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LAW OF THE REPUBLIC OF MOLDOVA

of April 7, 2022 No. 92

About insurance and reinsurance activity

The parliament adopts this organic law.

This law is partial transposition of the Directive 2009/138/EU of the European Parliament and Council of November 25, 2009 about the organization and implementation of the activities of the insurance and reinsurance organizations (Solvency II) published in the Official magazine of the European Union by L 335 of December 17, 2009 with the last changes made by the Directive (EU) 2018/843 European Parliament and Council of May 30, 2018 changing the Directive (EU) 2015/849 about prevention of use of financial system for the purpose of money laundering or financing of terrorism and making changes to Directives 2009/138/EC and 2013/36/ES, published in the Official magazine of the European Union by L 156/43 of June 19, 2018.

Chapter I General provisions

Article 1. Subject and purpose of the law

(This law regulates 1):

a) permission and implementation in the territory of the Republic of Moldova insurance or reinsurance activity, activities for mediation in insurance and/or reinsurance;

b) prudential requirements for insurance or reinsurance companies, intermediaries in insurance and/or reinsurance;

c) supervision of groups of insurance or reinsurance;

d) the mode of the insurance or reinsurance companies which are in difficult situation;

e) reorganization and liquidation of insurance or reinsurance companies;

f) competence and powers of supervision body, its cooperation with other bodies, organizations and faces.

(2) Provisions of this law do not extend to the national social insurance, compulsory medical insurance and non-state pension funds. If special provisions of this law do not provide other, those are applied as appropriate to reinsurance societies.

(3) the Purpose of this law is ensuring stability, transparency and freedom of provision of services in insurance field and reinsurance, prevention of systemic risks, and also protection of the rights and interests of insurers, insured, reassured, beneficiaries of insurance, the injured third parties and other persons whose rights can be violated.

Article 2. Scope

(1) Provisions of this law are applied to:

a) to the societies requesting the license for implementation of insurance or reinsurance activity according to this law;

b) to the societies having the license for implementation of insurance or reinsurance activity and operating in the territory of the Republic of Moldova including to their departments from the third states;

c) to departments of insurance or reinsurance companies from the third states - concerning the activities performed by them in the Republic of Moldova;

d) to the legal entities or physical persons requesting permission or, on circumstances, the license for implementation of intermediary activities or performing activities for mediation in insurance and/or reinsurance and other types of activity accompanying it according to this law.

(2) Provisions of the Law on regulation of business activity by permission No. 160/2011 are not applied in the processes of issue of permissions, licensing, the notification and approval provided by this law.

(3) Provisions of other laws are applied as appropriate to insurance or reinsurance companies if certain provisions of this law do not provide other.

Article 3. Legal base

The legal base of activities in insurance field and reinsurance, establishment and development of the relations between insurance or reinsurance companies, insurers, insured, reassured, beneficiaries of insurance, the injured third parties and other persons whose rights can be violated is the Constitution of the Republic of Moldova, the Civil code of the Republic of Moldova, this law, other regulations, including the regulations of supervision body published in pursuance of this law and also international agreements in the field which party is the Republic of Moldova.

Article 4. Basic concepts

For the purpose of this law the following basic concepts are used:

the potential acquirer - any physical person or legal entity or group of such persons acting in coordination who intend to acquire by any methods, directly or indirectly, including as the vygodopriobretayushchy owner, the share in the capital of insurance or reinsurance company in connection with expected acquisition;

expected acquisition - the decision made by the potential acquirer for the purpose of acquisition by any methods, directly or indirectly, including as the vygodopriobretayushchy owner, qualified participation in insurance or reinsurance company or for the purpose of increase in qualified participation so that the ratio of its voting powers or participations in the authorized capital reached or exceeded level 10, of 20, of 33 either 50 percent or insurance or reinsurance company became its department;

insurance activity - the activities consisting in the basic in submission of offers, negotiating and the conclusion of insurance contracts and/or reinsurance, receipt of awards, settlement of damage, carrying out recourse actions and compensation of damage;

