of May 22, 2007 No. ZR-177
About insurance and insurance activity
Accepted by National Assembly of the Republic of Armenia on April 9, 2007
Main objectives of this Law are protection of the rights of insurers, insured persons and beneficiaries, ensuring stable development, reliability and normal activities of system of insurance and creation of equal conditions for the free economic competition between persons performing insurance activity.
1. This Law governs the relations connected with the organization and implementation in the Republic of Armenia of insurance, reinsurance, insurance intermediary activity and creation, licensing, activities and the termination of activities of insurance companies (further - the Companies), the reinsurance Companies, persons performing insurance intermediary activity with implementation of the state control of insurance, reinsurance and insurance intermediary activity, and also other relations connected with insurance.
2. The foreign Companies can perform insurance activity in the territory of the Republic of Armenia without organization of branch or the affiliated legal entity by means of the public offer only if they are registered in the countries which are the parties of the agreements signed within the World Trade Organization which also the Republic of Armenia joined, at the same time they can perform the insurance connected only with the following risks:
1) maritime transports, civil aviation, launch of spacecraft, the freight (including the accompanying and service personnel). Such insurance can extend to the transported property transporting means and the responsibility following from transportation both on combined and on each of them separately;
2) international cargo transportation;
3) the reinsurance, retrocession and other services connected with reinsurance.
The insurance specified in this part can be performed in the territory of the Republic of Armenia by the foreign Company through insurance intermediaries or without them and shall correspond to the laws and other regulatory legal acts of the Republic of Armenia.
The concept of the territory of the Republic of Armenia is established by the Law of the Republic of Armenia "About frontier".
3. This Law does not extend to the fund guaranteeing compensation of deposits, created according to the procedure, established by the Law of the Republic of Armenia "About guarantee of compensation of bank deposits of physical persons", the State Social Insurance Fund of the Republic of Armenia, and also to banks and credit institutions – regarding provision of bank and credit guarantees, to the commercial organizations - regarding guarantee maintenance of the goods sold by them.
4. This Law does not extend to compulsory social insurance, however extends to the voluntary accumulative pension insurance performed by the Companies. The companies can perform only voluntary accumulative pension insurance according to the scheme "the established pensions" provided by the Law of the Republic of Armenia "About funded pensions".
5. Additional requirements to activities of the subjects performing activities of insurance, reinsurance as members of financial group, are established by the Law of the Republic of Armenia "About the Central bank of the Republic of Armenia.
1. In the Republic of Armenia insurance is regulated by the Constitution, international treaties of the Republic of Armenia, the Civil code of the Republic of Armenia, this Law, other laws and regulatory legal acts of the Central bank adopted on their basis.
2. The opinion requested by this Law and the conclusion of the Central bank shall be included in the relevant decision of Council of the Central bank which is made based on the drawn opinion or the conclusion.
3. Acts of Council, the Chairman and the Commission on licensing of the Central bank can be appealed judicially, and acts of the Commission on licensing – also according to the procedure of subordination (in case of which the protest is considered by Council of the Central bank), by persons whose rights are violated by these acts.
