New Insurance Code
On 1 January 2016, an entirely new Insurance Code (the "Code") entered into force. Most importantly, the new Code implements the requirements under Solvency II Directive on insurance and reinsurance companies in relation to their risk and capital management. In addition, by virtue of the Code the legislator aimed further protection of consumers and existence of a stable, transparent and effective insurance market.
With regard to the solvency of insurance companies, the Code has introduced wider options for the Financial Supervision Commission in relation to its oversight of the industry. Further, the Code has provided new rules on the capital requirements for companies in the sector, the calculation of their reserves, as well as their investment strategies. A new "risk based" approach of supervision is to be implemented, whereas the management of insurance / reinsurance companies will be subject to specific requirements.
The Code has refined the framework for insurance agreements by detailing its minimum required requisites, imposing detailed rules on prescription periods, as well as by instituting preliminary and retroactive insurance coverage. Further several new definitions of terms and words common for insurance agreements have been introduced.
The Code have introduced other improvements to the current legislation in the field of settlement of insurance claims, distribution of insurance products, insolvency of insurance companies. For further detailed analysis of the new Code, please click here.