reinsurance activities - the activities consisting in acceptance of the risks transferred by insurance or reinsurance resident society or insurance or reinsurance company from the third state;

activities for mediation in insurance and/or reinsurance - the activities consisting in representation or the offer of the conclusion of agreements of services of insurance and/or reinsurance or implementation of other actions for preparation of the conclusion of the specified agreements in the conclusion of these agreements or rendering assistance in administration of agreements, in particular in case of insurance indemnities and/or compensations;

the actuary - the physical person specialized in area of assessment of financial risks by actuarial methods (statistical, mathematical and economic), having the qualification certificate of the actuary issued by supervision body;

the significant shareholder - physical person or legal entity which directly and independently or with mediation of other physical persons or legal entities or in cooperation with them, being effective in coordination, exercises the rights concerning ownership of qualified participation;

the agent bankashurans - the bank and/or bank department performing activities in the territory of the Republic of Moldova from the third state, savings and loan association, non-bank credit institution which based on the agreement of the order of the insurance company have the right to sign insurance contracts with the third parties from name and at the expense of the insurance company in accordance with the terms, specified in the agreement of the order and which cannot have other status in the insurance market;

insurance agent - physical person or legal entity which is engaged in professional activity based on the agreement of the order of the insurance company and which has the right to sign insurance contracts with the third parties from name and at the expense of the insurance company in accordance with the terms, specified in the agreement of the order, without having the status of the insurer, the overcautious person, the agent bankashurans or the insurance and/or reinsurance broker;

insurance - transfer of possible risk, including risk to which are exposed life, health or property of person, from insured to the insurance company according to the insurance contract;

insured - person who concluded or for benefit of whom the insurance contract is signed with the insurance company;

the broker assistant - the physical person or legal entity authorized based on the agreement signed with the insurance and/or reinsurance broker and under covering of the agreement of the professional civil responsibility of this broker to perform the certain types of activity necessary for agreement performance of the order;

assistans - rendering by insurance or reinsurance company, the insurance and/or reinsurance broker or any legal entity based on the agreement on cooperation in case of approach of insurance risk of assistance to the insurer insured, reassured, to the beneficiary of insurance and the injured third party or, on circumstances, other insurance or reinsurance company which consists in the organization of provision of technical, medical, financial and legal services in payment of compensations;

supervision body - National Bank of Moldova;

the beneficiary of insurance - the physical person or legal entity insured or designated by the insurer which receives compensation and/or compensation or benefits provided by the insurance contract;

the vygodopriobretayushchy owner - physical person which eventually owns or controls the potential acquirer or the direct or indirect owner of the share in the authorized capital of insurance or reinsurance company equal or exceeding qualified participation;

national bureau of insurers (further - national bureau) - the professional organization created according to the Recommendation No. 5 of January 25, 1949 accepted by Subcommittee on road transport of Committee on the land transport of the United Nations Economic Commission for Europe, and connecting the insurance companies from the certain state, licensed to perform activities for compulsory third party car insurance;

the insurance and/or reinsurance broker - the legal entity registered in the Republic of Moldova who according to this law conducts negotiations for the benefit of the clients - the physical persons or legal entities insured or reassured or potential insured or reassured - according to the conclusion of insurance contracts and/or reinsurance provides consulting services and services in risks assessment and renders assistance throughout operation of agreements or in connection with settlement of damage;

acquisition expenses - the expenses connected with the conclusion of insurance contracts and/or reinsurance which include as directly responsible expenses, such as commission payments and expenses on opening of case or on adoption of agreements in portfolio, and indirectly responsible expenses, such as the marketing and administrative expenses connected with consideration of the applications and issue of policies;

insurer - physical person or legal entity which signed the insurance contract with the insurer;

control - the relations between parent society and department or the similar relations between any face and society;

the correspondent - any insurance or reinsurance company or any other legal entity designated by one either more insurance or reinsurance nonresident societies of the Republic of Moldova from the advance approval of national bureau for settlement of statements for compensation of the damage caused by the motor transportation incidents which happened in the territory of the Republic of Moldova on which insurance or reinsurance company or insurance or reinsurance nonresident societies issued the insurance policy of compulsory third party car insurance valid for the territories of the Republic of Moldova;

