New Insurance Law has come into effect

The new Insurance Law has come into effect on Friday 6, after in had received final approval in Parliament in December 2006. Insurance experts say that the new law will strengthen the insurance market by reducing the number of service providers from 32, operating at present, to 25. “First of all, insurers will become financially stronger. Secondly, they will enjoy equal development opportunities”, said Alexandru Munteanu, the head of the State Inspectorate for Supervision of Insurance and Non-state Funds and Pensions. The new law stipulates the increase to MDL 15 mln, within a 5-year term, of the authorised capital of the insurance companies selling all types of insurances. Insurance companies selling life insurance will have to increase their capital to MDL 22.5 mln, and those providing re-insurance services - to MDL 30 mln. In 2007, the companies will have to increase their minimal capital to MDL 4 mln compared to the previous MDL 2 mln. Octavian Lungu, director general of "Victoria-Asigurari" insurance company, foresights increased interest from investors in Moldova’s insurance market, once the new requirements have come into effect. Additionally, the law sets rules for the insurance brokerage services which, up to this moment, were often provided by companies that didn’t have an insurance character. Experts affirm that Moldova will thus finally reach the situation of the majority of CIS countries, where the authorised capital was increased to $ 1 mln long time ago. The law is also providing the mechanism for concluding an insurance deal, the clauses for an insurance contract, the regulation of insurance activities, the obligations and the sanctions to be applied, etc. In the future there are other 25 normative documents to be approved as to completely put into force the new law. The insurance companies will also have about one year to adjust to the newly approved requirements.