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Insurance Companies And The Supervisory Law

Original Language Title: Apdrošināšanas sabiedrību un to uzraudzības likums

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The Saeima has adopted and the President promulgated the following laws: the insurance company and the supervisory law chapter I General provisions article 1. The law is applied in the following terms that comply with the law "on insurance contract" used terms: 1) the insurance policyholder or insured – possible risk of loss transfer to the insurer;
2 official of the insurer-insurer) Council and Chairman of the Board and members, Managing Director, the law "On joint stock companies", the Chief authorising officer, the head of the internal audit service and the Chief Actuary;
3) insurer-insurance joint stock company or mutual insurance cooperative society;
4) foreign insurers — outside the Republic of Latvia registered insurers;
5) the main life insurance actuary — public officials, which evaluates insurance contracts concluded and the financial stability of the insurer;
6) — insurer's reinsurance of any financial risk of loss transfer to the reinsurer;
7) reinsurers, companies that conduct reinsurance;
8) subordinated capital — money that the insurer will take the time that is not less than seven years, and the loan agreement is intended, that the lender can reclaim the loan before maturity only in the event of liquidation of the insurer and his claim upheld by all other creditors have been met, but before the General requirements;
9) technical provisions-insurance stocks insurers contractual obligations.
2. article. This law establishes the insurance company, mutual insurance cooperative societies, insurance intermediaries, as well as reinsurers ' legal status, regulated their operation and monitoring.
3. article. This law does not apply to State social insurance.
4. article. (1) the insurance is voluntary, except where the law provides otherwise. The size of the insurance premiums in the insurance volunteers down the insurer.
(2) mandatory insurance premiums size can be regulated by law or regulations of the Cabinet.
(3) the insurer who has received a license for compulsory insurance, may refuse to enter into a contract of compulsory insurance.
5. article. (1) the insurance premium must be so great as to comply with the obligations laid down in the contract of insurance and cover the expenses needed for insurance.
(2) If you do not comply with the first paragraph of this article claims, the insurance supervisory authorities have the right to require the insurer to change the premium rates.
6. article. (1) insurance limited liability company formation, operation, reorganisation and liquidation is regulated by this law, the law "On joint stock companies", the law "on securities" and other laws.
(2) mutual insurance cooperative society formation, operation, reorganisation and liquidation is regulated by this law, cooperative societies law and other laws.
7. article. (1) the insurer: 1) insurance insurance supervisory inspections specified in licences issued to insurance forms;
2) provide an intermediary to other insurers and reinsurers;
3) doing business related to insurance.
(2) the insurer may not: 1) perform other types of business, except in the law or regulations of the Cabinet of Ministers proposed;
2) distribute false, misleading advertising concerning its activities;

3) disclose in the course of insurance find out information about the insured and the policyholder, except this law and other laws provided. If the information is disclosed in the cases provided for by law, the insurer is not liable for the consequences of disclosure.

8. article. (1) the insurer may at the same time make life insurance and other types of insurance. This limitation does not apply to the accident and health insurance by the insurer that received a license for life insurance.
(2) the insurer that received a license for life insurance, you can request and receive licenses for accident and health insurance.
Chapter II the insurer licensing article 9. (1) the insurer may start only after registration laws and regulations and in accordance with the procedure prescribed by the insurance supervisory inspection licence issued.
(2) a licence shall be issued for the conduct of insurance for an indefinite period in accordance with this law, other laws and insurance supervision inspection.
10. article. (1) a foreign insurer in Latvia can take insurance only after the establishment of the insurance company and insurance supervision inspection of the licence issued. Foreign investors participation is not limited.
(2) a foreign insurer or its representation in the permanent representation of the register in accordance with the law "on foreign investments in the Republic of Latvia" and within 30 days, notify the insurance supervisory authorities. Permanent representation of foreign insurer must not take insurance, excluding reinsurance.
11. article. Company (company), a mission or permanent representation in that activity in the Republic of Latvia is associated with insurance, 30 days after registration of the Republic of Latvia Enterprise register shall notify the insurance supervisory authorities.
