law regarding the insurance business and insurance supervision

8/2/2019 Law Regarding the Insurance Business and Insurance Supervision

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Law regarding the insurance business and insurance supervisionCodified Version(Law no. 32/2000, amended and completed by Law no. 76/2003, Law no. 403/2004and Emergency Government Ordinance no. 201/2005 and Law no 113/2006)

CHAPTER I

Scope of the Law, interpretation of terms and types of insurance

Article 1

This law provides for: the taking-up and the activity of insurance, insurance-reinsurance and reinsurers, of mutualcompanies, called hereinafter insurers and, reinsurers, respectively, as well as of insurance intermediaries; the InsuranceSupervisory Commission establishment and activity, the supervision of the activity of insurers and reinsurers pursuing an activity inand from Romania, of insurance and reinsurance intermediaries, as well as for other related activities.

Article 2

For the purposes of this law, the terms and expressions have the following means:

A. Common definitions:

1. insurance business - the business pursued in or from Romania, it mainly consists to offer, to mediate, to negotiate, tounderwrite insurance and reinsurance contracts, to collect premiums, to settle claims, the regressing and recovering activities, aswell as investment or capitalization of own and acquired funds from insurance business;

3.insurance - the activity through which an insurer forms an insurance fund, using the principle of mutuality among a largenumber of insureds exposed to specific risks, and pays indemnities to those who experience losses from the fund constituted fromcollected premiums, as well as from other income generated by the business;

4.insured - the person who concluded an insurance contract with the insurer;

5. insurer Romanian legal person authorized according to the present law to pursue insurance business, branch orsubsidiary of an insurer from a third country, as well as the branch of an insurance undertaking or of a mutual undertaking from aMember State, which was granted authorization from the competent authority of the home Member State

7.catastrophe - an event or a series of events that causes substantial damages within a short period of time;

8.co-insurance - the operation through which two or more insurers underwrite the same risk, each of them underwriting ashare of the overall risk;

9.paid-up free reserve fund - the total of the amounts representing contributions of the members to an insurance mutualcompany funds;

10. qualifying holding - any person who solely or intermediated by or related to other natural or legal person exerting rightsin respect of the shares owned, which, cumulated, represent at least 10% of an insurer/reinsurer share capital or it offers him atleast 10% of the total voting rights or which gives him the possibility to exert a significant influence over the management of aninsurance/reinsurer, insurance and/or reinsurance broker in which a holding subsists, by case;

11. significant persons -the board members and/or of the board of directors and/or of the supervision council, the executivemanagement, the actuary, the managers for the life and of the general insurance business, in the case of composite insuranceundertakings, the persons appointed for management positions specific to the insurance business, which shall be establishedthrough Regulations issued in the application of the present Law, as well as, by case, the executive management of the insuranceand/or reinsurance intermediary and the members of the board of directors of the Street s Victims Protection Fund;

111. the insurance/reinsurance executive management natural persons, at least 2, of which one, according to the

constitutive documents and/or to the decisions of the statutory bodies of the insurer or reinsurer is the rightful substitute of theperson empowered to manage and coordinate the daily activity, and also is entitled to engage the insurance or the reinsuranceresponsibility; the persons in charge with the direct management of the departments within the insurer and reinsurer, as well asthose who run branches and other secondary offices, do not fall under the category above. For the branches of the insurance andreinsurance undertakings form the Member States, pursuing business within Romanian territory, according to the right of


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establishment, the executive management is represented by the persons empowered by these to run the activity of the branch andto legally represent the insurance or the reinsurance undertaking in Romania;

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the insurance and/or reinsurance intermediary executive management the natural person, or, in the case of theintermediaries that have legal form of share company, the natural persons, at least 2, one of which, according to the constitutivedocuments and/or the decisions of the statutory bodies of the insurance and/or reinsurance intermediary, is the rightful substitute ofthe person empowered to manage and coordinate the daily activity as well as entitled to engage insurance and/or reinsuranceintermediary responsibility; the persons in charge with direct management of the insurance and/or reinsurance intermediary

departments, of the branches and of the other secondary offices do not fall under the category above. For the branches of theinsurance and/or reinsurance intermediary from the Member States, pursuing business in Romania according to the right ofestablishment, the executive management is represented by the person/persons empowered by these to manage the branch activityand to legally represent the insurance and/or reinsurance intermediary in Romania;

12.insurance portfolio - all or part of the insurance contracts concluded by an insurer;

13. underwritten gross premiums - the premiums collected and to be collected, including reinsurance premiums receivedand to be received, for all insurance and reinsurance contracts entering into force during the referred period, before any deductionfrom them to be made;.

14. net written premiums - gross written premiums after deduction of the amounts paid or to be paid as reinsurancepremiums;

15.gross collected premiums - the amount of the collected premiums, including reinsurance premiums collected in thereference period, before deducting any amounts from them;

16.net collected premiums - the gross collected premiums from which the amounts paid as reinsurance premiums arededucted;

17. reinsurance insurance of an insurance or a reinsurer by a reinsurer;

18.own retention - the share of the risk which remains covered by the insurer, after deduction of reinsurance;

19. insurance mutual company - the civil body corporate whose associates are both insureds and insurers;

20.Member States the European Union Member States and the states belonging to the European Economic Area;

21. competent authorities the national authorities that, by law or other regulations, are empowered to supervise theinsurance market;

22.non-member-country a state that is not a member of the European Union or of the European Economic Area;

23.unit of account EURO as it is defined in by Article 4 of the Statute of the European Investment Bank. For ROLequivalent will be used the National Bank of Romania exchange rate for EURO, communicated for 31 of December of the reportingfiscal year;

24.durable medium - any instrument which enables the customer to store information addressed personally to him in a wayaccessible for future reference for a period of time adequate to the purposes of the information and which allows the unchangedreproduction of the information stored from the floppy disks, CD-ROMs, DVDs and hard drives of personal computers on whichelectronic mail is stored, but it excludes Internet sites, which are not fulfilling the criteria to store and reproduce information.

B. Insurers definitions:

25. host Member State the Member State, other then home Member State, in which the insurer or the reinsurer pursueinsurance business;

26. home Member State the Member State in which the head office of the insurance or reinsurer covering thecommitment is situated;

27. non-member-country undertaking the legal person whose real head office is outside the European Union, whosesubsidiaries on the European Union market are acting under the authorization of the Member State competent authorities; Real


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head office means the main governing and administration center, even though the executive decisions are taken according to theshare holders or other states associates disposals.

28. parent undertaking a legal person who, towards a legal entity hereinafter named subsidiary undertaking, is in one ofthe following situations:

a) holds directly and/or indirectly the majority of the voting rights in a subsidiary undertaking;

b) has the right to appoint or revoke the majority of the members of administrative or control body, as well as the majority ofthe management of a subsidiary, and in the same time is shareholder or associate of the said subsidiary undertaking;

c) has the right to exercise a dominant influence over a subsidiary undertaking, of which it is shareholder or associate,according to the clauses of the contracts concluded with the said legal person, or according to some provisions of the constitutiveact of the said legal person, in the case that the legislation governing the subsidiary statute allows the existence of such clauses orprovisions;

d) is a shareholder in or an associate member of a subsidiary, and for the last two years he appointed solely as a result ofthe exercise of its voting rights, the majority of the members of the administrative or control bodies or the majority of themanagement of the subsidiary.

e) is a shareholder in or associate of a subsidiary, and solely controls, according to an agreement with other shareholders orassociates, the majority of the voting rights in the said subsidiary, as well as any undertaking which, in the opinion of the Insurance

Supervisory Commission, effectively exercises a dominant influence over another undertaking;

29.branch an agency or branch of an insurance or reinsurer; Any permanent presence of an undertaking in the territoryof a Member State shall be treated in the same way as an agency or branch, even if that presence does not take the form of abranch or agency, but consists merely of an office managed by the undertaking's own staff or by a person who is independent buthas permanent authority to act for the undertaking as an agency would

30. participating interest the rights in the capital of other bodies, represented or not, by certificates, which, through a solidlink with these bodies, are designated to contribute to the body s activities. It is assumed to represent a participating interest apercentage of maximum 20% held by a body in the share capital of another body.

