Insurance laws Albania
The insurance sector in Albania is governed by a legal framework that is being progressively aligned with European Union standards. The main regulatory and supervisory body is the Albanian Financial Supervisory Authority (AFSA).
Here's a breakdown of the key aspects of insurance laws in Albania:
1. Regulatory Framework:
Albanian Financial Supervisory Authority (AFSA): AFSA is the primary regulator for the insurance market, as well as the securities and voluntary pension fund markets. Its role includes licensing, supervising, and regulating insurance companies and intermediaries to ensure market stability and consumer protection.
Law "On the Insurance and Reinsurance Activity": This law, along with other normative acts and regulations, establishes the general principles and rules for insurance, reinsurance, and intermediary activities in Albania. It defines the rights and obligations of all parties involved.
EU Alignment: Albania's legal framework is in the process of aligning with EU directives, particularly Solvency II, which establishes capital and solvency requirements for insurance companies. This aims to create a more stable and transparent market and facilitate eventual EU membership.
2. Compulsory Insurance:
Several types of insurance are mandatory in Albania, including:
Motor Third-Party Liability (MTPL) Insurance: This is a key requirement for all vehicle owners. It covers personal injury and property damage to third parties in the event of an accident. Albania is a member of the Green Card System, which allows this insurance to be recognized in other member countries.
Compulsory Health Care Insurance: A law establishes a mandatory health care insurance scheme for all citizens. It is managed by the Mandatory Health Care Insurance Fund and is designed to ensure comprehensive healthcare coverage. Economically active individuals, including employees and the self-employed, contribute to the scheme, and the state covers contributions for certain inactive categories.
3. Key Regulations and Market Structure:
Licensing: Foreign and local companies must obtain a license from AFSA to operate in Albania. The process involves meeting specific financial requirements and submitting extensive documentation.
Cross-border Services: The law generally does not permit "non-admitted insurance," meaning insurance purchased from an insurer not licensed in Albania, for risks pertaining to individuals, property, or liability within the country. However, there are exceptions for international agreements.
Reinsurance: Insurers can cede a portion of their liabilities to local or foreign reinsurance companies that are approved by AFSA.
Consumer Protection: The legal framework includes provisions to protect consumers, such as rules regarding misrepresentation or non-disclosure of information in insurance contracts. If a policyholder intentionally provides inaccurate information, the insurer may have the right to amend the contract or terminate it.
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