insurance indemnity - the amount which is subject to payment or paid by the insurance company insured to the beneficiary of insurance or the injured third party for compensation of the damage caused by insured event in the limits provided by the insurance contract;

the regulated subject - the regulated subject in value of the Law on additional supervision of the banks, insurers/overcautious persons and investment societies entering financial conglomerate, No. 250/2017;

the eksternalization (outsourcing) - the agreement between insurance or reinsurance company and the service provider irrespective of whether it is person under surveillance the subject or not on which the service provider performs process, provides service or performs activities, otherwise provided or performed by insurance or reinsurance company;

guarantee fund - the fund of financial resources created at the expense of fees of the insurance companies for the purpose of protection of interests of insurers, insured, beneficiaries of insurance and the injured third parties by return of awards, payment of insurance indemnities and/or compensations for agreements of compulsory and voluntary (facultative) insurance in case of establishment of insolvency of the insurer;

function - internal potential on accomplishment of practical tasks within management system which includes risk management function, function of ensuring compliance, internal audit function, actuarial function and other types of functions;

group - the group of societies consisting of the participating society, its departments and of subjects in which this participating society or its departments own participation, and also group of the subjects connected among themselves by the relations in the following procedure:

a) two or more subjects are controlled together based on the signed agreement or provisions of the constituent act of subjects;

b) governing bodies of two or more subjects consist of the same persons representing the majority, holding the positions during the accounting period up to creation of consolidated financial statements;

insurance holding - parent society, other what the mixed financial holding which acquires and owns control or exclusive participations in the departments representing insurers or overcautious persons, at least one of whom is insurer or the overcautious person;

the mixed financial holding - parent society, other what the regulated subject which jointly with the departments from which at least one is regulated subject with the location in the Republic of Moldova and together with other subjects constitutes financial conglomerate;

the mixed insurance holding - parent society, other than insurance or reinsurance company which is not insurance holding or the mixed financial holding at least one of departments of which is insurer or the overcautious person;

insurance compensation - the amount, owed or paid by the insurance company to insured person / insured, to the beneficiary of insurance or the injured third party in case of approach of the risk provided in basis and within the insurance contract;

confidential information - any information relating to the professional participant of the insurance market which represents the commercial, tax or protected by the law other secret, and also any information which is at the disposal of supervision body for the purposes or in connection with implementation of its powers which disclosure can do much harm to interests or prestige of person whom treats;

the intermediary in insurance - the physical person or legal entity which is performing for remuneration activities for mediation in insurance and having the status of insurance broker, insurance agent or the agent bankashurans;

the intermediary in reinsurance - the reinsurance broker performing for remuneration activities for mediation in reinsurance;

close ties - close ties in value of the Law on the capital market No. 171/2012;

the broker order - the agreement of the order signed between insured or reassured or potential insured or reassured as the client and the insurance and/or reinsurance broker according to which it is entrusted to conduct to the last, on circumstances, negotiations according to the conclusion of insurance contracts and/or reinsurance, to render assistance to the conclusion and throughout operation of agreements or in connection with settlement of damage;

risk assessment - the mathematical function which is expressing sum of money certain forecast of distribution of probabilities and regularly increasing with risk exposure level, the cornerstone of this forecast of distribution of probabilities;

participation - ownership, directly or by means of control, at least than 20 percent of voting powers or the authorized capital of insurance or reinsurance company within group supervision;

qualified participation - immediate or indirect possession by person in at least than 10 percent of voting powers or the authorized capital of insurance or reinsurance company or any other opportunity to exert qualified impact on management of insurance or reinsurance company in which person owns this participation;

the professional participant of the insurance market - the insurance or reinsurance company, department of insurance or reinsurance company from the third state, the intermediary in insurance and/or reinsurance performing activities based on this law, national bureau;

