Romanian Unit-linked Life Insurance Market

摘要

This study presents the legislation that regulates the Romanian unit-linked life insurance market. The main document that regulates both the insurance business on Romanian market and the organizing and operating of the Insurance Supervisory Commission (CSA) is Law no.32/2000 on insurance undertakings and insurance supervision, as amended and supplemented, which provides: organizing and operating of insurance, insurance/reinsurance and reinsurance undertakings, of mutual undertakings, as well as of insurance intermediaries; organizing and operating of the CSA; supervision of the insurance and reinsurance undertakings conducting business in or from Romania; supervision of the insurance and reinsurance intermediaries, as well as the supervision of other activities related to the insurance mediation. The legislation which regulates the Romanian insurance market includes: norms issued by CSA; laws and governmental ordinances that regulate the Romanian financial market; CSA draft regulations which are to be submitted to consulting with the players on the market; EU Directives in the insurance field; repealed or no longer in force legislative acts and international sanctions. According to Directive 2002/83/EC, unit-linked life insurance products were defined as insurance contracts where the benefits provided are directly linked to the value of units in undertakings for collective investment in transferable securities (UCITS) or to the value of assets contained in an internal fund owned by the insurance undertaking, usually divided into units, or a share index or some other reference value. The financial supervision shall include verification, with respect to the insurance undertaking's entire business, of its state of solvency, the establishment of technical provisions, including mathematical provisions, and of the assets covering them, in accordance with the rules laid down or practices followed in the home Member State pursuant to the provisions adopted at Community level. Each Member State shall require of every insurance undertaking whose head office is situated in its territory an adequate available solvency margin in respect of its entire business. In general the European Union requirements and the national requirements are common for all life insurance products offered by an insurance company and also there is not a very clear distinction between the legislation regarding unit-linked life insurance products and the one regarding traditional life insurance products. Policyholders want to enjoy the benefits of equity investment in conjunction with mortality protection, and insurers have developed unit-linked contracts to meet this challenge. Unit linked insurance products are life insurance policies with investment component. Although some unit-linked contract types pass most of the asset risk to the policyholder and involve little or no investment risk for the insurer, it was natural for insurers to incorporate payment guarantees in these new contracts.