Newly established insurance companies will be required to fill in new licensing applications, much more complex than the ones used so far, while those already existing will present a documentation by November 2, to prove they meet the new requirements, according to Norms 2/2001 of the Insurance Overseeing Committee published in the Official Gazette on Friday.
This is practically the law that will help sweeping the insurance market in terms of capital requirements as of November 2. According to Law 32/2000, the new minimal share capital requirements are as follows: 7bn lei for general insurance, except for mandatory insurance, 14bn lei for general insurance and 10bn lei for life insurance.
Of the 72 companies operating on the market at the moment, only 30-35 will be able to meet the new requirements, according to official estimates. After all, the insurance market has become extremely polarised lately, as the top ten players account for 80% of the total revenues ($200 million) for the first six months.
The new licensing procedure stipulates that the company is required to draw up a feasibility study to include a brief presentation of the activity, the reinsurance programme, the product distribution channels, the organisational structure, as well as the list of natural or legal persons whose services it is planning to use: auditors, banks, lawyers, actuaries or financial consultants.
The administrator and/or the general manager of an insurance company must have at least three years of managerial expertise in the insurance field, not be a significant shareholder of an insurance broker and not have or have had a restriction to work in banks or in any other financial institutions.
The Norms 3/2001 of the Insurance Overseeing Committee were also published in the Official Gazette on Friday. These norms regulate the types of insurance that may be operated by insurance companies, which are as follows in Romania: life insurance and general insurance.
Life insurance consists in five types of insurance (life, marriage and birth, life connected to investments, permanent health and capitalisation), while general insurance consists in 17 types of insurance including among others: accident and illness insurance, vehicles, fire and natural disasters, civil auto liability, credit and collateral and financial losses.
The newest insurance stipulated in the norms is juridical protection insurance, that is bearing the expenses for the legal procedures and providing other services derived from covering the insurance, such as recuperating the damage incurred by the insured through a civil or penal procedure.
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