persons holding key positions - workers whose positions allow them to exert considerable impact on orientation of insurance or reinsurance company, the risk management function which are not members of governing bodies and performing, function of ensuring compliance, internal audit function, actuarial function, and also chief accountants, finance directors, heads of services of compensation of damage;

persons holding executive positions - persons authorized by the law, the charter or administrative acts to assume liabilities and to fulfill functional duties independently or together with other persons from name and at the expense of insurance or reinsurance company, the intermediary in insurance and/or reinsurance and national bureau and the societies which are members of council, members of executive body, heads of departments;

the controlled market - the controlled market in value of the Law on the capital market No. 171/2012;

added gross - award - the award calculated by insurance or reinsurance company based on the insurance contract and/or reinsurance to deduction from it any amounts;

insurance premium - the amount which the insurer shall pay to the insurance company in case of receipt of the insurance policy according to the procedure and the terms provided by the insurance contract in exchange for covering by the insurance company of insurance risk;

added net - award - gross - the award calculated by insurance or reinsurance company based on the insurance contract and/or reinsurance after deduction of part of the award transferred to reinsurance;

supervision process - continuous, flexible and iterative process in which prospektivny (detailed) supervision of insurance or reinsurance company is based on risks and at least on the following principles:

a) harmony;

b) qualified judgment;

c) documentation;

non-proportional reinsurance - reinsurance in case of which reinsurance society undertakes the obligation to participate in payment of insurance indemnity in case of approach of the events provided in the insurance contract, in the amount of, exceeding own deduction of reassured;

proportional reinsurance - distribution of insurance premium and insurance sum is pro rata to distribution of risk between reinsurance agreement parties;

own deduction - part of risk which remains under responsibility of insurance or reinsurance company after cession of risk in reinsurance;

concentration risk - all risk exposures which potential losses are rather big to pose threat for solvency or financial position of insurance or reinsurance companies;

credit risk - risk of losses or adverse changes of financial situation as a result of fluctuations of creditworthness of issuers of securities and any other debtors to which insurance or reinsurance companies are subject;

liquidity risk - risk to which insurance or reinsurance companies are subject, connected with impossibility of realization of investments and other assets for accomplishment of the financial liabilities in case of approach of term of their repayment;

operational risk - the risk of losses arising in connection with shortcomings or violations of internal processes, in connection with personnel or systems or in connection with external events;

market risk - the risk of losses or adverse changes of financial situation arising because of fluctuations of level and volatility of market prices of assets, liabilities and financial instruments;

risk of underwriting - risk of losses or adverse changes in value of insurance bonds in connection with incorrect forecasts for pricing and forming of insurance reserves;

single risk - risk which can lead to causing damage to separate property, to damnification of working capacity, life or health of the certain person;

the insurance company or the insurer - the legal entity who performs insurance activity based on the license for implementation of the insurance activity granted by supervision body. The concept the insurance company which does not contain the phrase "from the third state" is applied to the insurance companies with the central office in the Republic of Moldova;

the composite insurance company or the composite insurer - the insurer who on the date of entry into force of this law has the license for simultaneous implementation of general insurance and life insurance;

reinsurance society or the overcautious person - the legal entity who performs reinsurance activities based on the license for implementation of the reinsurance activities granted by supervision body. The concept reinsurance society which does not contain the phrase "from the third state" is applied to reinsurance societies with the central office in the Republic of Moldova;

parent society - insurance or reinsurance company which conforms to the following requirements:

a) has the majority of voting powers in commercial society (department);

b) has the right to appoint and recall members of governing bodies of commercial society (department) and at the same time is shareholder or the member of the relevant society;

c) has the right to exert the determining impact on commercial society (department), shareholder or the member of whom is, owing to the agreement signed with this society or certain condition of the constituent act of this society if the legislation applicable to this department allows it to fall under such agreements or conditions;

d) is shareholder or the member of commercial society (department) in most of which of members of the governing bodies of this commercial society (department) fulfilling the duties in the current accounting period, in the previous accounting period and about day of creation of consolidated financial statements were appointed as a result of implementation of the voting powers; this provision is not applied in situation when the other person has concerning commercial society (department) of the right, provided by Items and), b) or c);