31. participation the direct or by way of control ownership of at least 20% of the voting rights of the capital of anundertaking.

32. participating undertaking an entity that is either a parent undertaking, or another entity which holds a participation,or an entity related to another entity, relationship defined as follows:

a) the unique management of the respective entity and one or more entities to whom is not related, as a result of a contractconcluded with the respective entity or according to some provisions from the constitutive acts or from other entities statute; or

b) by the majority of the same persons in the Council, the executive management or in the supervisory council of therespective entity and of one or more entities to whom is not related, during the financial year and until the consolidated financialreturns;

33. related undertaking a subsidiary or other undertaking in which a participation is hold or an entity related to anotherentity, relationship defined as follows:

a) the unique management of the respective and one or more entities to whom is not related, as a result of a contractconcluded with the respective entity or according to some provisions from the constitutive acts or from other entities statute; or

b) by the majority of the same persons from the Council, the executive management or supervisory council of the respectiveentity and of one or more entities to whom is not related during the financial year and until the consolidated financial returns

34.insurance holding company a parent undertaking, the main business of which is to acquire and hold participations insubsidiaries undertakings, where those subsidiary undertakings are exclusively or mainly insurers, reinsurersor non-member-country insurers, at least one of such subsidiary being an insurer;

35.mixed-activity insurance holding company is a parent undertaking, other than an insurer, a non-member-countryinsurer, a reinsurer, an insurance holding company, which includes at least one insurer among its subsidiary undertakings;


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36. localization of assets represents the existence of assets, whether movable or immovable, within a Member State;assets represented by claims against debtors shall be regarded as situated in the Member State where they are achievable;

37.matching assets the representation of underwriting liabilities, which can be required to be met in a particular currencyby assets expressed or achievable in the same currency.

38.close links a situation in which two or more natural and/or legal persons are linked by:

a) participation the ownership, direct or by way of control, of 20 % or more of the voting rights or capital of an undertakingor;

b) control - the relationship between a parent undertaking and a subsidiary, or a similar relationship between any natural orlegal person and an undertaking as defined at point 26. All direct or indirect subsidiaries shall also be considered a subsidiary of thesame parent undertaking.

c) two or more natural or legal persons are permanently linked to one and the same person by a control relationship;

39. reinsurer Romanian legal person authorized according to the provisions of this law to pursue insurance business, andalso, the branch of an reinsurer or of an insurance holding company or of a mixed-activity insurance holding company from aMember State which received an official authorization from the competent authority of the home Member State, the main businessof which consists in reinsurance;

40.establishment the head office of an insurer/reinsurer, insurance intermediaries/reinsurance intermediaries as well asan agency or a branch of these, by case;

41. commitment a commitment represented by an insurance contract;

42.Member State of the branch the Member State in which the branch covering the commitment is situated;

43.Member State of the commitment the Member State where the policyholder has his/her habitual residence or, if thepolicyholder is a legal person, the Member State where the latter's establishment, is situated;

44.Member State of the provision of services the Member State of the commitment, if the commitment or the risks arecovered by an insurer or a branch situated in another Member State;

45.subsidiary undertaking a legal entity related to a parent undertaking by one of the situations laid down in point 26.All the subsidiaries of the subsidiary undertakings shall also be considered subsidiaries of the parent undertaking regarding theconsolidated supervision;

46. regulated market a) in the case of a market situated in a Member State-a multilateral system operated and/ormanaged by a market operator, which brings together or facilitates the bringing together of multiple third party buying and sellinginterests in financial instruments in the system and in accordance with its nondiscretionary rules in a way that results from acontract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorized byMember State competent authority and functions regularly according to that member stat competent authority requirementsand,

b) in the case of a market situated in a third country - a financial market recognized by the home Member State of theinsurer which meets comparable requirements. Any financial instruments dealt in on that market must be of a quality comparable tothat of the instruments dealt in on the regulated market or markets of the Member State in question;

47. sum at risk the difference between the insurance indemnity and the mathematic reserve established for the insurance

contracts covering death risk;

471. actuary natural person, registered in the Actuary Register, according to the provisions of the present Law and of the

Regulations issued in its application, specialised in risk assessment through statistical methods, which are used in the calculation ofthe premiums, in the insurance sector, of the technical reserves and of the annuities;

48.claims representatives units in each Member State designated by the Romanian insurersauthorized for class 10from annex 1, point B, excluding the carrier s liability, which shall be responsible for handling and settling claims arising from anaccident caused by a vehicle;


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481. compensation body- body that pays claims to the injured persons following an accident occurred on the territory of a

Member State, other than the one in which the injured person has its residence, caused by a vehicle registered and insured withinthe territory of a Member State;

49.group a group of undertakings, which consists of a parent undertaking, its subsidiaries and the entities in which theparent undertaking or its subsidiaries hold a participation, as well as any entity related with a parent undertaking by one of thesituations laid down in point 30;

50. intra-group transactions all transactions by which an insurer, a credit institution, or an investment firm within afinancial conglomerate rely either directly or indirectly upon other undertakings within the same group or upon any natural or legalperson linked to the undertakings within that group by close links, for the fulfillment of an obligation, whether or not contractual, andwhether or not for payment;

51.financial conglomerate a group which meets the following conditions:

a) an insurer, a credit institution, or an investment firm which is at the head of the group or at least one of the subsidiaries ofthe group is an insurer, a credit institution, or an investment firm;

b) where there is an insurer, a credit institution, or an investment firm at the head of the group, it is either a parentundertaking of an entity in the financial sector, an entity which hold a participation in an entity in a financial sector, or in an entityrelated with an entity in the financial sector by one of the situations laid down in point 30;

c) where there is no insurer, credit institution, or investment firm at the head of the group, the group s activity mainly occurin the financial sector, meaning that over 40% of the ratio of the balance sheet total of the group is from financial sector entities;

d) at least one in the entities of the group is within the insurance sector and at least one is within the banking or investmentservices sector;

e) the consolidated and/or aggregated activities of the entities in the group within the insurance sector and the consolidatedand/or aggregated activities of the entities within the banking and investment services sector are both significant

Any subgroup of a group which meets these conditions shall be considered as a financial conglomerate.

52.mixed financial holding company a parent undertaking, other than an insurer, credit institution, or an investmentfirm, which together with its subsidiaries, at least one of which is an insurer, a credit institution, or an investment firm which has itshead office in the European Union, and other entities, constitutes a financial conglomerates;

53.control the relationship between a parent undertaking and a subsidiary or a similar relationship according to one ofthe relations described at point 36 between any natural or legal person and an undertaking;

54. Member State where the risk is situated:

a) the Member State in which the property is situated, where the insurance relates either to buildings or to buildings and theircontents, in so far as the contents are covered by the same insurance policy,

b) the Member State of registration, where the insurance relates to vehicles of any type,

c) the Member State where the policyholder took out the policy in the case of policies,of a duration of four months or less,covering travel or holiday risks, whatever the class concerned,

d) the Member State where the policyholder has his habitual residence or, if the policy-holder is a legal person, the MemberState where the latter's establishment is situated.

