or its claims representative, the said insurer or its claims representative has failed to give a reasoned reply to the claim; 2) the insurer of another Member State of the European Union which has covered the civil liability of the liable person has failed to appoint a claims representative in the Republic of Lithuania, provided that the injured third party has not presented a claim directly to the responsible insurer or has presented a claim directly to the responsible insurer but has not received a reply within 3 months. 3. The Bureau shall also settle claims for damages and pay compensation when the injured third party permanently resident in the Republic of Lithuania has suffered damage in another Member State of the European Union if: 1) the insurance undertaking which has covered the civil liability of the liable person is not identified within two months from the date of the road accident; 2) the vehicle which caused the damage is not identified within two months from the date of the road accident if, in accordance with the legal acts of the state in which the road accident occurred, the damage is to be compensated. 4. A claim may be presented to the Bureau after the expiry of the time limit specified in paragraphs 2 and 3 of this Article. The Bureau shall examine the claim for damages and take a decision regarding the payment of compensation within two months of the date when the claim was presented. Where it emerges that the responsible insurer or its claims representative has provided a reasoned reply regarding the payment of compensation, the Bureau shall terminate the examination of the claim. The Bureau shall pay compensation not later than within three months from the date of receipt of the claim for damages. 5. The Bureau shall, without delay but not later than within 5 working days from the date of receipt of the claim for damages from the injured third party (presented in accordance with paragraph 1 of this Article), notify the responsible insurer of another Member State of the European Union or its claims representative in the Republic of Lithuania, the compensation body of another Member State of the European Union and, if known, the person who caused the accident about the claim received and of the time-limits for the settlement of that claim. Article 19. Procedure for the Payment of Compensation 1. The responsible insurer, its claims representative or the Bureau (except in the case referred to in paragraph 4 of Article 18 of this Law) shall pay compensation within 30 days of the date when the claim was presented. 2. If, within the time-limit specified in paragraph 1 of this Article, it is impossible to investigate the circumstances as necessary to establish the fact of the insured event and to assess the size of the damage, compensation shall be paid within 14 days of the date when the investigation of such circumstances could have been completed by making a reasonable effort but not later than within 3 months of the date when the claim was presented (except where damages are awarded by a decision in criminal, administrative or civil proceedings). Where compensation is awarded in criminal, administrative or civil proceedings, it shall be paid within 14 days from the date of receipt of an effective court decision, judgement or ruling. 3.  The responsible insurer, its claims representative or the Bureau shall, within 30 days of the date when the claim was presented (or within 3 months in the cases referred to in paragraph 2 of this Article), make a reasoned offer of compensation or provide a reasoned reply and evidence releasing from the obligation to pay compensation or entitling to reduce the compensation payable. 4. If the responsible insurer, its claims representative or the Bureau fail to keep to the time-limits specified in paragraphs 1 to 3 of this Article, they shall be obliged to pay late-payment interest of 0.04 percent on the overdue amount for each delayed day. The supervisory authority may impose sanctions on the responsible insurer or its claims representative as set forth in the Republic of Lithuania Law on Insurance. 5. Compensation shall be paid after the fact of the insured event has been established and the size of the damage assessed, provided that the road accident was reported to the police and provided that the injured third party submitted to the insurer or the Bureau any available evidence of the road accident and the damage, followed the insurer’s or the Bureau’s instructions, if any, provided the insurer or the Bureau with access to any documents that could prove the circumstances, fact and size of the damage and made it possible to investigate the causes of the damage incurred in the road accident and assess the size of the damage, kept the damaged vehicle or other property in the condition as immediately after the accident subject to Article 14 of this Law and presented a claim for damages within the time-limit specified in paragraph 4 of Article 16 of this Law. If the injured third party has failed to perform or properly perform his obligations set forth in this paragraph and if such failure affected the investigation of the circumstances in which the damage was caused or resulted in an increase of damage, the insurer or the Bureau may reduce the compensation payable. 6. The amount payable by the insurer or the Bureau by way of compensation to the third party injured in a road accident shall not be higher than sufficient to cover the damage which was caused in the road accident and which is supported by evidence and shall not exceed the sums insured as specified in Article 11 of this Law; the insurer or the Bureau shall have the right to reject invalid claims for compensation of the damage caused in the road accident. At the request of the injured third party, the insurer or the Bureau shall remit the payable sum directly to the repair shop repairing the damaged property in question, which has been chosen by the injured third party. An insurer or the Bureau shall remit the payable sum to this repair shop not later than one working day after the damaged property was repaired and the payment order was presented. 7. In cases where several third parties are injured and the sum insured is not sufficient to cover the damage, the insurer or the Bureau shall pay compensation in proportion to the damage suffered by each injured third party. 8. If, after the compensation has been paid, it emerges that there are other injured third parties who are entitled to compensation for the damage caused in the road accident and who have not received it, the insurer or the Bureau shall pay compensation to these parties without exceeding the remainder of the sum insured. 9. Where several persons are liable for the damage, respective insurers and the Bureau shall compensate the injured third party in proportion to the liability of the respective liable person. 