e) is shareholder or the member of commercial society (department) and controls independently based on the agreement signed with other shareholders or members of this commercial society (department), the majority of voting powers in this commercial society (department);

f) actually exerts the determining impact on other commercial society (department) according to the criteria provided by regulations of supervision body;

the participating insurance company or the participating reinsurance society - insurance or reinsurance company which is either parent society, or other insurance or reinsurance company and which owns at least than 20 percent in commercial society (department) or in the insurance or reinsurance company connected with other society according to the signed agreement or according to certain condition of constituent acts or the charter of societies;

the State of origin - the state in which the central office of insurance or reinsurance company is located and in which it is licensed;

the host state - the state, other, than the State of origin in which insurance or reinsurance company has department;

department - the separate division of insurance or reinsurance company located outside its location which has permanent appearance, own management and necessary material equipment for implementation of certain or all types of activity of society, with the location in the Republic of Moldova or in the third state;

division - the certain structural subject of the legal entity located outside its location who has necessary material equipment for implementation of certain types of activity of the legal entity, not having own balance;

insurance sum - the maximum limit of responsibility of the insurance company in case of approach of risk in connection with which the insurance contract is signed;

body of insurance supervision of group - the supervision body responsible for implementation of supervision of certain group;

insurance rate - the rate (calculated per unit of insurance sum) insurance premium which insured pays for certain period;

methods of decrease in risks - the methods allowing insurance or reinsurance companies to transfer fully or partially the risks to the third party;

the intra group transaction - any transaction by means of which insurance or reinsurance company addresses directly or indirectly other societies in the same group or any physical person or legal entity having close ties with societies of this group for accomplishment of the obligations, regardless of nature of those;

organization of insurance or reinsurance company - the central office or any of departments of society.

Article 5. Compulsory and voluntary (facultative) insurance

(1) On method of implementation of legal relations two forms of insurance differ: obligatory and voluntary (facultative).

(2) In compulsory insurance of the relation between the insured and insurance company, the rights and obligations of each of the parties, conditions and procedure for their accomplishment are established by the law.

(3) In voluntary (facultative) insurance of the relation between the insured and insurance company, the rights and obligations of each of the parties are established by the insurance contract. Provisions of the insurance contract cannot be beyond provisions of conditions of insurance. Conditions of voluntary (facultative) insurance are established by the insurance company according to the legislation and regulations of supervision body.

(4) Issue of the conclusions and establishment of approach of insurance risks, damage assessment, determination and payment of insurance indemnities and/or insurance compensations in compulsory insurance are performed according to the law, and in voluntary (facultative) insurance - in accordance with the terms of insurance and the insurance contract.

Article 6. Production of execution by the insurer

(1) the Insurance indemnity and/or insurance compensation are paid by the insurance company in cash both bank transfer, and cash. In case of payment of insurance indemnity without recovery or repair of property the value added tax is kept by way of rendering services from insurance indemnity.

(2) Compensation of damage by rendering services in recovery or repair of property is allowed only from written consent of person having the right to receive insurance indemnity and/or insurance compensation.

(3) If investigation continues more than one month, insured or, on circumstances, the beneficiary of insurance and the injured third party has the right to demand the advance payment corresponding and pro rata to the probable obligation on payment provided that they the obligation of the insurer on payment of insurance indemnity and/or insurance compensation and the size of those do not raise doubts. The advance payment is paid without unjustifiable delay.

(4) in case of violation of payment due date of insurance indemnity and/or insurance compensation because of the insurance company, that pays insured, to the beneficiary of insurance and the injured third party penalty fee in the amount of 0,1 of percent of compensation amount and/or insurance compensation for each day of delay. Agreements under which the insurance company is exempted from obligation of payment of possible percent for delay of payment or, on circumstances, penalty fee are insignificant.

(5) the Insurance contract can provide the franchize representing the part of damage which the insurer does not compensate established in the form of fixed amount or percent from insurance indemnity or insurance sum.