541. composite the insurance undertaking authorized to pursue in the same time life assurance and non-life insurance;

C. Insurance intermediaries definitions:

55. insurance intermediaries natural or legal bodies, hereinafter named insurance broker, insurance agent, subagent ortied insurance agent, pursuing insurance intermediary activity for a commission/remuneration, authorized or registered according to


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the present Law and of the Regulations issued in its application, as well as, Member States intermediaries pursuing intermediaryinsurance activity within Romanian territory, according to the right of establishment and freedom to provide services, by case;

56. reinsurance intermediary - Romanian natural and legal person authorized according to the provisions of the present Law,hereinafter named reinsurance broker, which intermediates, for a commission/remuneration, mainly the reinsurance activity, as wellas the Member States intermediaries pursuing intermediary reinsurance business within Romanian territory, according to the right ofestablishment and freedom to provide services, by case;

57. insurance broker:

a) Romanian legal person, authorized according to the provisions of the present Law, which negotiates for its clients, naturalor legal persons, insureds or potential insureds, the conclusion of the insurance or reinsurance contracts and provides assistancebefore and during the contracts on going or regarding the loss adjustment, by case

b) an intermediary registered with a competent authority of a Member State pursuing mediation activity in the insurancebusiness based on the right of establishment and freedom to provide services on the Romanian territory;

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broker assistants natural or legal persons who on the basis of an insurance contract concluded with an insuranceand/or reinsurance broker are empowered with a brokerage mandate of the latter, and under the coverage of the broker s thirdparty liability contract, have to pursue certain activities in order to fulfill the brokerage mandate;

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brokerage mandate the contract concluded between an insured or a potential insured, as a mandate, and the

insurance and/or reinsurance broker, as representative, empowering the representative to negotiate or to conclude the insuranceand/or reinsurance contracts, to provide assistance before and during the contracts, or regarding loss adjustment, by case;

58.insurance agent a natural or legal person mandated by an insurance or reinsurer to conclude for and on behalf of theinsurance or reinsurer insurance contracts with third parties, under the conditions stipulated in the mandate, without possessing thepower of an insurer, reinsurer, insurance and/or reinsurance broker;

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subagents natural bodies, other than the insurance agent manager, legal person, who have concluded a laborcontract with the legal person and act on its behalf;

582. tied agents natural or legal bodies who pursue insurance intermediary activity on behalf and on the account of one or

more insurance undertakings, case in which the insurance intermediated products do not have to compete, these acting under thetotal responsibility of those insurance undertakings, according to the intermediated products. It is deemed tied agent the natural orlegal person pursuing insurance intermediary activity, besides its main professional activity, if the intermediated insurance productsare complementary to the goods or services provided by the credit institutions.

59. home Member State for the intermediary:

(a) where the intermediary is a natural person, the Member State in which his residence is situated and in which he carrieson business;

(b) where the intermediary is a legal person, the Member State in which its registered office is situated or, if under itsnational law it has no registered office, the Member State in which its head office is situated;

60.host Member State for the intermediary Member State,other than the home country, in which an insurance orreinsurance intermediary pursues an insurance mediation business according to the right of establishment and the right to provideservices;

61.branch of an insurance or reinsurance intermediary a non-legal person unit of an insurance or reinsurance

intermediary which, under a mandate, is carrying on all or part of the business.

62. insurance mediation - means the activities of introducing, proposing or carrying out other work preparatory to theconclusion of contracts of insurance, or of concluding such contracts, or of assisting in the administration and performance of suchcontracts, in particular in the event of a claim.

These activities when undertaken by an insurer or an employee of an insurer who is acting under the responsibility of theinsurer shall not be considered as insurance mediation.


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The provision of information on an incidental basis in the context of another professional activity provided that the purpose ofthat activity is not to assist the customer in concluding or performing an insurance contract, the management of claims of an insureron a professional basis, and loss adjusting and expert appraisal of claims shall also not be considered as insurance mediation;

63. reinsurance mediation - means the activities of introducing, proposing or carrying out other work preparatory to the conclusionof contracts of reinsurance, or of concluding such contracts, or of assisting in the administration and performance of such contracts,in particular in the event of a claim.

These activities when undertaken by a reinsurer or an employee of a reinsurer who is acting under the responsibility of thereinsurer are not considered as reinsurance mediation.

The provision of information on an incidental basis in the context of another professional activity provided that the purpose ofthat activity is not to assist the customer in concluding or performing a reinsurance contract, the management of claims of areinsurer on a professional basis, and loss adjusting and expert appraisal of claims shall also not be considered as reinsurancemediation;

64. bancassurance the distribution activity of the insurance products complementary to the credit institutions products,carried on trough the credit institutions networks and/or through mutual distribution channels for offering the insurance and creditinstitution products, according to the provisions of the present Law and to the Regulations issued in its application.

65. The territory where the vehicle is normally based the territory of the state where the vehicle is registered or:

- in the case where no registration plates are required a certain type of vehicle, but the vehicle bears insurance plates, or adistinguishing sign analogous to the registration plates, the territory of the State in which the insurance plates or the sign are issued,or

- in cases where neither the registration plates nor the insurance plates or the distinguishing sign are required for certain types ofvehicles, the territory of the State in which the person who owns the vehicle is permanently resident;

Article 3

(1) The insurance activity is divided in:

a) life assurance

b) general insurance

(2) An insurer may carry on only one of the two categories of insurances provided for in paragraph (1).

(21) The composites authorized until December 31, 2005 as well as the insurance undertakings authorized to pursue

insurance business according to the provisions of the article 12, paragraph (11) of the present Law, are excluded from theprovisions of paragraph (2), the latter not being deemed as having composite activity.

(3) The classes of insurance related to the categories provided in paragraph (1) are established by Annex no.1 to this law.

CHAPTER II

The Insurance Supervisory Commission

Article 4

(1) The application of this law, the supervision and control of its observance are in the charge of the Insurance SupervisoryCommission, that aims to protect the insured persons' rights and to promote the stability of the insurance business in Romania.

(2) The Insurance Supervisory Commission is established, an administrative autonomous self-financed specialized authority,having legal status and having the head-office in Bucharest, pursuing its activity according to the provisions of the present Law.

(3) The Insurance Supervisory Commission may open a representative office in any other cities in Romania.


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(4) For the activities of the Insurance Supervisory Commission, of its representative offices that it establishes, theGovernment and, if the case may be, the local authorities, shall assign for its administration the necessary premises - land andbuildings - from the public domain of national or local interest, according to the case, within 60 days from the Insurance SupervisoryCommission's request date. The Insurance Supervisory Commission may use its own incomes to build, purchase or to rent properpremises, according to the enforce legal stipulations.

(5)The Insurance Supervisory Commission is run by a Council consisting of 7 members, of which a president and two vice-presidents.

(6) The organizational and personnel structure of the Insurance Supervisory Commission, the management, execution andcontrol responsibilities of its staff are established through the organization and functioning Rules, adopted by the Council of theInsurance Supervisory Commission, according to the provisions of the present Law.

(7) The members of the Insurance Supervisory Commission Council are appointed by the Parliament, in a joint session ofthe two Chambers, upon the proposal of the joint commissions, namely the Senate s Finances, Banks and Budget Commissionand the Deputies Chamber Finances, Banks and Budget Commission. The President and the vice-presidents are nominated fortheir functions on the proposal list that is submitted for approval to the Parliament.

(8) Appointing the members of the Insurance Supervisory Commission Council is done upon the joint list proposed by theSenate s Finances, Banks, and Budget Commission and the Deputies Chamber Finances, Banks and Budget Commission.

(9) The revoking of a member of the Insurance Supervisory Commission Council is done upon the proposal of the joint

commissions, namely the Senate s Finances, Banks and Budget Commission and the Deputies Chamber Finances, Banks andBudget Commission, in a joint session of the two Parliament s Chambers , if this ceases to fulfill the necessary requirements forexerting its powers or if it is guilty of serious offences, non-compatible with its attributions.

(91) No member of the Insurance Supervisory Commission Council will be dismissed because of other reasons or through

other procedures except for the ones stated in paragraph (9).

(10) The members of the Commission Council can be appointed for a 5 years period, each of them can be re-appointed.

(11) The initial members of the Commission Council will be appointed for different periods of time, so that each year amandate is to be terminated.

(12) The President will be appointed for a 5 years mandate and the vice-president for a 4 years mandate.

(13) The members whose mandates terminate will remain in duty until their successors are appointed.

(14) In case of total and permanent unavailability to perform the mandate by a certain member, the ParliamentaryCommissions mentioned in par. 8 shall propose the person to be further appointed by the Parliament for the remaining duration ofthe mandate.

(15) The permanent unavailability to perform the mandate is deemed to be any circumstance generating an unavailability of90 consecutive days.