In sense of this Law:
1) aktuar – person having the corresponding qualification established by this Law who using mathematical, statistical and other techniques estimates possibility of approach of certain events and calculates the sizes of insurance rates, insurance premiums, insurance sum, technical reserves, pensions, annuities and other similar indicators;
2) personal data: for physical persons – surname, name, middle name, day, month and year of birth, the birthplace, the place of residence, nationality, data of the identity document, number of the social card (in case of its availability); for legal entities – the name or trade name, the location, the postal address, accounting taxpayer number, surname, name, middle name, day, month and year of birth, the birthplace, the place of residence, nationality, data of the identity document, number of the social card of person having power to act on behalf of the legal entity;
3) annuity – payment by the insurer to the insurer one-timely or with the frequency of the amount provided by the agreement provided by the agreement on account of which the insurer shall return to the insurer or the beneficiary paid amount and the income guaranteed by the agreement in time and with frequency, provided by the agreement;
4) insurance broker – the commercial organization having the license for implementation of insurance broker activity in the territory of the Republic of Armenia;
5) insurance broker activity – implementation by person of insurance intermediary activity from name and at the expense of the insurer, and in case of reinsurance – from name and at the expense of the Company or foreign insurance company;
6) insurance secret – become known in the course of insurance activity to the insurer, the overcautious person, to person performing insurance mediation, trade secret of the insurer, insured person or beneficiary or other data on the insurer, insured person or the beneficiary who the insurer or intended to save insured face in secret and the Company, the reinsurance company or the insurance intermediary are informed or shall be informed on this intention;
7) disclosure of insurance secret – publication or distribution in oral or written form through mass media or otherwise, bringing to data of the third party or the third parties of the data which are insurance secret, direct or indirect provision to the third parties of possibility of acquisition of similar data namely: permission, not preventing or creation of opportunity for this purpose owing to violation of procedure for storage of the similar data, except as specified, established by this Law;
8) insurance agent – person registered in the register of insurance agents of the Central bank for implementation in the territory of the Republic of Armenia of activities of insurance agent;
9) activities of insurance agent – implementation by person of insurance intermediary activity from name and at the expense of one or several insurance and (or) reinsurance companies;
10) insurance activity – set of the actual actions which are commited by person as the insurer, directed to the periodic conclusion of insurance transactions on its own behalf, and also on accomplishment of obligations assumed on them and implementation of the acquired rights;
11) insurance company (Company) – the legal entity having the license for insurance activity in the procedure established by this Law;
12) insurance intermediary activity – implementation by the third party of organizational, other actual and legal actions which induce to establishment of the insurance relations between insurers (overcautious persons) and insurers, the conclusion between them of the insurance contract promote, help it, in particular:
and. implementation of preparatory work on the conclusion of insurance contracts and reinsurance, including implementation of insurance consultations,
. the organization of the conclusion by insurers of insurance contracts and reinsurance with specific insurers,
century assistance to agreement performance of insurance and reinsurance, including collection of insurance premiums and implementation of transfer of insurance indemnities in the sizes permitted by the insurer or the Company;
13) insurance portfolio – set of the rights and obligations following from all insurance contracts signed by the insurer or insurance contracts of one class;
14) insurer – The company or branch of the foreign Company operating in the territory of the Republic of Armenia;
15) the insurer – the insurance agreement party which or specified which to person (beneficiary) the insurer according to terms of the contract of insurance shall compensate the harm done as a result of approach of the case (insured event) provided by the insurance contract or its part or to provide certain amount owing to approach of the case (insured event) provided by the insurance contract;
16) share – the share, share, share;
17) Central bank – Central bank of the Republic of Armenia;
18) the competition, the economic competition, dominant position – according to the Law of the Republic of Armenia "About protection of the economic competition";
19) reinsurance company – The company which is engaged in exclusively reinsurance activities;
20) the overcautious person – person having the license for reinsurance implementation;
21) reinsurance – insurance by one insurer at other insurer on the conditions of the risk connected with accomplishment concerning insurers of all the obligations or their part determined by the agreement;
22) reinsurance activities – insurance as business activity of the risk connected with accomplishment by other insurers of all obligations or their parts concerning insurers;
23) under control person – the insurer, the overcautious person, person performing insurance intermediary activity, the legal entity (partner) who is carrying out work on the agreement of delegation of functions of insurance;
24) technical reserves – the special reserves created for the purpose of guaranteeing normal and reliable activities of the Company, covering of the obligations which are available and arising in the future and the possible losses of the Company following from insurance contracts;
25) the financial organization – bank, credit institution, the Company, person performing professional activity in the security market and also the face which is considered as the financial organization according to the foreign legislation.
26) OSAO – compulsory liability insurance for use of vehicles;
27) Bureau – The bureau created according to the Law of the Republic of Armenia "About compulsory liability insurance for use of vehicles".
28) the insurance company having system value – the Company is considered the Central bank having system value if deterioration in financial position or insolvency or bankruptcy or liquidation of this company can make essential negative impact on financial system and (or) other sectors of the Republic of Armenia.
The essential negative impact on financial system and (or) other sectors of the Republic of Armenia is estimated, assuming as a basis the size of this Company, interrelation with other participants of financial system of the Republic of Armenia, replaceability of the services rendered by the Company, nature, complexity and (or) risk-taking of the actions performed by the Company. Central Bank, assuming as a basis the criteria established by this Item establishes procedure for recognition of the Company having system value".
1. The words "insurance" and "insurance", their derivatives, case forms or the translations, and also transcription of these words in foreign language in the name, advertizing or otherwise can use only the created in the procedure for person established by this Law, having license or the right to implementation of insurance, reinsurance or insurance intermediary activity, except as specified, when explicitly follows from sense of use of the words "insurance", "reinsurance", "insurance broker", "insurance agent", "insurance intermediary" or "insurance" that it does not belong to insurance, reinsurance or insurance intermediary activity.
