RESOLUTION OF INTER-PARLIAMENTARY ASSEMBLY OF EURASIAN ECONOMIC COMMUNITY

of May 26, 2006 No. 7-14

About Recommendations about harmonization of the legislation of state members of EurAsEC in the field of regulation of the market of insurance services (on the basis of the comparative and legal analysis of national legal systems)

The inter-parliamentary Assembly decides:

1. Approve the Recommendations about harmonization of the legislation of state members of EurAsEC provided by the Permanent commission of MPA on economic policy in the field of regulation of the market of insurance services (are applied), prepared on the basis of the comparative and legal analysis of national legal systems.

2. Submit Recommendations in parliaments, the Secretariat of Integration Committee of EurAsEC for use in work on harmonization of national legal systems and enhancement of the legal base of Community.

Appendix

to the Resolution MPA of EurAsEC of May 26, 2006 No. 7-14

Recommendations about harmonization of the legislation of state members of EurAsEC in the field of regulation of the market of insurance services (on the basis of the comparative and legal analysis of national legal systems)

These Recommendations determine the main directions of harmonization (rapprochement, unification) national legal systems in the designated sphere formulated on the basis of the comparative and legal analysis taking into account international experience and the conventional international standards.

As showed the comparative and legal analysis, the modes of access for foreign insurers to the national insurance markets considerably differ on the states.

Nevertheless, it is necessary to consider that complete and immediate liberalization of the sector of insurance services in the conditions of weak competitive environment, can lead monopolizations of separate types of insurance services to destabilization of financial condition of national insurers.

With respect thereto the question of enhancement of regulation of the sector of insurance services can be solved only in the conditions of transition period of liberalization of the market of insurance within GATS.

At the same time nevertheless it is necessary to consider that the main number of member countries of the WTO proceed from rate on preserving the state control over national insurance industry. Measures of protection from the direct competition of foreign insurers and measure for prevention of outflow of resources of national insurance industry abroad are for this purpose provided.

Thus, elimination of contradictions and discrepancies of provisions of national legal acts to the international standards will allow not only to accelerate process of their harmonization (rapprochement, unification), but also will promote development of the national insurance markets of state members of EurAsEC.

It should be noted that the regulations adopted in the states of Community are in general sufficient. Nevertheless, some fields of regulation from the point of view of integration processes need enhancement and harmonization.

I. Considering that introduction of obligatory types of insurance is the least effective method of promotion and development of insurance culture, development and regulation of separate types of economic activity which would provide insurance of the integrated risks are advisable. In particular, cargo insurance as the compulsory provision of making of international delivery, civil responsibility insurance of the organizations creating the increased danger to people around, etc.

II. It is necessary to draft the Agreement establishing single procedure for licensing of insurance activity, providing the principle of domination of the state registering the insurer and also features and procedure for maintaining single system of insurer licensing and requirements to solvency and control of investments of the insurer.

III. For the purpose of enhancement of the basic principles and approaches to regulation of insurance activity in state members of EurAsEC it is advisable:

1. Considering the distinctions established during the comparative and legal analysis in approaches of classification of insurance by objects, to concretize (taking into account the international experience and the signed international treaties) provisions of the national laws, having determined as the unified approach separation of insurance into life insurance and general insurance (other, than life insurance).

2. Determine the list of qualification requirements in the laws of the Republic of Belarus, the Republic of Tajikistan on insurance, having established as is as follows:

- availability of good reputation, i.e. the persons who were earlier accused of making of administrative offenses, forgery, accused of making of any criminal offenses connected with the professional activity, or activities as the head of bankrupt insurance companies, and also companies whose licenses for maintaining insurance business were revoked for cause of infringement of the requirements established by the legislation cannot be heads of insurance company, authorized representatives and actuaries;

- availability of qualification and work experience, t.е. persons holding the leading posts in insurance company shall have sufficient qualification, have the higher education in the field of finance, economies or insurance, and also experience of management in financial, economic and technical areas.

3. Determine single approaches to regulation of form of business of insurance company, having established as that joint-stock company (the opened or closed type) and society of mutual insurance.

4. For the purpose of increase in transparency of the insurance market legislatively to determine the requirement of receipt of independent ratings by the reinsurance organizations of state members of EurAsEC.

IV. Considering distinctions in the levels of development of certain sectors of the insurance markets of the states of Community, it is reasonable:

1. Determine package of measures, directed at the same time to protection and on development of the least developed types of insurance, in particular, of life insurance and voluntary pension insurance.

2. For obligatory types of insurance to pursue the tariff policy aimed at providing stability of the market of compulsory insurance.

V. For the purpose of assistance in the organization of the mutual admission on the market of insurance services of insurance companies from the states of Community it is reasonable:

1. Determine opportunity and procedure for control of cross-border provision of insurance services within EurAsEC (that is behind implementation of trade in insurance policies directly, without organization for this purpose of foreign branches or subsidiary companies) as the contractual relations arising at the same time are regulated by rules of law of the country of the insurer.

2. Concretize regulations on impossibility of foreign insurance company to perform activities in the territory of the Russian Federation (to perform insurance operations) through the agency, department, affiliated insurance company or branch of the parent insurance company located out of the territory of Russia.

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