(16) The members of the Insurance Supervisory Commission Council shall fulfill the following conditions:

a) must be Romanian citizens residing in Romania, they must have a good reputation and professional background, and atleast 5 years experience in banking-finance and/ or insurance and reinsurance;

b) during their mandate, they cannot be members of any political party;

c) cannot practice any other profession, or have other function neither in the public, nor in the private sector, exceptprofessorial activities within universities;

d) cannot be members in administration Councils or audit commissions of any body corporate which is subject of thesupervision performed by the Insurance Supervisory Commission, or significant shareholders in such body corporate;

e) have not been declared bankrupt, or part of the management of an insurance or financial-banking company that ceasedits activity irrespective of circumstances without covering its liabilities toward third parties;


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f) must not have criminal record.

(17) The membership function in the Council of the Insurance Supervisory Commission ceases in the following situations:

a)when expiring the period for which he was appointed, according to the provisions of article (13);

b) by resignation;

c) if the Parliament revokes the respective member according to paragraphs (9) and (10)

d) in case of appearance of any incompatibility mentioned at paragraph (17);

e) by replacement, according to paragraph (15).

(18) The members of the Insurance Supervisory Commission Council shall immediately notify the Parliament in writing aboutthe appearance of any incompatibility situation as mentioned by paragraph (17); until the Parliament decision on the matter, themember of the Insurance Supervisory Commission Council is suspended from his rights.

(181) The Members of the Insurance Supervisory Commission Council, as well as its staff, in charge with supervision duties,

cannot be found civilly or criminally liable, according to the case, if the Courts establish the pursuing or the omission of the pursuing,in good faith and without negligence of any act or action related to the exercising of the supervision duties.

(19) The President is the legal representative of the Insurance Supervisory Commission, as a self-governing administrativeauthority, as a legal person of public law and in common law relations.

(20) In the case of temporary impossibility of exerting the president s powers, the Insurance Supervisory Commission shallbe represented by one of the vice presidents, appointed by the president.

(21) If both the president and the vice-presidents are in the impossibility of exerting the powers, the Insurance SupervisoryCommission shall be represented by the older member from the other four members.

(22) The Insurance Supervisory Commission Council shall validly decide in the presence of at least 4 of its members,including the president or, in its absence, of one of the vice-presidents.

(23) The decisions are adopted with the majority of the votes of the present members, and, in case of tie, the vote of thepresident, and in its absence, of the vice-president running the meeting, is decisive.

(24) The approved decision is compulsory for all members of the Council. Those who voted against it and the absentmembers may mention their separate opinion in the minute of the respective session.

(241) The Members of the Insurance Supervisory Commission exercise their mandate according to the law. They have a

solitary obligation for their activity, excepting the case in which they have voted against a decision and they have noted theirseparate opinion in the Minute.

(25) The Insurance Supervisory Commission exchanges information with the competent authorities of Member States, inorder to improve its supervisory activity, taking into account the information shall be subject to the confidentiality terms establishedthrough the Regulations issued for the application of the present Law;

(251) The Insurance Supervisory Commission may conclude Memoranda of Understanding with competent authorities of

Member States, regarding the exchange of the confidential information required for the supervision activity and shall provide that thedisclosure to the public will require the explicit agreement of that authorities or in certain cases only for the proposes that theauthorities were given for their approval.

(252) TheInsurance Supervisory Commission may conclude cooperation agreements with non-member countries authorities

only if the information submitted to the said authorities will benefit the same level of professional secrecy as Insurance SupervisoryCommission is treating that information in Romania under the national legislation.

(253) The Insurance Supervisory Commission shall cooperate with the European Commission by providing it with the

information required for the report provided for in Article 40 of the Council Directive 92/49/EEC.


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(25

4) The Insurance Supervisory Commission permanently cooperates with the European Commission with respect to improving the

insurance activity supervision.

(255) The Insurance Supervisory Commission shall inform the European Commission of any major difficulties to which

application of this law gives rise, and also about any barriers that may arise, hampering the activity of the insurance/reinsurers,insurance/reinsurance brokers, to the detriment of undertakings established in its territory and to the advantage of agencies andbranches located just beyond its borders.

(256) The Insurance Supervisory Commission and the European Commission shall examine such difficulties as quickly as

possible in order to find an appropriate solution.

(26) For carrying-out the competences provided in Article 5, the Insurance Supervisory Commission adopts regulations,notifications and decisions, under the president s signature, after having deliberated in meetings, held according to the provisionsof paragraphs (22)-(24), in compliance with the provisions of paragraph (28);

(27) The Insurance Supervisory Commission adopts norms that are implemented by order of the President. The individualacts are the decisions and the notifications / licenses.

(28) The Insurance Supervisory Commission is in consultation with the College comprising representatives of professionalbodies of the operators on the insurance market.

(29) The Insurance Supervisory Commission comprises specialized personnel in the following fields: economics, law,accounting, actuary, statistics, mathematics, engineering, information technology, medicine as well as specialists in insurance andfinance.

(30) The Council of the Insurance Supervisory Commission provides in a decision the wages of its members and personnel,by taking into account the salary level granted for similar positions on the insurance market.

Article 5

The Insurance Supervisory Commission has the following powers:

a) draws up and/or gives an opinion about the draft Regulations with regards to the insurance field or having implications inthis field, including the specific accounting Regulations for the insurance field, after the consultation with the professionalassociations of the insurance market players and regarding the accounting regulations after informing/notifying, when the case, of

the Ministry of Public Finance, according to the law; also, it compulsory notifies all the individual administrative acts which areconnected with the insurance business;

a1) establishes the objectives, organization and the functioning of the internal public audit activity.

b1) approves, in order to grant the prior notification for the registration as an insurer or reinsurer, the direct and/or indirect

shareholders, on the basis of the provisions of the Regulations issued for the application of the present Law.

b) authorizes the insurance undertakings, the reinsurance undertakings and the insurance and/or reinsurance brokers topursue insurance, reinsurance, insurance and/or reinsurance mediation, when the case, and approves any amendment to thedocuments or to the conditions according to which this authorization was granted; the documents include: the statute and/or theconstitutive act of the undertaking, operation scheme and, only in the case of significant persons, the organizational chart and/or theorganization and functioning rules, as well as other documents established through the regulations regarding authorization, issued inthe application of the present Law. The approval of the amendments, including the case of the persons mentioned at letter d), isrequested in maximum 10 days from the adoption of the decision, by case, by the General Shareholders Ordinary Meeting or the

Extraordinary Meeting regarding the amendments of the documents or the conditions;

c) authorizes the carry on of the compulsory insurance and collects as its own income a percentage contribution from theamount of the gross premium earned due to this insurance, with a view to supervise and to control the compulsory insuranceactivity, under the provisions of this law and the regulations issued in its application;

d) approves and, by case, withdraws the approval, according to the legislation in force and to the Regulations issued in itsapplication, for the significant persons of the insurers, reinsures, insurance and /or reinsurance brokers and approves and, by case,withdraws the approval for the members of the board of directors of the Street s Victims Protection Fund;


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e) approves the split-up or the merger of an insurance/reinsurance undertaking, insurance and/or reinsurance brokerauthorized in Romania, according to the present Law and to the Regulations issued in its application . The approval is granted forinsurance/reinsurance undertakings within 90 days from the complete documentation submission and within 45 days for insuranceand/or reinsurance brokers;

f) approves the transfer of portfolio including for the branches of the Romanian insurer on the territory of other MemberStates to a Romanian insurer or to an accepting office established within the European Union, after the consultations of thecompetent authorities of the Member State of the branch, and also for the agencies and branches set up within Romania by the

undertakings with head offices outside of the European Union, according to the provisions of the present law and of the rules issuedin its application.