12. article. (1) issued by the insurance supervisory inspection license the following types of insurance: 1) accident insurance;
2) health insurance (insurance against sickness);
3) ground transport (except rail) insurance;
4) rail transport insurance;
5) aircraft insurance;
6) insurance;
7) cargo insurance;
8) property insurance against fire and natural disasters damage (damage to property, with the exception of the first paragraph of article 3, 4, 5, 6 and 7 of this property causes a fire, explosion, nuclear power, land subsidence and other disasters);
9) property insurance against other losses (property damage, with the exception of the first paragraph of article 3, 4, 5, 6 and 7 of this property causes Frost, hail, theft, and other accidents, with the exception of the first paragraph of article 8);
10) land vehicle liability insurance;
11) aircraft liability insurance;
12) liability insurance;
13) General liability insurance;
14) credit insurance;
15) surety insurance;
16) various financial loss insurance;
17) legal expenses insurance;
18 assistance insurance);
19) life insurance.
(2) a licence is issued for each class individually.
(3) the licence issued to the insured for the purpose of protection of the interests may include additional conditions.
13. article. (1) in order to get a license to carry the newly formed insurance, an insurance company shall submit to the insurance supervisory inspection: 1) application for issue of the licence for one or more types of insurance;
2 founding documents and statutes) of transcripts;
3) insurer's registration certificate copy;
4) shareholders. Insurance supervision Inspectorate is entitled to request additional information for shareholders to make sure their reputation in business and financial stability;
5) a bank document confirming the deposit guarantee fund;
6) a receipt showing that the State paid the fee for the licence;
7) details of officers in accordance with this law, 20, 21 and 23;
8) start-up expenditure necessary for calculation and information on sources of funds (institutional Fund) to cover these expenses. From the organisational expenses borne by the Fund in the first three years of operation. Insurance supervision inspection, assessed by insurance company submitted data on planned expenditure and revenue in the first three years of operation, determine the minimum amount of organisational Foundation, which can be changed in the event of any failure to meet the action plan;
9) action plan for the first three years of operation, indicating: (a) a description of the planned insurance), (b) the tariff calculation methodology), c) the methodology for the calculation of technical provisions, reinsurance program, d), (e)) requires the guarantee fund structure. The guarantee fund may not be used to cover start-up costs for insurance policies, f), (g)) data on planned insurance premiums, commissions, administrative costs and the amount of the claims, stating the expected profit or loss, h) data on the projected amount of the technical reserves.
(2) to get the licence for another type of insurance, the insurer shall provide the insurance supervisory authorities: 1) the first subparagraph of this article 1 and referred to in paragraph 6;

2) new type of insurance required for the implementation of expenditure and information about sources of funds to cover it;
3) action plan one year in respect of their insurance, which is required for license, indicating the first paragraph of this article, the information referred to in paragraph 9.
14. article. Insurance supervision inspection application for issue of the licence for the conduct of insurance examined and a decision shall be taken within three months after receipt of all required documents.
15. article. (1) insurance supervisory inspectorate may refuse to issue a license to carry insurance in the following cases: 1) is not economically justified;
2) is not complied with this law, 20, 21 and 23 requirements;
3) shareholders reputation in business and financial stability is in doubt;
4) does not comply with the company's operation of this law and other legislative requirements.
(2) insurance supervision inspection of the decision on the refusal to issue a license must be motivated, and it can appeal to the Court within one month of receipt of the refusal.
16. article. Insurance supervision Inspectorate is entitled to revoke the license issued to carry insurance in the following cases: 1) the company has not launched an insurance for 12 months from the date of receipt of the licence;
2) insurer stopped insurance for a period longer than six months;
3) insurer in breach of this law, in accordance with the Cabinet of Ministers issued rules and insurance supervision inspection instructions, or do not comply with the conditions of the licence;
4) significantly violates another insurer from laws and regulations governing business;
5) the insurer shall waive the license;
6) the insurer shall not take measures designed to improve the financial position of the plan;
7) insurer fails to fulfil his obligation.
Article 17. (1) If an insurance supervision Inspectorate has established conditions that allow you to decide on insurance licences issued for cancellations, it can take a reasoned decision on the suspension of the licence.