When implementing insurance, reinsurance or insurance intermediary activity of person, obtained the license, shall within 90 days from the moment of receipt of the license include the words "insurance", "insurance", "reinsurance" in the name, and within 30 days from the moment of recognition of such license of invalid or its delivery to exclude them from the name.
2. Insurance or reinsurance activity can be advertized only by person having the license for implementation of insurance or reinsurance activity in the procedure established by this Law or by its order.
3. Activities of insurance agent can be advertized only by person having license for activities of insurance agent in the procedure established by this Law or by its order.
4. Insurance broker activity can be advertized only by person having the license for implementation of insurance broker activity in the procedure established by this Law or by its order.
1. The insurers, overcautious persons and persons performing insurance intermediary activity for the purpose of coordination of the activities, representation and protection of the interests, exchange of information and the joint solution of other tasks can create the unions of the insurers, overcautious persons or persons performing insurance intermediary activity, not pursuing profit earning aims and (or) to participate in them.
2. The unions of the insurers, overcautious persons or persons performing insurance intermediary activity cannot perform insurance, reinsurance or insurance intermediary activity.
3. The unions of the insurers, overcautious persons or persons performing insurance intermediary activity in 10-day time from the moment of state registration inform on it the Central bank, reporting about the place of their stay, about bodies of their management and about heads, and also about their change in the future – in 10-day time after changes.
4. Membership in Bureau cannot limit the right to creation of the insurance unions by insurance Companies and membership in them.
1. In the Republic of Armenia voluntary and compulsory insurance can be performed.
2. Cases, procedure and conditions of implementation of compulsory insurance are established by the law.
1. Treat types of insurance:
1) any other insurance, except life insurance (further – insurance not of life);
2) life insurance;
2. Belong to the classes of insurance not of life:
ampere-second the fixed cash compensation,
. with compensation – depending on nature of case,
century according to subitems "an" and "b" of this Item together,
ampere-second the fixed cash compensation,
. with compensation – depending on nature of case,
century according to subitems "an" and "b" of this Item together;
and. to land motor transport,
. to other land carriage;
and. to river transport vehicles and means of transportation across canals,
. to lake transport vehicles,
century to sea (ocean) transport vehicles;
8) fire insurance and natural disasters which covers the harm and losses caused to property (except for the types of property carried to the classes established by Items 3-7 of this part) owing to the following cases:
nuclear infection, damage and other,
9) insurance upon other harm done to property which covers the harm and losses caused to property (except for the property carried to the classes established by Items 3-7 of this part) owing to the following cases which are not specified in classes stipulated in Item the 8th this part:
epidemic, quarantine diseases,
e. other disasters of natural and technogenic nature, accident and cases, including also plunder of property;
11) liability insurance, following from use of aircrafts (also – transporting freights);
13) insurance of the common responsibility (all types of responsibility which are not included in the classes provided by Items 10-12 of this part);
and. insolvency (general),
. export loan,
century of the obligation of payment by installments (on credit),
of mortgage loan,
of agricultural loan,
e. insurance of other credit;
. straight lines;
16) insurance of the financial harm arising from:
and. working risks,
. short-receptions of the income (general),
century of bad weather,
of lost profit,
of fixed (current) total expenses,
e. unforeseen business expenses,
. losses of market value,
h. losses of the rent or other income,
and. the indirect commercial losses which are not specified in subitems of "a"-"z" of this Item
to. other financial non-commercial losses,
l. other forms of financial losses;
18) insurance of assistance which covers provision of assistance to the traveling persons or persons who are far from the place of the permanent residence. The subitems of Item of this part establishing each class of insurance not of life are considered separate as subclasses of this class of insurance not of life.