g) approves, on the request of the insurance undertakings, reinsurance undertakings and insurance and/or reinsurancebrokers, the limitation, suspension or, by case, the ceasing of the activity, after checking up their financial standing;

h) supervises the financial statement of the insurers/reinsurers/insurance and/or reinsurance brokers, as well as the activityof other insurance intermediaries, natural or legal bodies, according to the provisions of the present Law and of the Regulationsissued in its application, including their branches on other Member States territory, according to the right of establishment, afterconsulting with the competent authorities from the branch Member State;

h1) In order to apply the prudential supervision principles it performs a permanent control of the insurance undertakings,

reinsurance undertakings and insurance and/or reinsurance brokers activity, through the analysis and assessment through thespecific directorates at the Insurance Supervisory Commission head office, of the information enclosed in the reports, notificationsand documents submitted to it according to the provisions of the present law, of the Regulations issued in its application, as well as

according to the notifications and decisions issued by the Insurance Supervisory Commission;

h2) In order to protect the insureds and the potential insureds interests it performs periodical and on-the-spot inspections at

the insurance undertakings, reinsurance undertakings and insurance and/or reinsurance brokers head offices, legal persons, itperforms detailed investigations regarding the conditions in which they pursue business, through collecting information andrequesting documents with regards to their activity, amongst others;

h3) in order to assure a homogeneous professional training of the persons working in the field of insurance, it approves,

according to the provisions of the present Law, of the Regulations issued in its application and through the decisions taken by theInsurance Supervisions Commission Council the lecture themes and the thematic of the graduation exams for the bodies thatorganize such qualification, training and professional improvement courses, undergraduate and postgraduate, including foractuaries, with the exception of the academic institutions certified by the Ministry of Education and Research, as well as theminimum requirements for certifying the lecturers for these courses.

i) ensures a supplementary supervision, according to the methods provided in the regulations issued by the Insurance

Supervisory Commission of the following entities:

1) any insurer which is a participating undertaking in at least one insurer, a reinsurer or an insurer from a non-member-country;

2) any insurer of which the parent undertaking is, by case, an insurance holding company, a reinsurer or an insurer from anon-member-country;

3) any insurer whose parent undertaking is a mixed-activity insurance holding company.

j) requests the submission of information and documents, including the ones with statistical character, regarding theinsurance activity, the management of this activity and its executive management, both from insurance undertakings, reinsuranceundertakings, insurance and/or reinsurance intermediaries, and from any other natural or legal person, who have direct or indirectconnection with their activity, including the information regarding the technical basis used for calculating insurance premiums and

technical reserves;

k) takes the necessary measures to ensure that the insurance activity is managed by respecting the specific prudentregulations;

l) applies the measures established by law in respect of the financial recovery, re-organization or, by case, the winding-up ofthe insurer, the reinsurer as well as their branches and subsidiaries;

l1) fulfils the quality of administrator of the Policy Holders Protection Fund;


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m) applies the sanctioning measures provided by the law including those related to the exerting of a direct or indirectinfluence, non compliant with the prudent management of the insurer, laid down by the regulations issued by the InsuranceSupervisory Commission;

n) receives and answers to all notifications and complaints with regards to the activity of the insurance undertakings,reinsurance undertakings and insurance and/or reinsurance intermediaries;

o) approves its own budget;

p) attends, as member, to the specific organisms and committees in the field of insurance, acting alongside the EuropeanCommission, at the international associations of the insurance supervisors and represents Romania at conferences andinternational meetings;

q) informs the competent authorities of the Member States of the branch or of the provisions of services about any measuresor administrative penalties taken against that insurers, reinsurersor insurance intermediaries, including withdrawal of their officialauthorization;

r) creates and maintains the Insurance, Reinsurersand Intermediaries Register whose shape and content are settled throughregulations issued for the application of the present law.

s) carries on other attribution provided by this law.

Article 6

(1) The Insurance Supervisory Commission is not to disclose any information obtained during the exercise of its legalcompetencies.

(2) The confidentiality restriction in par. 1) does not apply if the disclosure is made:

a) with the written agreement of the insurer concerned;

b) at the explicit request of a Court of law;

c) for insureds' best interest;

d) on the basis of the information exchange, of the Memoranda of Understanding or the cooperation agreements , accordingto the conditions established in article 4, paragraphs (25), (25

1), (25

2).

Article 7

(1) The Insurance Supervisory Commission shall submit to the Parliament, to the Senate s Budget and FinancesCommission and to the Deputies Chamber Budget and Finances Commission respectively, within 6 months from the end of eachfinancial year, a report on the Romanian insurance market, as well as a notification regarding the activities undertaken.

(2) The Insurance Supervisory Commission will issue and publish an annual report on the insurance market and on itsinstitutions and bodies, subject to the provisions of art. 6.

Article 8

(1) The Insurance Supervisory Commission adopts regulations in the application of this law, as well as specific prudentregulations according to the insurance practices.

(2)The Insurance Supervisory Commission issues decisions or, by case, internal rules through which:

a) imposes restrictions, grants, suspends or withdraws authorizations;

b) modifies or revokes conditions, requirements or terms that are enforced by its acts;


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c) approves the insurance/reinsurance undertakings/insurance and/or reinsurance brokers' mergers or split-ups;

d) approves the transfer of the insurance portfolio;

e) registers and approves actuaries;

f) notifies, according to the Regulations issued in the application of the present Law, to the authorised insurers and

reinsurers, including to those whose shares are traded at the stock exchange, the natural or legal persons intending, direct and/orindirect, by case, to become significant shareholders, to increase their participation share, to give up the quality of significantshareholder or to diminish their participation;

g) approves the criteria and the conditions for Insurance Experts Body membership, acting alongside it, as well as its statute;

h) sets the wages of the Insurance Supervisory Commission members and personnel, subject to provisos in art. 4;

h1) updates the level of the authorization fee for insurance undertakings and reinsurance undertakings;

h2

)establishes/ clarifies other problems of interest regarding the insurers, reinsures, insurance and/or reinsurance

intermediaries, the Street s Victims Protection Fund and of the bodies organizing training courses;

i) performs a permanent control, from its head office, through the specific directorates, by analyzing the data and the

information from the periodical and the yearly reports, as well as from the documents by which it is requested the prior approval forthe amendment of the initial authorization conditions, of the insurance and reinsurance undertakings and the insurance and/orreinsurance intermediaries, and decides periodic or on-the-spot inspections at their offices;

j) requires the submission of certain documents, reports, data, hearings;

k) identifies and applies sanctions, following the permanent, periodical or on-the-spot inspections, to the insuranceundertakings, reinsurance undertakings and to the insurance and/or reinsurance intermediaries, to the significant shareholders, aswell as to their significant persons or to the members of the board of directors of the Street s Victims Protection Fund, or to themanagement of the bodies organising training courses for breaching the provisions of the present Law, of the Regulations, decisionsand the notifications issued by the Insurance Supervisory Commission;

k1) all sanctioning decisions will enclose the legal ground of their application and shall be communicated to the natural and

legal bodies against whom the sanction was decided. In the sanctioning decisions it shall be mentioned the right to appeal thesanctioning measures by the persons in question, the date until the appeal can be filed and the court or the authority to which the

appeal has to be addressed to;

l) applies other measures provided by the legislation in force.

(3) The notifications are documents through which the Insurance Supervisory Commission states official answers to mattersregarding the insurance business or which have implications on it.

(4) The Insurance Supervision Commission specifies or clarifies certain problems of common interest for all insuranceundertakings, reinsurance undertakings or insurance and/or reinsurance intermediaries, by issuing internal rules. The internal rulesdo not determine obligations, and sanctions can not be found out or applied based on them.

Article 9

(1) The Regulations issued by the Insurance Supervisory Commission according to its competencies stipulated in this law

shall be published in the Romanian Official Gazette, part I.

(2)The decisions, notifications and internal rules are not subject to publication, excepting the ones provided by article 8,paragraph (2), letters a), c) d) and h

1).

Article 10

(1) The following represents own income to the budget of the Insurance Supervisory Commission:

a) fees and penalties provided for in art.13 and art. 36;


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a1)the amounts from the administrative fines applied according to the law;

b) income from donations, publications and other legal sources;

(2) The surplus in the Insurance Supervisory Commission budget is carried forward to the next year.

(3) The Insurance Supervisory Commission availabilities can be placed in instruments carrying interest at the State Treasury

and at credit institutions, in instruments of the monetary market, in state securities or in public local administration securities, as wellas in other placements or allocations provided by the legislation in force.

