Insurance is a risk management technique, used by both people and businesses as a means of protection from financial loss. Vehicle insurance, also known as car insurance, motor insurance or auto insurance, is an insurance for cars, trucks, motorcycles and other means of transportation. This particular insurance is used to provide financial protection against physical damage, bodily injury caused by an accident involving a vehicle or liability that could arise from such incident. Vehicle insurance is just one among many insurance products offered on the Cambodian market, but only a limited number of insurances are made compulsory by Cambodian law and regulations. For instance, there is a compulsory motor vehicle or third- party liability insurance; however, this insurance is applicable only for motor vehicles used for business operations such as transportation of goods and passengers, and those belonging to companies, enterprises, factories, non-government organizations, international organizations and associations, etc.[1]

Through its policy document “Rectangular Strategy Phase 4”, the Royal Government of Cambodia has decreed that the development of the financial and banking sector is one of the four priority actions to be accomplished.[2] Hence, the Insurance Regulator of Cambodia (IRC) has prepared a Strategic Development Plan for Insurance Sector for 2021-2030 and this was adopted by the Non-Bank Financial Services Authority Council (NBFSA). In its Short-Term Strategic Plan (2021-2023), the IRC planned to introduce a system framework for Motor Vehicle Third-Party Liability Insurance, which will be a compulsory insurance for all types of vehicles.[3]

[1] Provision 2 of Inter-ministerial Prakas No. 653 PRK.SHV.SK.MPH on Compulsory Motor Vehicle or Third-Party Liability Insurance, dated 16 October 2022.

[2] Royal Government of Cambodia, “Rectangular Strategy – Phase 4”, September 2018, p. 10.

[3] Insurance Regulator of Cambodia, “Cambodia Strategic Development Plan for Insurance Sector 2021-2030”, adopted by the NBFSA Council in the Session on September 15, 2021, p. 17.