Article 19. Procedure for Paying Compensation

1. The responsible insurer, its claims representative or the Bureau (except in the case referred to in paragraphs 5 and 6 of Article 17, Articles 18 and 20 of this Law) must 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 institution may also impose sanctions on the responsible insurer or claims representative of the insurance undertaking of another member state of the European Union, 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 motor vehicle or other property in the condition as immediately after the accident subject to Article 15 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 responsible 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. If the insurer has paid compensation to the injured third party, compensation shall be paid to the policyholder only in the case when the policyholder had received a written consent of the responsible insurer to pay compensation or if the policyholder proves that the insurer has not given such consent without justified reasons.

7. In cases where several third parties are injured and the sum insured is not sufficient to cover the damage, the responsible 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 responsible 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, then the respective insurers and the Bureau shall compensate the injured third party in proportion to the liability of the respective responsible person.

10. Persons who, according to the procedure laid down by legal acts, have the right of recourse or subrogation to the person who caused the damage, a claim for damage may present directly to the insurer who covered civil liability of the responsible person or, in his absence, to the person who caused the damage.

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 responsible 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. The injured third party who is permanently resident in the Republic of Lithuania, shall have the right to bring legal proceedings in the Republic of Lithuania against the responsible insurer of any member state of the European Union. Any dispute between consumers and insurers shall be examined in accordance with the procedure established in the Law on the Bank of Lithuania.

15. The police shall, not later than within 10 working days from the date of the road accident, provide the insurer or the Bureau with the information about the road accident.

16. The procedure for assessing damages and paying compensation shall be set forth by the Government.