CHAPTER III

The authorization of insurers

Article 11

(1) The insurance business in Romania may be carried on only by:

a) Romanian legal persons, established like stock insurers( societati pe actiuni ) and/or mutual associations (societatimutuale), which received an official authorization granted by the Insurance Supervisory Commission according to the procedureprovided by Article 12;

b) the insurance and reinsurance undertakings authorized in the Member States pursuing insurance or reinsurance businesson Romanian territory according to the right of establishment and freedom to provide services;

c) the branches belonging to mother companies governed by laws form a third country, authorized by the InsuranceSupervisory Commission, according to the procedure provided in article 12 and observing the conditions established according tochapter III

2;

d) subsidiaries of insurance or reinsurance undertakings, from third countries, authorized by the Insurance SupervisoryCommission, according to the procedure provided by article 12;

e) insurance undertakings or reinsurance undertakings adopts the European form of the share company (SE SocietasEuropea).

(2) An insurance undertaking can not be registered in the trade register without the prior notification for registration issued bythe Insurance Supervisory Commission.

Article 12

(1) The application for authorization of pursuing insurance activity shall be submitted to the Insurance SupervisoryCommission in the format and accompanied by the documents required by the regulations.

(2) If deemed necessary, the Insurance Supervisory Commission may request additional information, or perform its owninvestigations or with the support of other competent authorities, or it may use information from other sources.

(3)The Insurance Supervisory Commission shall decide upon granting or upon rejecting the authorization of pursuinginsurance activity within a maximum of 4 months from the registration date of the last proper information or document(s) submittedat the request of the Insurance Supervisory Commission.

(4) The Insurance Supervisory Commission may grant the authorization provided in paragraph (3) in case of cumulativecompliance with the following conditions:

a) Drawing up an operation scheme for all risks from a class, or some of the risks included in that class, if the insurerswishes to cover only some of the risks from that class, that shall include at least the following information and documents:

1. the nature of the commitments or the risks which the insurance undertaking wishes to cover;

2. the actuarial calculation methods used for establishing the technical reserves;


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3. the guiding principles of the reinsurance program and the list of reinsurers, according to the Regulations issued in theapplication of the present Law;

4. the items constituting the Guarantee Fund according to the Regulations issued in the application of the present Law;

5. the financial resources for covering the expenses, and for the insurance in class no. 18, letter B, annex no. 1, theinsurer s available resources for assistance.

6. for the first three financial exercises the operation scheme shall also include:

a) the estimation of the executive management expenses and those of the specific management positions from theinsurance field;

b) the estimation of the premiums and the claims;

c) the incomes and expenses budget;

d) the estimation of the financial resources required for the settingup of the technical reserves and the solvency margin;

7. an appropriate IT system for optimum carrying on the insurance business that it proposes to pursue, according to therequests from point 1, according to the Regulations regarding authorization of the insurance undertakings, issued in the application

of the present Law;

b) As regards the pursuing of insurance class no.18 Assistance for persons who get into difficulties while traveling, whileaway from home and while away from their permanent residence the scheme of operation provided for in paragraph a), theinsurer will provided information regarding:

1) the proof of the qualified staff,

2) the proof of an adequate technical equipment,

3) the network which will be used, fulfilling this way the commitments assumed for this class of insurance.

c) the scheme of operations shows that the undertaking will have the required solvency margin;

d) the applicant's social capital paid-up in with a bank authorized by the National Bank of Romania or, in the case of amutual company, its paid-up free reserve fund is in accordance with legal provisions;

e) the company name does not mislead the public;

f) the applicant will exclusively carry on activities related to the insurance;

g) in the case of a foreign insurer, if the applicant proves it is legally established in the registration country;

h) the insurers which request the authorization for class 10, excluding carrier s liability, shall appoint in each Member State,a claims representative;

(41) General and specific conditions of the insurance policies, the premiums value, the premiums calculation bases or the

forms, and other documents an insurer intends to use in his relations with the insureds, are not subject to prior approval orsystematic notification.

(42) Taking into account the prudential supervision principles, the Insurance Supervisory Commission may request

information regarding the technical basis of the premiums and technical reserves calculation, observing the provisions of paragraph(4

1), in order to check their compliance with the actuarial principles.

(43) The competent authorities of other Member States shall be consulted by the Insurance Supervisory Commission before

issuing a functioning authorization for an insurer that finds itself in one of the following situations:


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a) it is a subsidiary of an authorized insurer from another Member State; or

b) it is a subsidiary of an insurance undertaking mother of an insurer authorized in another Member State; or

c) it is controlled by the same natural or legal person, controlling another insurer from

another Member State.

(44) The competent authorities that supervise the credit institutions or the financial services and investment companies from

a Member State shall by consulted by the Insurance Supervisory Commission before issuing a functioning authorization for aninsurance undertaking that finds itself in one of the following situations:

a) it is a subsidiary of a credit institution or of a financial services and investments company authorized in the EuropeanUnion; or

b) it is a subsidiary of an insurance undertaking mother of a credit institution or of a financial services and investmentscompany authorized in the European Union; or

c) it is controlled by the same natural or legal person that controls a credit institution or of a financial services andinvestments company authorized in the European Union.

(45) The competent authorities mentioned in paragraphs (43) and (44) shall be consulted both for the assessment of theshareholders, and of the reputation and the expertise of the significant persons engaged in the management of another body fromthe same group;

(46) The Insurance Supervisory Commission may request the competent authorities in question, any relevant information

about the shareholders of an insurer or about the reputation and the expertise of its significant persons, both for issuing anfunctioning authorization and for permanent assessment of the way the activity of that insurer takes place, according to theprovisions of the legislation in force.

(5) For the insurance undertakings from third countries the followings requests are added:

a)the branches belonging to insurance undertakings, reinsurance undertakings, as well as to mutual companies having theirsocial office in third countries, held on Romanian territory assets of at least half of the value of the guarantee fund provided at thetime of the authorization for the insurers and reinsurers, Romanian legal persons;

b)the branches belonging to the insurance undertakings, reinsurance undertakings, as well as to mutual companies havingtheir social office in third countries, shall set up on Romanian territory, an original deposit of a quarter of the value of the guaranteefund, provided at the time of the authorization, as guarantee to a credit institution authorized by the National Bank of Romania, forthe insurers and reinsurers, Romanian legal persons.

(6) The authorization granted to an insurer by the Insurance Supervisory Commission is valid for the whole territory of theEuropean Union, as well as for the member-states of the European Economic Area, according to the right of establishment andfreedom to provide services.

(7) The authorizations is granted for all risks from a class, excepting the case when the insurance undertaking wishes tocover only some of the risks included in the respective class.

(71) The insurance undertaking requesting authorization for a new insurance class or the extension of some or of all risks

covered by the same insurance class, shall submit for these situations the operation scheme provided in article 12, paragraph (4),

letters a) c) and, by case, the names of the persons provided in letter h), as well as other documents and information, accordingto the provisions of the Regulations issued in the application of the present Law.

(8) The Insurance Supervisory Commission may grant authorization for the classes mentioned at letter C, Annex no.1 of thelaw, if the insurer requires this and fulfill all the conditions provided by law.

(9) The authorization granted for a class or a group of classes is valid to subscribe ancillary risks if the conditions providedby letter D, Annex no.1 of this law are fulfilled.

(10) abolished.


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(11) The insurersauthorized to pursue life assurance may also receive the authorization for pursuing classes 1 and 2 of non-life insurance,provided in the Annex 1 lett B. The insurersauthorized to pursue non-life insurance business, but only for classes 1and 2, provided in paragraph B, Annex no. 1, have the right be granted functioning authorization for life assurance business as well.

