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

of March 15, 2013 No. 10/9

About approval of the Regulations on permission of the conclusion of some transactions by insurers (reinsurers)

(as amended on 24-01-2014)

In pursuance of provisions of Art. 32 of h (3-1) Laws No. 407-XVI of 21.12.2006 "About insurance" (The official monitor of the Republic of Moldova, 2007, No. 47-49, the Art. 213), with subsequent changes and amendments, the National commission on the DECIDES: financial market

Approve Regulations on permission of the conclusion of some transactions as insurers (overcautious persons), according to appendix.

Deputy Chairman of the National commission on the financial market

Artur Hermann

Appendix

to the Resolution of the National commission on the financial market of the Republic of Moldova of March 15, 2013 No. 10/9

Regulations on permission of the conclusion of some transactions insurers (overcautious persons)

Chapter I. General provisions

1. This Provision establishes conditions, the procedure and procedure for issue of preliminary permission to investment more than 15% of equity of the insurer (overcautious person) in the authorized capital of some commercial societies, attraction based on agreements of borrowed funds in the amount of, exceeding 10% of the size of the authorized capital, and also the conclusion of large deals, and is applied to insurers (overcautious persons) owning the license for the right of implementation of insurance (reinsurance) activity.

2. For the purposes of this provision the following concepts are used:

Control - compliance of the insurer (overcautious person) to at least one of the following conditions:

a) owns independently or together with persons acting in coordination, the majority of voting shares or shares in commercial society;

b) owns independently or together with persons acting in coordination, the number of voting shares or shares which allows it to appoint or dismiss most of members of council of society, executive body or most of members of executive body and/or the auditor or most of members of audit committee;

c) exerts the dominating impact on commercial society, shareholder or the member of whom is, based on the contract with this commercial society or provision of the constituent act or the charter of society;

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

Cumulative transactions - several interconnected financial transactions made with one purpose which regardless of frequency of their making in total represent one transaction;

Persons acting in coordination - according to determination of article 6 of the Law No. 171 of July 11, 2012 "About the capital market" (The official monitor of the Republic of Moldova, 2012, No. 193-197, the Art. 665);

The transaction - any investment performed by the insurer (overcautious person) more than 15% of equity in the authorized capital of commercial societies, attraction by insurers (overcautious persons) based on agreements of borrowed funds in the amount of, exceeding 10% of the size of the authorized capital, and also the conclusion insurers (overcautious persons) of large deals;

Large deal - the transactions provided by Items a) and b) parts (1) article 82 of the Law No. 1134-XIII of April 2, 1997 "About joint-stock companies" (it is repeatedly published in the Official monitor of the Republic of Moldova, 2008, No. 1-4, by the Art. 1), with subsequent changes and amendments.

3. The insurer (overcautious person) makes transactions with the purpose of increase in profitability and profit earning, and results of transactions shall not infringe upon interests of owners (beneficiaries) of insurance policies or violate the law on the competition or other regulations applied to insurers (overcautious persons) and/or commercial societies and regulations.

Chapter II. Conditions of the conclusion of transactions

Section 1. General provisions

4. Before giving in the National commission on the financial market (further - the National commission) statements for issue of preliminary permission, any transaction affirms competent authority of management of the insurer (overcautious person).

5. The assets used within the transaction are applied in covering of technical reserves and margins of solvency in conditions and in the limits set in Regulations on margins of solvency and the liquidity rate of the insurer (overcautious person) approved by the Resolution of the National commission No. 2/1 of January 21, 2011 (The official monitor of the Republic of Moldova, 2011, No. 59-62, the Art. 310), registered in the Ministry of Justice at No. 812 of April 8, 2011, with subsequent changes and amendments.

6. Bargains are concluded with observance of prudential regulations of management of investment risk. In case of the conclusion of the transaction the insurer (overcautious person) shall make sure that his investment politicians and strategy cover the risks connected with the transaction and to reveal those risks which could affect negatively its financial position, and also specify specific measures which will be applied if the situation connected with risks according to the transaction will develop in the adverse direction, including in case of drawing or inevitability of emergence:

1) damage to management of assets and liabilities;

2) risk of financing of the capital;

3) damage to general profile of risk;

4) risk of default on obligations and risk of the credit;

5) the risk connected with investments into affiliated societies if commercial society or society to which the transaction belongs is member of group of companies or conglomerate.

7. Policy on identification, assessment and risk management on transactions shall be determined and implemented by the insurer (overcautious person) on the basis of the integrated view of assets and liabilities according to the balance sheet. Development the technician and models of management of assets and liabilities is based on the correct understanding and management of risk exposure, appearing on balance absence reason between assets and liabilities in the course of the conclusion of transactions.

8. All assets of the insurer (overcautious person), in particular those which cover solvency margins are traded so that to provide quality, reliability, liquidity and profitability of all asset portfolio.

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