The Law on Insurance and Reinsurance Activities will come into force in Moldova on January 1, 2023, and from that day the previous Law on Insurance will become invalid.
This implies the mentioned document, published in Monitorul oficial, which also provides for an increase in the cost of a license for insurance companies up to 50 thousand lei and a gradual increase in their authorized capital. The Insurance and Reinsurance Act transposes the provisions of the European Insurance Directive and in particular the requirements of Solvency II. It partially repeats the current rules of regulation and supervision, and also contains new requirements for capital adequacy, corporate governance and risk management in the insurance industry, and also obliges insurance / reinsurance companies to ensure transparency of their activities by providing the public with the necessary information about their solvency and financial condition . The law regulates the rules for registration, authorization, licensing, as well as for conducting insurance/reinsurance activities and intermediary activities in this area in Moldova. It also establishes prudential requirements for insurance market participants and rules for supervision of insurance/reinsurance groups, the procedure for the creation, reorganization and liquidation of insurance companies and insurance/reinsurance intermediaries. Regimes for troubled companies, including the procedure for their reorganization and liquidation, were stipulated, the competences and powers of the NCFM and the procedure for the interaction of the regulator with other institutions were determined. The law provides for an increase in the cost of a license for insurance companies (up to 50 thousand lei) and a gradual increase in their authorized capital. It is stipulated that the minimum capital requirement, represented by the equity capital of an insurance or reinsurance company, is at least (absolute limit): operating under the category "general insurance" and not subject to the provisions of the clause; b) the equivalent of 3.2 million euros in lei - for insurance companies operating under the category "general insurance" and assuming all or part of the risks in insurance classes 10-15 of section B of the annex; c) the equivalent of 3.2 million euros in lei - for insurance companies operating under the category "life insurance"; d) the equivalent of 3.2 million euros in lei - for reinsurance companies carrying out exclusively reinsurance activities; the total value of the amounts provided for in paragraphs a) and c) or b) and c), for composite insurance companies carrying out simultaneous activities. Companies will be able to fulfill the requirements for the minimum amount of capital in stages. In particular, the law states that the adjustment of the requirements for the minimum capital of an insurance or reinsurance company to the provisions of this law is achieved within the following terms: in a year from the date of entry into force of this law, the requirement for the minimum capital of an insurance or reinsurance company must be at least 20% stipulated minimum capital requirement; after 2 years - at least 40%; after 3 years - at least 60% of the stipulated minimum capital requirement; after 4 years - at least 80% of the stipulated minimum capital requirement; 5 years after the entry into force of this Law, the minimum capital requirement of an insurance or reinsurance company shall be 100% of the prescribed minimum capital requirement. The competence of the NCFM as a supervisory body will also be expanded. Thus, measures/sanctions are regulated that the regulator will be able to apply if market participants do not comply with the requirements for ensuring technical reserves, capital, and solvency. The law will come into force on January 1, 2023. From that day on, the law on insurance will be declared invalid. Regulations issued by the supervisory authority on the basis of the Insurance Law will continue to apply to the extent that they do not contradict the Law on Insurance and Reinsurance Activities, until they are explicitly declared invalid. // 29.04.2022 — InfoMarket