3. In case of implementation of insurance activity on more than one class of insurance not of life the following groups of classes of insurance are allocated:
4) "aviation insurance" - on the classes provided by the subitem "g" of Item 1, and also Items 5, 7 and 11 parts 2 of this Article;
6) "liability insurance" - on the classes provided by Items 10-13 of part 2 of this Article;
7) "insurance of the credit and provision of a guarantee" - on the classes provided by Items 14 and 15 of part 2 of this Article;
4. Belong to the classes of life insurance:
1) the life insurance including insurance of survival, death, survival and at the same time death, annuity, performed in addition to the life insurance contract the accidents insurance specified in Item 1 of part 3 of this Article, the health care insurance and other insurance specified in Items 2-6 of this part;
2) insurance of scrap and birth;
3) insurance in connection with investment assets when insurers assume investment risk;
4) management of means of voluntary accumulative pension insurance according to the scheme "the established pensions" provided by the Law of the Republic of Armenia "About funded pensions", the including asset management (investments) of the pension funds provided for payment of compensations in cases of survival, death and disability which is combined with insurance of payment of the minimum profitability;
5) tontin in case of which of all insurance premiums the reserve and cumulative assets is created subsequently are distributed between the members who reached certain age or beneficiaries of the died members;
6) indemnity insurance of the capital on which the insurer on account of previously stipulated one-time or periodic insurance premiums assumes liability on payment of certain amount in certain time.
5. Belong to the classes of reinsurance:
1) reinsurance not of life;
2) life reinsurance.
1. The companies and the reinsurance Companies can be created in the procedure established by this Law only as joint-stock company or limited liability company.
2. Activities of the insurance and reinsurance Companies and persons performing insurance intermediary activity are regulated by the Constitution of the Republic of Armenia, the international treaties of the Republic of Armenia, the Civil code of the Republic of Armenia, this Law adopted on the basis of this Law by regulatory legal acts of the Central bank, other laws and legal acts.
3. Provisions of the Civil code of the Republic of Armenia, the laws of the Republic of Armenia "About joint-stock companies", "About limited liability companies" and other legal acts are applied to the Companies, depending on form of business of the Company.
4. The precepts of law concerning the Companies or established for them by this Law or regulatory legal acts of the Central bank extend also to the branches of the foreign Companies, the reinsurance Companies and persons performing insurance intermediary activity, except as specified when this Law or regulatory legal acts of the Central bank establishes other operating in the territory of the Republic of Armenia or follows from being of the precept of law that the speech cannot go about the branch of the foreign Company, the reinsurance Company or person performing insurance intermediary activity operating in the territory of the Republic of Armenia.
1. The company charter shall establish and include:
1) trade name of the Company;
2) Company location;
3) form of business of the Company;
4) types and classes of insurance which will be performed by the Company;
5) size of the authorized capital;
6) procedure for use of profit and covering of losses;
7) structure, competence of governing bodies of the Company and procedure for adoption of decisions by them;
8) procedure for publication of information on the Company and its participants established by this Law;
9) procedure for liquidation of the Company;
10) procedure for the choice of person performing external audit of the Company;
11) procedure and conditions of dividend payout;
12) procedure for creation and termination of activities of branches and representative offices;
13) procedure for preparation and holding general meeting of members of the Company;
14) procedure for convocation and holding meetings of governing bodies of the Company in the correspondence procedure;
15) other data established by the law or regulatory legal acts of the Central bank.
2. Entering of amendments and changes into the company charter, and also approval of the company charter is in the new edition made by the decision made 3/4 voices on general meeting of members of the Company.
1. The company has trade name which shall include the word "insurance", and trade name of the Company which is engaged only in reinsurance - the word "reinsurance".
2. The requirement of part of 1 this Article does not extend to the unions of the insurers, overcautious persons and persons performing insurance intermediary activity.
3. The companies have no right to use in the trade names such disorienting words which can be the cause for the distorted idea of financial condition or legal status of this Company.
1. The Republic of Armenia, foreign states, municipalities of the Republic of Armenia or foreign state can be members of the Company only in the cases and procedure established by the law.
2. Batches and labor unions cannot be members of the Company.
3. The Republic of Armenia can establish the insurance company which is engaged in insurance of export and (or) to be member of this society. This society is competent to perform export insurance: on class of insurance of the credit, on class of provision of a guarantee and on class of financial losses (including the subclasses entering these classes) on the basis of the corresponding license provided by the Law of the Republic of Armenia "About insurance and insurance activity". The size of the general capital of this society at the time of creation shall be at least the size of the general capital established for again created insurance companies in the territory of the Republic of Armenia. In case of decrease in the course of activities of this society of the size of the general capital of society of the size of the general capital which was less established for the insurance companies in the territory of the Republic of Armenia, replenishment of this capital is performed according to the procedure, established by the legislation of the Republic of Armenia.
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