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Ministry of Justice

Republic of Moldova

On May 23, 2017 No. 1221

RESOLUTION OF THE NATIONAL COMMISSION ON THE FINANCIAL MARKET OF THE REPUBLIC OF MOLDOVA

of April 21, 2017 No. 17/6

About approval of the Regulations on requirements to the program of reinsurance of the insurer and rules of the conclusion of agreements of reinsurance

For the purpose of execution of provisions of Art. 10 of the h. (6) the Law No. 407-XVI of 21.12.2006 "About insurance" (The official monitor of the Republic of Moldova, 2007, No. 47-49, the Art. 213), based on Art. 1 of the h. (1), Art. 8 of the item b), Art. 21 of the h. (1), Art. 22 of the h. (1) and h. (2) the Law No. 192-XIV of 12.11.1998 "About the National commission on the financial market" (it is repeatedly published in the Official monitor of the Republic of Moldova, 2007, No. 117-126 BIS), with subsequent changes and amendments, the National commission on the DECIDES: financial market

Approve Regulations on requirements to the program of reinsurance of the insurer and rules of the conclusion of agreements of reinsurance according to appendix.

Chairman of the National commission on the financial market

Valeriu Kitsan

Appendix

to the Resolution of the National commission on the financial market of the Republic of Moldova of April 21, 2017 No. 17/6

Regulations on requirements to the program of reinsurance of the insurer and rules of the conclusion of agreements of reinsurance

Chapter I. General provisions

1. This Provision establishes requirements to the program of reinsurance of the insurer and the rule which need to be observed in case of the conclusion of agreements of reinsurance.

2. The concepts used in this Provision have the following determinations:

commission fee for reinsurance (assignment) – the remuneration paid by the overcautious person to the reinsurer for transfer of risks in reinsurance (assignment) depending on circumstances. The size and payment method are established in the agreement, slipa or the cover-note on reinsurance (assignment);

the agreement of reinsurance – the agreement between two parties called by "overcautious person" and "reinsurer" according to whom the overcautious person accepts part of risks of the reinsurer instead of the sum of money called "reinsurance award", for which it shall pay to the last, the corresponding compensation in case of approach of risk (risks) agrees to the conditions stipulated in the agreement;

surplus – the risk amount transferred to reinsurance (the part of cost of risk exceeding own deduction);

reinsurance pool – the contract or agreement between insurers within which participants accept the respective fixed responsibility share under the signed agreements, with issue of the policy on behalf of all participants;

reinsurance award (assignment) – cash equivalent which is paid by the overcautious person for insurance by the reinsurer of the risks transferred to reinsurance. The size and payment method are established in the agreement or slipa of reinsurance (assignment);

facultative reinsurance – partial or complete risk reinsurance, connected with one insurance policy when both the overcautious person and the reinsurer have opportunity to accept or refuse the offered risk;

compulsory reinsurance – reinsurance of some categories of the risks noted in the insurance contract in set proportions and limits when selection of risks by the parties is not possible. The overcautious person yields the risks or part of them determined by agreements irrespective of their nature, and the reinsurer shall, according to the agreement, to accept them;

non-proportional reinsurance "the excess of loss" – reinsurance in which the overcautious person compensates to the reinsurer the cost of the suffered losses in the amount exceeding the caused limit of own deduction;

non-proportional reinsurance "the excess of unprofitability" – reinsurance in which responsibility of the insurer is limited to certain loss ratio, with transfer to reinsurance only of that part which exceeds earlier established percentage level of amount of awards. Thus, the overcautious person covers damage only if its general level in the year determined for the insurer exceeds the determined sum;

proportional reinsurance "share" - reinsurance in which the overcautious person accepts certain share of each risk of the direct insurance accepted by the reinsurer (assignor) according to policies in reinsurance, covering all losses in the same proportion according to direct awards, but without commission charges for reinsurance;

proportional reinsurance "the excess of the amount" - reinsurance in which the overcautious person agrees to acceptance of part of risk which insurance sum exceeds limit of own deduction;

assignment – the agreement by means of which the overcautious person yields to other insurer or the overcautious person all earlier accepted reinsurance or its part;

slip / the cover-note – the agreement which contains the orders connected with terms and conditions of reinsurance transferred to risks reinsurance and which contains, at least, the following:

1) name of the company of the assignor;

2) the characteristic of the object transferred to reinsurance;

3) insurance sum;

4) insurance conditions (duration of the agreement, responsibility of the overcautious person, commission charges for reinsurance, bonus, insurance premium, etc.);

5) share of the tariff charge;

6) own deduction of the company of the assignor;

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