Insurance laws Estonia
Estonian insurance law is primarily governed by the Insurance Activities Act (IAA), which regulates and supervises insurance activities and mediation within the country. The Financial Supervision and Resolution Authority (Finantsinspektsioon) is the key regulatory body responsible for overseeing banks, insurance companies, and insurance intermediaries.
Key aspects of the insurance legal framework in Estonia include:
1. Types of Insurance:
Life Insurance: Covers the life and health of individuals.
Non-Life Insurance: Covers properties, rights, and obligations. This includes various sub-types like motor third-party liability, fire, accident, and financial loss insurance.
Reinsurance: Where an insurer gets insured for its obligations to its clients.
2. Compulsory vs. Voluntary Insurance:
Mandatory (Compulsory) Insurance: Certain types of insurance are legally required. Examples include:
Health Insurance: Primarily funded by social tax, and is compulsory for permanent residents and others who meet specific criteria.
Motor Third-Party Liability Insurance: Mandatory for all motor vehicles in use.
Unemployment Insurance: Governed by the Unemployment Insurance Act.
Voluntary Insurance: This includes various types of insurance such as home insurance, vehicle insurance (Casco), and private accident insurance, which are not legally mandated.
3. Regulation and Supervision:
The Financial Supervision and Resolution Authority (Finantsinspektsioon) is the main body that grants activity licenses to insurance undertakings and registers insurance intermediaries. It also supervises these entities to ensure they comply with the law.
The Estonian Insurance Association (EKsL) is a professional association that represents the interests of insurers operating in Estonia. It works to promote the development of insurance activities and harmonize practices among its members.
The Estonian Motor Insurance Bureau (LKF) is a separate entity that functions as a motor insurance guarantee fund and compensation body. All insurers offering motor insurance in Estonia are members of the LKF.
4. Insurance Intermediaries:
Insurance intermediaries are categorized into insurance brokers and insurance agents.
Insurance Brokers: Represent the interests of the customer (policyholder). They are required to identify the client's needs and recommend the most suitable contract from various insurance companies.
Insurance Agents: Represent the interests of a specific insurance company.
5. Consumer Protection and Contract Law:
The Law of Obligations Act and the Consumer Protection Act provide the legal basis for insurance contracts and consumer rights.
Insurance contracts must be comprehensible, and information regarding the nature and risks of the product must be provided to the customer in a way they can understand.
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