(2) the period of suspension of the licence may not be longer than six months.
(3) the insurer shall not enter into new contracts, increasing the amount of insurance and to extend the insurance contracts of insurance in the form of licences issued to carry out the operation is stopped, but continue to perform the insurance contract in force.
18. article. (1) the insurance supervisory authority may cancel the license all or only certain types of insurance. If the licence is cancelled, the relevant insurance underwriters may not conclude new insurance contracts, increasing the amount of insurance and to extend the insurance contracts, and continue to perform the insurance contract in force.
(2) the insurer liquidation, if it is cancelled the license for all the types of insurance, except that the insurer is reorganized and the reorganization of the insurance supervision Inspectorate received permission.
(3) insurance supervisory inspections Without the prior written permission of the insurer shall be prohibited, re-register it for another company (a company) that is not insurance. The insurance supervisory authority authorisation issued if shares of insurance firm has complied with all the obligations laid down in the treaties.
19. article. (1) insurance supervisory authorities, suspend or cancel a license for carrying out of insurance, have the right to provide that the insurer any costs shall be made only after consulting with the insurance supervisory inspection.
(2) the decision on the conduct of the insurance license revocation or suspension of its operation, the insurer may appeal to the Court within a month of receiving it.
(3) insurance supervisory Inspectorate immediately published the newspaper "Gazette" notice of insurance licences issued for cancellation or suspension.
(4) insurance supervisory inspection of insurers to continue to monitor the full insurance obligations or to the insurer declared insolvent.
Chapter III the insurer operating restrictions article 20. (1) the insurance company and mutual cooperative society, the Chairman of the management board the Management Board, Managing Director of the law "on joint stock companies", the principal accounting officer, the Audit Commission Chairman and Member, as well as branch manager may be a person who: 1) have sufficient expertise for financial management;
2) is adequate for the education and professional experience;
3) has a perfect reputation in the business;
4) by judgment of the Court is not deprived of the right of establishment.
(2) Before the first paragraph of this article persons started to perform his duties, the insurer shall inform the insurance supervision inspection.
(3) insurance supervisory Inspectorate proposes that the first paragraph of this article, the abolition of the position of persons (reelection) if they do not meet the first part of this article and article 21 of this law.
21. article. The insurance company and mutual cooperative society, the Chairman of the management board the Management Board, Managing Director of the law "on joint stock companies", the principal accounting officer, Chief Actuary, the Chairman of the Audit Commission and Member, as well as branch manager may not be a person: 1) which has been convicted of a deliberate crime, the abuse of bankruptcy;
2) is convicted of a deliberate crime, although released on parole due to the Statute of limitations, pardon or amnesty;
3) against which the proposed criminal case on intentional crime is terminated due to a statute of limitations or amnesty.
22. article. The insurance company's Chairman of the Council and Council member can be a person who complies with this law, article 20, first paragraph, 1, 3, and 4, and the requirements of article 21.
23. article. The insurer, which made life insurance, employs the main actuarial qualification minimum requirements determined by the insurance supervision inspection.
24. article. Only with the authorisation of the insurance supervisory inspection for: 1) the insurer may increase or reduce its share capital;
2) allow, the Deputy Chairman of the Management Board, Managing Director of the law "On joint stock companies", Chief Accountant, Chief Actuary, to the Chairman of the Audit Commission and the members of the Branch Manager or start to perform his duties;
3) Open Department (branch) or representations;
4) change your legal address;
5) change its name;
6) amendments to the statutes;
7) make the reorganization.
25. article. (1) the insurer all insurance policies and their fixes, samples recorded in insurance supervisory inspection policy. Policy registration is determined by the insurance supervision inspection.
(2) the natural persons be offered samples of the insurance policies an insurer before the insurance commences with the insurance supervisory compliance inspection.
(3) if the insurance supervision inspection finds the model of insurance policies does not conform to the requirements of the law, it is entitled to terminate this policy sales.
26. article. (1) any natural and legal person, if it is directly or indirectly a qualifying holding in an insurance company, that is, 10 per cent or more of the insurer's share capital or voting shares, before receiving the insurance supervisory inspection permit.