10. Social insurance benefits payable upon personal injury or loss of life and a funeral grant payable in the cases provided for by the law shall be included in the amount of the compensation payable. Compensation paid by the insurer or the Bureau to the injured third party shall be reduced by the amount covered by social insurance and compulsory health insurance. Social insurance institutions which have effected the payment of social insurance benefits shall acquire, in accordance with the procedure set out in legal acts, the right of recourse against the responsible insurer or, if such does not exist, the liable person. 11. Where a claim of the injured third party has been satisfied under a voluntary insurance contract, the Bureau shall compensate for the portion of the damage that was not compensated under such claim. After the insurance undertaking has satisfied the claim of the injured third party under a voluntary insurance contract, it shall not be entitled to claim reimbursement for the amount so paid from the Bureau. 12. The Bureau may not request from the injured third party to prove in any way that the liable person is unable or refuses to compensate for damage. 13. In the event of a dispute between the insurer and the Bureau as to which of them should compensate the injured third party, the compensation shall be paid by the Bureau within 30 days of the date when the injured third party presented the claim to the Bureau pending resolution of the dispute. Where it is impossible to investigate the circumstances as necessary to determine the basis for and the amount of compensation within 30 days, the compensation shall be paid within the time limits specified in paragraph 2 of this Article. If, after the Bureau has paid the compensation, it emerges that the compensation should have been paid by the insurer, the insurer shall reimburse the Bureau for the compensation so paid and for any other amounts related to the payment of compensation. 14. Any disputes between the insurer or the Bureau and the injured third party shall be settled in court. Any dispute between consumers and insurers shall be examined in accordance with the procedure established in the Law on Insurance of Republic of Lithuania. 15. Within 15 days from the date of the road accident, the police shall provide the insurer or the Bureau with the information necessary to identify the liable person. 16. The procedure for assessing damages and paying compensation shall be set forth by the Government. Article 20. Payment of Compensation Instead of Insurers in Bankruptcy 1. If the Bureau pays compensation instead of a member of the Bureau which is the subject of bankruptcy proceedings, the Bureau shall take over from the insurer any available documents proving the damage and shall, after having established the basis and the amount of compensation, pay the compensation to injured third parties. Where the Bureau takes over from the insurer the documents proving the damage, the injured third party shall be removed from the list of creditors of the insurer in bankruptcy. Where damage was caused and not reported to the insurer prior to bankruptcy proceedings, the Bureau shall accept notification about the damage and shall, after having established the basis and the amount of compensation, pay the compensation. In this case, the injured third party may not be entered into the list of creditors of the insurer in bankruptcy. The Bureau shall not be liable for the failure by such insurer to keep to the time limit for the payment of compensation. 2. In the case referred to in paragraph 1 of this Article, the Bureau shall be obliged to pay compensation within 30 days from the date of receipt of the documents pertaining to damage from the insurer. If it is impossible to investigate the circumstances as necessary to determine the basis for and the amount of compensation within 30 days, compensation shall be paid within the time-limits specified in paragraph 2 of Article 19 of this Law, however the Bureau shall pay compensation for the undisputable portion of the damage within 30 days from the date of receipt of the said documents from the insurer. 3. After having paid compensation in accordance with this Article, the Bureau shall become a creditor of the respective insurer. Article 21. Release from the Obligation to Pay Compensation 1. The insurer or the Bureau shall be released from the obligation to pay compensation if: 1) damage occurred as a result of war activities, terrorist attacks, nuclear power impact or state of emergency; 2) damage was caused to a cargo or baggage carried against payment in the liable person’s vehicle; 3) damage was incurred as a result of loss of cash, bijouterie, jewellery and art items, securities, documents, philatelic, numismatic or similar collections or objects. 2. The insurer shall be released from the obligation to pay compensation to injured third parties who voluntarily entered the vehicle which caused the damage if the insurer can prove that they knew the vehicle was stolen. 3. The Bureau shall not pay compensation to the injured third party if the damage is compensated by the liable person or another person or if the injured third party was compensated for the damage by the insurer. 4. The Bureau shall be released from the obligation to pay compensation to injured third parties who voluntarily used the vehicle which caused the damage where the Bureau can prove that they knew the vehicle was not insured. Article 22. Reimbursement of Compensation Paid by the Insurer 1. The insurer who has paid compensation shall be entitled to claim reimbursement of the amounts paid by way of compensation from the liable person if the latter: 1) was driving the vehicle under the influence of alcohol, narcotics, drugs or other intoxicating substances, or consumed alcohol or other intoxicating substances immediately after the accident and before the moment when the circumstances of the accident were investigated, or tried to escape a sobriety test; 2) was driving a vehicle which does not meet statutory technical requirements and this was the cause of the road accident; 3) was not in possession of a lawful authorisation to drive the vehicle or did not hold a licence permitting him to drive the vehicle concerned; 4) left the scene of the accident; 5) caused the damage intentionally. 2. If the user of the insured vehicle failed to perform his obligations set forth in Article 12 of this Law or performed them improperly which resulted in an increase of damage through the fault of the user, the insurer shall be entitled to claim reimbursement of the sum paid by way of compensation or part thereof from the user. If the policyholder failed to perform his obligations under the insurance contract or performed them improperly, the insure …