Insurance laws Kosovo
Kosovo's insurance sector is primarily regulated by the Central Bank of the Republic of Kosovo (CBK), which is responsible for the licensing, supervision, and regulation of insurance and reinsurance companies, as well as insurance intermediaries.
Here's a breakdown of key aspects of insurance laws and regulations in Kosovo:
I. Core Legal Framework:
Law No. 05/L -045 on Insurances: This is the primary law defining the basic principles and rules for the licensing, regulating, and supervision of entities within the insurance industry in Kosovo. Its purpose is to ensure a secure, stable, and transparent operation of the sector, protecting policyholders' interests and fostering fair competition.
Law No. 04/L -018 on Compulsory Motor Liability Insurances: This law specifically governs compulsory motor vehicle third-party liability insurance, which is a mandatory requirement for vehicle owners.
Law No. 04/L-249 on Health Insurance: This law establishes the framework for both mandatory and voluntary health insurance, aiming to provide universal access to basic healthcare services and financial protection against high healthcare costs.
II. Key Regulatory Principles and Provisions:
Licensing: No person or entity can engage in insurance, reinsurance, or insurance intermediation activities without a valid license issued by the CBK. Strict requirements apply for licensing, including capital adequacy, business plans, and "fit and proper" criteria for shareholders, directors, and senior managers.
Supervision: The CBK's Department of Insurance Supervision is responsible for the ongoing oversight of insurance institutions. This includes:
On-site supervision: Testing and verifying data provided by institutions.
Off-site supervision: Continuous analysis of information submitted by insurers and monitoring events that may impact their general condition.
Monitoring compliance with legal and regulatory frameworks, assessing risk management systems, and evaluating IT systems.
Protection of Policyholders: A central objective of the CBK's regulatory role is to protect the interests of policyholders and ensure they are informed about their insurance.
Solvency and Capital Requirements: Regulations aim to ensure insurers maintain adequate solvency and capital to cover their risks and obligations.
Technical Provisions: Insurers are required to calculate and maintain sufficient technical and mathematical provisions to cover envisaged activities and risks.
Fair Competition: The legal framework aims to ensure fair and regular competition, promoting the development and extension of insurance products and services.
Types of Insurance: The laws generally distinguish between:
Life Insurance: Covers risks within specific classes related to the life of the insured.
Non-Life Insurance: Covers various property and casualty risks, and currently dominates the Kosovo insurance market.
Compulsory Insurance: Mandated by law, such as motor third-party liability insurance.
Voluntary Insurance: Based on individual contracts, not legally required.
Insurance Contracts: The insurance contract defines the rights and obligations of the insurer and the insured. Key elements include the payment of premiums by the policyholder and the obligation of the insurer to pay out compensation in the event of an insured occurrence.
Regulation of Expenses and Commissions: The CBK has adopted regulations, such as the Regulation on the Management of Operating Expenses and Commissions of Insurers, to set criteria and restrictions on commissions and expenses for non-life insurers, aiming to improve financial performance and capacity to pay damages.
International Alignment: Kosovo's regulatory framework has been undergoing reforms to align with international best practices, including those of the International Association of Insurance Supervisors (IAIS) Insurance Core Principles (ICPs).
III. Regulatory Body:
Central Bank of the Republic of Kosovo (CBK): The primary authority for the regulation and supervision of the insurance sector. Its responsibilities include licensing, setting regulatory standards, monitoring compliance, and ensuring the stability of the financial system, including the insurance market.
The insurance market in Kosovo has seen positive development and ongoing reforms since its establishment after 1999, with the CBK playing a crucial role in its consolidation and oversight.
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