(2) if the shareholder wishes to increase his qualifying holding in excess of 10, 20, 33 or 50 per cent of the share capital of the insurer or of the number of voting shares it previously receives insurance supervision inspection permit.
(3) If a shareholder wants to reduce his qualifying holding so that it informs about it the insurance supervisory inspection.
(4) insurance supervision inspection one month from the date of receipt of the application for a significant acquisition or up to the person to get a qualifying holding or to increase it or, if the person does not meet the requirements of this law, it shall refuse it.
(5) insurance supervisory inspection, deciding on a major acquisition or building permit, assesses the applicant's reputation in business and financial situation.
27. article. If the abstraction you had an insurance supervision inspection permit, but the person they are acquired without such permission vote these shares cannot be used and the decisions of the general meeting of shareholders adopted by using the voting rights of the shares, not force.
28. article. (1) the insurer shall immediately inform the insurance supervision inspection of the changes in the share capital and voting shares of equity in the distribution of more than 10, 20, 33, 50 percent and more of the insurer's share capital or voting shares.
(2) the insurer shall be submitted with the annual report of the insurance supervisory authorities of all the list of shareholders who own 10 percent or more of the share capital of the insurer or the number of voting shares.

29. article. (1) the obligation of the insurer, if otherwise provided for in the Act, not to disclose information about the policyholder and the insured.
(2) to reduce the insurer's risk and prevent fraud, the insurer has the right, directly or through the special body also exchange information on the insured and the insurance policy in force.
Chapter IV the insurer's own funds and reserve funds article 30. To ensure the financial stability of the insurer, the insurer operating in action be permanently own funds not for insurance contracts, specific obligations.
31. article. (1) in order to assess the financial condition of the insurer, the insurer of the same amount of resources compared to the solvency margin and guarantee fund.
(2) the available solvency margin of insurance supervision inspection is duly calculated size.
(3) the guarantee fund is the larger of the following two values: 1) one third of the solvency margin calculated;
2) guarantees the minimum size of the Fund.
32. article. (1) life insurance company guarantees the Fund's minimum size is one million lats, but the other insurance stock companies – LVL 500 000.
(2) cooperative, mutual life insurance society, the minimum guarantee fund size is 400 000 lats, but the other mutual insurance cooperatives societies — 200 000 lats.
33. article. (1) the insurer's own funds consist of: 1) insurance on the company's share capital;
2) mutual insurance societies paid cooperative shares;
3) half of the insurance company of the subscribed but not paid-in share capital, if paid at least 25 percent of an insurance company's share capital subscribed;
4) half of the mutual insurance cooperative society members without the modifications made additional contributions to cover losses if provided for in the statutes of the society if the society does not have a license and life insurance, but not more than 50 percent of the calculated solvency margin;
5) reserve capital;
6) the previous year and accounting period retained earnings;
7) subordinated capital but not more than 25 percent of the first paragraph of this article 1, 2, 5, and 6. the means referred to in point totals.
(2) the insurer of the same amount shall be reduced by: 1) the previous year and the current period unappropriated losses;
2) insurer owned the nominal value of the shares;
3) insurer participation in subsidiaries which are finance and credit companies;
4) intangible investment.
34. article. If the insurer's own funds amount to less than the calculated solvency margin, but the majority of the guarantee fund, the insurer shall provide coordination of insurance supervision inspection plan for the same amount of funds to restore to calculated solvency margin.
35. article. If the insurer's own funds amount to less than the guarantee fund, the insurer shall provide coordination of insurance supervision inspection plan for the same amount of funds for immediate restoration to the calculated solvency margin.
36. article. (1) the insurer shall form the reserve capital. Funds can only be used for the balance sheet shows the unexpected losses.
(2) the reserve capital from the profit tax deductions. Reserve capital may also consist of charges for new issuance shares and other income of the insurer.
(3) reserve for capital investment so that it may, at any time and can be seamlessly used.
37. article. Deductions from profit reserves in equity shall be made until the reserve capital reaches at least one third of the paid-in share capital. Insurer's statutes may set a higher reserve ratio of capital paid-in share capital. Deductions start as soon as funds became less than one third of the paid share capital or on the statutory relationship, if it is greater than one-third of the share capital paid.
