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

of January 21, 2011 No. 2/1

About approval of the Regulations on margins of solvency and liquidity rate of the insurer (overcautious person)

For the purpose of execution of provisions of Art. 30 of the h. (4) and h. (7), Art. 34 of the h. (10) the Law 407-XVI of 21.12.2006 "About insurance" (The official monitor of the Republic of Moldova, 2007, No. 47-49, the Art. 213) the National commission on the DECIDES: financial market

1. Approve Regulations on margins of solvency of the insurer (overcautious person), according to appendix 1.

2. To insurers till 30.09.2011 to give the assets accepted in covering of technical reserves and the minimum margin of solvency, in compliance with the regulations established in Provision Item 18.

3. Recognize invalid some regulations of the State inspectorate for supervision of insurance and non-state pension funds, according to appendix 2.

Appendix No. 1

to the Resolution of the National commission on the financial market of the Republic of Moldova of January 21, 2011 No. 2/1

Regulations on margins of solvency and liquidity rate of the insurer (overcautious person)

Chapter I. General provisions

1. This Provision establishes procedure of payments and the reporting, structure and components of the minimum margin of solvency (MMS) and free (actual) margin of solvency (SMP), categories of assets accepted in covering of technical reserves and the minimum margin of solvency, regulation of distribution of placements and liquidity rate of the insurer (overcautious person).

1-1. In content of the Provision of the reference to the insurer (overcautious person) and the minimum margin of solvency are read as references to insurance company and warranty minimum margin of solvency if other is not provided.

2. For the purpose of this provision the terms and determinations provided below have the following value:

quick assets - cash liquidity in cash desk, on settlement accounts, deposit accounts urgent or poste restante which can be withdrawn without restrictions, and securities which are easily converted into money without imposing of sanctions;

claimed losses - the paid losses increased by changes of reserve of not settled losses for certain accounting period;

declared gross - losses - the come losses, to deduction of the overcautious person's share corresponding to them;

declared net - losses - come gross - losses less the overcautious person's share from declared gross - losses;

funds of insurers - the total amount of assets, accepted by this Provision to covering of contractual debts of the insurer (overcautious person), and one second minimum margins of solvency according to the standard rates provided by placement regulations;

funds of the insurer (overcautious person) - the total amount of the assets accepted and provided by this Provision, others than what is represented by funds of insurers;

free (actual) margin of solvency - the amount on which the size of assets, excepting assets with zero cost, exceeds the debt size;

the minimum margin of solvency - the solvency margin calculated according to Item 8 and/or Item 9 of this provision which size cannot be below the minimum size of the authorized capital established by the law;

contractual debts (the debt accepted according to the policy of assurance) - the total amount of insurance technical reserves;

the standard rate of sufficiency of solvency - ratio between the size of actual margin of solvency and size of the minimum margin of solvency;

the risk amount - difference between insurance compensation and the mathematical reserve calculated according to insurance contracts which cover risk on death case;

warranty minimum margin of solvency – the size of the minimum margin of solvency of the insurer who owned the license for implementation of activities in insurance field of life or general insurance and who has the payment obligations following from insurance contracts (reinsurance) (further – insurance company).

2-1. The actuary of the insurer (overcautious person) shall check the assets accepted in covering of technical reserves, calculate the minimum and free margin of solvency, warranty minimum margin of solvency, the standard rate of sufficiency of solvency and liquidity rate according to appendices to this Provision. When implementing actuarial calculations the insurer (overcautious person) shall submit the documents requested by the actuary and information which are necessary for it for creation and preparation of obligatory actuarial calculations and conclusions, and bears responsibility for reliability of the provided data. The actuary bears responsibility for correctness and accuracy of the constituted actuarial calculations, estimates and conclusions.

Chapter II. Determination of structure and components of margin of solvency of the insurer (overcautious person)

3. The insurer (overcautious person) shall determine asset cost for calculation of free margin of solvency and constitute the report of the Form A – Assets according to appendix No. 1 separately on life insurance and general insurance.

3-1. Detailed data on each asset of certain category and on its cost are represented by the insurer (overcautious person) in the special asset register, the technical reserves accepted in covering, separately on life insurance and general insurance according to appendix No. 7 to this Provision.

4. The following assets are recognized with zero value:

1) intangible assets of the insurer (overcautious person);

3) the advance payments issued in any form;

4) receivables corresponding to the added awards with term more than 60 days from the moment of repayment by the provided insurance contract, except for receivables on the subsidized state to insurance premiums with the repayment period which is not exceeding 365 days from the effective date the insurance contract;

5) receivables of the overcautious persons who are not owning more license for reinsurance activities and also with term more than 90 days from the moment of repayment;

6) other receivables and advance payments which are not subject to repayment;

7) expenses, including purchasing, postponed;

8) reserves, others, than technical, intended to distribution by the insurer (overcautious person) and other dummy assets, other than preliminary expenses;

9) investment into securities of issuers at which permission to activities was withdrawn or which are in the procedure of insolvency;

10) the assets which are not corresponding to framework of restrictions of activities of the insurer, the stipulated in Article 28 Laws No. 407/2006 on insurance;

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