(12) The Insurance Supervisory Commission will refuse to grand the authorization in the case of non-compliance with therequirements provided by paragraph (4) and (5), when the case will be, as well as one or more of the following situations are foundout:

a) the submitted documentation does not comply with the legal provisions in force;

b) the submitted application shows that:

1) the undertaking will not carry-out an activity in accordance with the provisions of these law;

2) the significant persons and shareholders do not fulfill the conditions and the criteria provided by the legislation in force;

3) the need to ensure the sound and prudent management of an insurer, are not satisfied as to the qualifications of theshareholders or members, either direct or indirect.

c) the analysis of the scheme of operations, shows that the undertaking cannot ensure the achievement of stated objectivesin conditions which are compatible with prudent practice regulations, which to provide the adequate security to insurers;

d) there is a form of association through which the share ownership, including the actual owner of the stock, is concealed tothe Insurance Supervisory Commission;

e) the available IT system is not appropriate to optimum carrying on of the insurance activity that it proposes to pursue.

f) The persons mentioned in the annex of the Emergency Governmental Ordinance no.159/2001 for the prevention andcombating the use of the financial system for the purpose of financing terrorism and in the list drawn-up according to the provisionsof article 5 from the present Emergency Ordinance can not be direct and/or indirect shareholders, as well as significant persons ofan insurer or reinsurer.

(13) The Insurance Supervisory Commission shall notify the applicant upon the reasons to refuse to grand the authorization.

(14) The applicant may appeal against to the refusal of the Insurance Supervisory Commission to the Bucuresti Court of

Appeals, within 30 days from the notification date of the refusal.

(15) The decision to grand the authorization issued by the President of the Council of Insurance Supervisory Commissionwill provide the date the undertaking will start to operate.

(16)The insurance and reinsurance undertakings authorized according to the provisions of the present Law and to theRegulations issued in its application, shall include in all issued documents, including in the correspondence with third parties, theunique code from the Register mentioned at article 5, letter r), as well as the following writing: Authorized by the InsuranceSupervisory Commission.

(17) a) All the reports, notifications, documents and requests submitted by the insurance or reinsurance undertakings, aswell as any correspondence with the Insurance Supervisory Commission, shall be signed, by case, only by the executivemanagement, by the manager of the life assurance business, and non-life insurance business, in the case of composite insurers orby the persons having managerial positions specific to the filed of insurance.

(18) Any empowerment given to another person, also issued by the significant shareholders, direct or indirect, by themembers of the board and/or of the managing council and/or supervisory council, by case, of the insurer and reinsurer, is rightfullyvoid;

(19) The insurers and reinsurers authorized according to the provisions of the present Law and of the Regulations issued inits application are obliged to post at every main and secondary offices, on visible spot, copies of the registration certificate issued bythe Insurance Supervisory Commission after the registration in the register provided at article 5, letter r).

Article 121


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(1) In order to obtain the functioning authorization as well as anytime during the activity carrying on, an insurer or reinsurerhas to have working relations with at least one actuary, and, in the case the activity requires two or more actuaries, the provisions ofthe present Law and of the Regulations issued in its application, apply also for them.

(2) The actuaries obligations are the followings:

a) determining the technical reserves;

b) control of the assets admitted to cover the technical reserves;

c) calculation of the insurance premiums;

d) calculation of the required solvency margin;

e) the calculation of the available solvency margin of the insurer;

f) calculation of the benefits obtained by fructification of the assets admitted to cover technical reserves for life assurance;

g) drawing up, certifying and submission to the Insurance Supervisory Commission of the yearly actuarial report, the contentand form of which are established through Regulations issued in the application of the present Law;

h) certifying all reports submitted to the Insurance Supervisory Commission which include the calculation provided at lettersa) f);

i) the notification, according to the provisions of paragraphs (3) and (4), of any irregularities found out or of situations thatindicate or lead to the breaching of the provisions of the present Law and of the regulations issued in its application.

(3) The actuary has to inform in written, within two working days, starting with the finding-out date, the Board and/or theManaging Council and/or the Supervisory Council, when the case, as well as the insurer s or reinsurer s executive management,during the fulfillment of the obligations mentioned at paragraph (2), regarding any situation indicating an infringement of theprovisions of the present Law and of the Regulations issued for applying the present Law.

(4) Within 30 days, starting the notification data of the persons mentioned at paragraph (3), the actuary shall inform theInsurance Supervisory Commission about the notification s contents as well as the measures taken by the insurer in order toremedy the situation.

(5) The actuary shall inform the Insurance Supervisory Commission also in case in which within 10 days from the notificationdate mentioned at paragraph (3), the insurer did not take action or did not initiate any measure to remedy the situation.

(6) The persons mentioned at paragraph (3) can not initiate any sanctioning measure regarding an actuary who, carrying outhis obligations is complying with the provisions of paragraph (4).

(7) The actuary can be appointed or revoked only by the Board and/or the Managing Council and/or the Supervisory Council,when the case, of the insurer or reinsurer, and if the actuary is a member in such a Council, by the Extraordinary GeneralShareholders Meeting.

(8) The appointment or, when the case, the revoking of the actuary is communicated the Insurance Supervisory Commissionwithin 3 days starting the date when the decision was taken by the competent body, having included the justification, in case ofrevoking.

(9) The competent body, from the ones mentioned at paragraph (6), has the obligation to appoint a new actuary within 20days starting the previous actuary revoking date.

(10) When the competent body, does not respect the obligation mentioned at paragraph (8), the Insurance SupervisoryCommission appoints, within 10 days starting expiry of the term mentioned at the same paragraph, a new actuary for maximum sixmonths.

(11) Other provisions shall be established through Regulations issued for applying the present Law.

Article 122


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The Actuary Register is opened and maintained by the Insurance Supervisory Commission, in an electronic system and onpaper, the registered information being permanently accessible to the public at the head quarters of the Insurance SupervisoryCommission. The persons registered in the Register shall constitute the Actuary Body, whose status and organizational andfunctioning regulations are approved by the Insurance Supervisory Commission.

(2) Any natural body fulfilling at the same time the following conditions, can be registered in the Actuary Register:

a) has a bachelor degree;

b) has a diploma in actuarial studies, in the country, issued by the academic institutions or other forms of postgraduate, onthe condition that at least one member of the examination Commission holds an actuary qualification or has graduated, with diplomaor examination certificate, the courses of some institutions worldwide recognized for actuary training and qualification;

c) has worked for at least 3 years in insurance field, financial mathematics or statistics, the performed activity needingactuarial knowledge;

d) has no legal or fiscal record.

(3) The Insurance Supervisory Commission shall operate the registration in the Actuary Register of the actuaries at thewritten request of the persons fulfilling the conditions mentioned at paragraph (2).

(4) The actuaries have the obligations to inform within 7 days the Insurance Supervisory Commission any modification of thedata that are subject to registration in the Actuary Register.

(5) Foreigners do not have to comply with the requirement for actuarial studies, if they prove through official documents, thequality of actuary obtained in their origin country.

(6) Sanctioning an actuary thee times by the Insurance Supervisory Commission, for non compliance with the provisions ofthe present Law and the Regulations issued for applying the present Law or conviction through a final sentence leads to themandatory radiation from the Actuary Register.

(7) Other provisions regarding the Actuary Register shall be established through Regulations issued for applying the presentLaw.

Article 13

(1) An insurer who applies for an authorization according to article 12 and 76 shall pay at the submission of the authorizationapplication, an authorization fee amounting to Rol 75,000,000. The amount of the authorization fee may be up-dated yearly by adecision of the Insurance Supervisory Commission, according to the inflation rate notified by the National Statistics Institute;

(2) If the authorization application is denied, the authorization fee is not reimbursed.

(3) From the moment of receiving the authorization, during its validity period, the insurer shall pay a functioning fee setyearly by the Insurance Supervisory Commission, amounting to maximum 0.3 % of gross premiums collected during the period forwhich they are due.

(31) After Romania joining the European Union, the functioning fee mentioned at paragraph (3), could reach up to 0.5 % of

gross premiums collected during the period for which they are due, taking into account the Insurance Supervisory Commission sobligations after becoming European Union Member State.

(4) The insurers pay the functioning fee at the dates established by the Regulations.

(5) When the functioning fee provided by paragraph (3) is not paid in due term, the Insurance Supervisory Commission willcalculate penalties according to the in force legislation regarding the collection of the fiscal debts.