Article 7. Insurance premium

(1) Payment of insurance premium is made in complete size or by installments during the repayment periods provided by the agreement on the location of the insurance company or its representatives if the insurance contract does not provide other.

(2) In case of compulsory insurance insurance premiums are calculated according to special laws.

(3) In case of voluntary (facultative) insurance insurance premiums, rates and benefits are calculated the insurance company. The specific size of insurance premium is established by the insurance contract by agreement of the parties.

(4) the differentiated establishment of awards, rates and benefits by discrimination criteria is forbidden to the Insurance companies when calculating insurance premiums, rates and benefits.

(5) the Burden of proof of payment of insurance premiums is assigned to the insurer, at the same time any payment document provided by the current legislation can serve as the confirmatory evidence.

Article 8. Insurance of foreign physical persons and legal entities and stateless persons

The foreign physical persons and legal entities and stateless persons performing activities in the territory of the Republic of Moldova have the same rights and obligations on negotiating, the conclusion and execution of insurance contracts, as physical persons and legal entities of the Republic of Moldova.

Chapter II activities Regulation

Part 1 Licensing of insurance or reinsurance companies

Article 9. General provisions

(1) Insurance or reinsurance activity in the territory of the Republic of Moldova can be performed only based on the licenses granted by supervision body according to requirements of this law and other regulations.

(2) Insurance or reinsurance company is established in form of business of joint-stock companies according to the legislation on joint-stock companies and this law. Provisions of this part are not applied to departments of insurance or reinsurance companies from the third states.

(3) According to part (2) this Article of provision of Articles 70 and 71 and any other provisions of the Join-stock companies law No. 1134/1997, which directly or indirectly belong to audit committee are not applied in case of insurance or reinsurance companies.

(4) Society applicant cannot be registered without the preliminary permission to organization issued by supervision body. Insurance or reinsurance company cannot make changes to the State register of legal entities without preliminary permission of supervision body.

(5) the License for implementation of insurance or reinsurance activity is received:

a) the societies registered based on the preliminary permission to organization issued by supervision body for implementation of insurance or reinsurance activity;

b) the departments of insurance or reinsurance companies from the third states registered based on the preliminary permission to organization issued by supervision body concerning their activities performed in the Republic of Moldova;

c) insurance or reinsurance companies which expand the activities on all class of insurance or by sight reinsurance activities or on classes or types of reinsurance activities, other than on what there is license.

(6) For licensing for implementation of the types of activity permited insurance or reinsurance companies the written application about licensing to which the documents and/or data relating to society applicant are enclosed is submitted to supervision body namely:

a) constituent acts of society;

b) the authorized capital of society according to the requirement to the minimum capital according to Article 74 provisions;

c) management system and governing bodies of society according to provisions of Articles 34 and 35;

d) the identity of shareholders according to provisions of Articles 30 and 31;

e) the business plan for the next three years according to Article 11 provisions;

f) any other documents and/or data provided by regulations of supervision body.

(7) during consideration of the application about licensing the supervision body requests any additional documents and/or data concerning licensing from society applicant if the submitted documents and/or data are insufficient for assessment of conformity to licensing conditions.

(8) the Insurance company performs activities based on the license granted only on activities for category "life insurance" or on activities for category "general insurance".

(9) insurance Classes on specified in part (8) to categories are established in appendix to this law.

(10) Insurance or reinsurance company has the right to perform activities within classes of insurance or types of reinsurance activities on which it obtained the license in accordance with the terms of this law. The right to perform is granted and specified by activities for class 10 of the Section B of appendix separately in appendix to the license for internal compulsory third party car insurance or on internal and external compulsory third party car insurance.

(11) the License extends to all class of insurance, except for case when society applicant wishes to cover only part of the risks belonging to this class.

(12) In departure from part provisions (8) the insurance company performing activities for category "life insurance" without possession of the license on category "general insurance" can insure also the risks covered by classes 1 and 2 of the Section In appendices if they are considered as additional risks in classes of category "life insurance".

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