(6) Paying the authorization fee mentioned at paragraph (1), the insurance undertaking receives the authorization only fora certain class, excepting the case when the insurance undertaking wants to cover only some of the risks included in the respectiveclass, as mentioned in Annex no. 1, and for each class or, when the case, only for some of the risks included in a certain class, shallpay the fees mentioned at paragraph (7).


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(7) An insurer requesting authorization according to the provisions of article 12 paragraph (71) pays, upon submitting the

authorization request, an authorization tax representing 40% of the amount of the tax provided at paragraph (1).

(8) An insurer when asking an authorization for a portfolio transfer, including for the situations provided by Art. 45 para.(4),shall pay an authorization for portfolio transfer fee representing 50% from the fee provided by paragraph (1).

(9) An insurer, reinsurer or an insurance and/or reinsurance broker, the Street s Victims Protection Fund or a body that

organises training courses which requests the approval for amending the conditions and documents on the basis of which theauthorisation/notification was granted, as well as any information or certifications from the Insurance Supervisory Commission inorder to serve in its relations with the third parties, shall pay an approval, notification or certification tax, by case representing theequivalent in Romanian lei of 35 Euro, at the National Bank of Romania exchange rate from the day of the payment.

(10) Any natural or legal person, with the exception of the policyholders, injured parties and public institutions that requestfrom the Insurance Supervisory Commission information, certifications or points of view shall pay a tax presenting the equivalent inRomanian lei of 35 Euro, at the exchange rate communicated by the National Bank of Romania at the date of the payment.

(11) For all the authorizations issued by Insurance Supervisory Commission that have been destroyed, lost or stolen,duplicates will be issued upon request of the entitled persons, under the conditions mentioned in the Regulation issued in theapplication of the present Law after paying a fee representing 25% of the amounts mentioned at paragraph (1) and at article 36,paragraph (1).

Article 14

(1) The Insurance Supervisory Commission withdraws the authorization to carry on the insurance business if the authorizedinsurer is in one of the following situations:

a)does not make use of the authorization by conducting an insurance activity within 12 months;b)expressly renounces to the authorization and demands the stopping of his insurance activity;c)ceases to carry on business for more than six months in a row;d)no longer fulfils the conditions based on which it was authorized;e)did not fulfill the measures specified in the recovery plan or the measures where ineffective, by case;f)breaches the dispositions of this law and of the regulations issued in its application.(2) The Insurance Supervisory Commission informs the competent authorities of the other Member States about the

withdrawal of the authorization for an insurer carrying on insurance activity within their territories.

(3) The Insurance Supervisory Commission takes legal steps following the information received from the competentauthorities of the other Member States as regards the withdrawal the authorization of an undertaking that pursues business withinRomania territory, in compliance with the right of establishment and the freedom to provide services.

(4) The decision to withdraw the authorization is precisely reasoned and it is communicated to the insurer. The insurer canapply against the withdrawal decision to the Bucuresti Court of Appeals within 30 days from the communication date.

Article 15

The Insurance Supervisory Commission shall publish at least once a year, in the Romanian Official Gazette, as well as in awidely circulating publication, the updated list of the authorized insurers and any other information that it might find necessary, inapplying this law.

CHAPTER III1

Right of establishment and freedom to provide services of the insurers

Article 151


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The insurer authorized according to art. 12 may conduct an insurance activity in another Member State, by establishing abranch or an agency, only with prior notice to the Insurance Supervisory Commission.

Article 152

The notification provided for in Article 151

shall contain the following information and documents:

(1) the Member State name within the territory of which it proposes to establish a branch;

(2) a scheme of operations setting out, inter alia, the types of business envisaged and the structural organization of thebranch;

(3) the address in the Member State of the branch from which documents may be obtained and to which they may bedelivered, being understood that the address shall be the one to which all communications to the authorized agent are sent;

(4) the name of the branch's authorized agent, who must possess sufficient powers to bind the insurer in relation to thirdparties and to represent it in relations with the authorities and courts of the Member State of the branch and, when the case will be ;

(5) a declaration of the undertaking that intents its branch to cover risk in class 10 letter B, Annex no. 1, to this law, notincluding carriers liability that it has become a Member of the National Bureau and the National Guarantee Fund of the memberstate of the branch.

Article 153

(1) The Insurance Supervisory Commission shall, within three months of receiving all the information referred to in Art. 152,

communicate that information to the competent authorities of the Member State of the branch and shall inform the insurer concernedaccordingly, unless:

a) the financial situation of the insurer does not allow the fulfillment of the assumed obligations.

b) the significant persons provided in point 4, art. 152, have been convicted for breaching the asset law or for breaching the

rules provided by the fiscal and financial legislation.

c) the significant persons provided in point 4, art. 152, don t have the necessary qualification and experience.

d) the organizational structure does not permit the adequate pursuing of the business

(2) Insurance Supervisory Commission shall also attest that the insurer has the minimum solvency margin.

(3) Where the Insurance Supervisory Commission refuses to communicate the information referred to in Art. 152

to the competentauthorities of the Member State of the branch, it shall give the reasons for their refusal to the insurance undertaking concernedwithin three months of receiving all the information in question.

(4) That refusal or failure to act, provided in paragraph 3, shall be subject to a right to apply to the Bucuresti Court ofAppeals within 30 days.

Article 154

The branch may pursue business as follows:

a) starting with the date when the Insurance Supervisory Commission confirms to the undertaking the approval receivedfrom the competent authority from the member state of the branch; or

b)if no communication is received from them, on expiry of the two months period, in compliance with article 153 , paragraph(1), the branch may be established and start business.

Article 155


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In the event of a change in any of the particulars communicated under Article 152

and Article 157

the insurance undertakingshall give written notice of the change to the Insurance Supervisory Commission and to the competent authorities of the MemberState of the branch or to the competent authorities of the provision of services at least 30 days before making the change.

Article 156

Any insurance undertaking which, under the freedom to provide services, intends to carry on insurance activity for the first

time in one or more Member States shall first inform the Insurance Supervisory Commission, indicating the nature of thecommitments or the risks it proposes to cover.

Article 157

(1) Within 30 days from the receiving of the notification, provided by Article 156, the Insurance Supervisory Commission shall

communicate to the competent authorities of the Member State or Member States within the territory of which the insuranceundertaking intents to carry on business :

(a) a certificate attesting that the insurance undertaking has the minimum solvency margin calculated in accordance with thelegislation in force;

(b) the classes of insurance which the insurance undertaking has been authorized to offer;

(c) the nature of the commitments or the risks which the insurance undertaking proposes to cover in the Member State of theprovision of services.

(2) At the same time, they shall inform the insurance undertaking concerned about the notification date provided inparagraph (1).

(3) The insurance undertaking which intends under the freedom to provide services to cover risks in class 10 of point B ofthe Annex to this law other than carrier liability shall:

a) communicate the name and address of the representative for claim settlement;

b) produce a declaration that it has become a member of the national bureau and

national guarantee fund of the Member State of the provision of services.

Article 158

(1) When the Insurance Supervisory Commission does not communicate the information referred to in Article 157

within 30days, it shall give the reasons for its refusal to the insurance undertaking.

(2) The refusal to communicate the notification provided in paragraph (1) by The Insurance Supervisory Commission, shallbe subject to a right to apply to the Bucuresti Court of Appeals in 30 days period from the communication date of the refusal.

Article 159

The insurance undertaking may start business on the certified date on which it is informed of the communication provided forin the Article 15

7paragraph (2)

Article 1510

(1) Any insurance undertaking carrying out insurance business based on the right of establishment and freedom to provideservices which does not respect the inforce legal provisions shall submit to the Insurance Superisory Commission all the legaldocuments required by Insurance Supervisory Commission regarding the activity, which also the insurance undertaking with headquarters in Romania have the obligation to submitt.

(2) The agencies and branches of the insurers and reinsurers authorized by the Insurance Supervisory Com

law regarding the insurance business and insurance supervision

Documents