38. article. Drawing up and approving the annual accounts, provided that at least 10 percent of the profit remaining after the payment of tax deductible reserves in equity until it reaches this law, article 37 of the specified size.
The technical provisions in chapter v, article 39. (1) technical provisions are only intended for insurance and reinsurance treaties obligations.
(2) establish adequate technical reserves, so the insurer can fully meet their obligations under insurance and reinsurance, and to ensure the stability of the financial transaction.
(3) the insurer's profits reduced by technical provisions the amount transferred during the year. While profits increased by that time of the year is deducted from the technical provisions and the amount credited to income for the insurer.
40. article. (1) the insurer may establish such technical reserves: 1) in the provision for unearned premiums;
2) life assurance provision;
3) deferred claims reserve;
4) equalization reserve;
5) unexpected risk reserve;
6) reserve for bonuses and discounts.
(2) the insurer, taking into account the particularities of the insurance types, you can also create other technical provisions, if provided for in the statutes of the society.
(3) protecting the interests of the insured, the insurance supervisory Inspectorate is entitled to require the insurers to establish certain technical provisions.
Chapter VI article 41 of insurer investments. The insurer's investments must be safe, diversified, liquid and profitable ones to ensure the financial stability of the insurer and the guarantee the insurance contracts, obligations.
Article 42. Technical reserves may invest only: 1) securities which are released or guaranteed by Latvia or other State Government, the Bank of Latvia or the municipality;
2) bank deposit slips;
3) real property — no more than 25 percent;
4) securities which are quoted in the Republic of Latvia registered stock exchange and other stock exchange officially listed — of no more than 30 percent;
5) securities, which are not placed on the public market, as well as parts of companies, or pajās — not more than 20 per cent;
6) mortgage loans and mortgage bonds — no more than 25 percent;
7) insurer's account with a credit institution.
43. article. (1) the insurer's investment in one immovable property without the permission of the insurance supervisory inspections must not exceed 10 percent of the insurer's technical reserves.
(2) investments in securities of the issuer, the one referred to in this law, article 42, paragraph 4, shall not exceed 10 percent of the insurer's technical reserves.
(3) one of the issuer's investment securities, which are not placed on the public market, as well as parts of one company or pajās must not exceed 10 percent of the insurer's technical reserves.
(4) if the existing investments in damaging financial stability of the insurer, insurance supervision inspection requires a change of investment structure.
44. article. The insurer without insurance supervision inspection authorization may invest abroad more than 10 percent of the technical reserves.
Article 45. The insurer, not less than 25 percent of the guarantee fund to be placed in high liquidity investments. This investment regulations require insurance supervision inspection.
Article 46. The insurer may not directly or indirectly lend themselves skipped the purchase of shares or the insurer related companies [two or more undertakings (companies), if they meet one of the law "on enterprise income tax" related to these business signs] released for the purchase of the shares, and take on the security of own shares.
47. article. The insurer may not loan or guarantee, as well as other similar obligations, take responsibility, unless the transaction amount exceeds 10 percent of the guarantee fund. These transactions total amount may not exceed 2 5 percent of the guarantee fund.
48. article. The insurer all article 47 of this law referred to the log, which does determine the insurance supervision inspection. The deal is valid only after log in.
Chapter VII the insurer's accounts and activity report in article 49. (1) the insurer shall keep accounts according to the law "on accounting" and Cabinet regulations.
(2) the annual report shall be drawn up according to the insurer the first paragraph of this article and the provisions of the Cabinet of Ministers.
(3) the insurer, which is a parent undertaking draw up consolidated accounts.
(4) an insurer engaged in life insurance, annual report of the actuarial valuation, which adds volume and structure is determined by the insurance supervision inspection.
50. article. (1) an insurer shall establish an internal audit mechanism, which is the insurer's internal monitoring system.
(2) the insurer's internal audit service is to discover the flaws and mistakes of officials, insurers as well as the default task, work rules and authority being exceeded.

51. article. Insurance supervision inspection requires the insurer to monthly and quarterly reports on its financial activity linked to insurance operations, setting this reporting format, content and submission deadline.
52. article. (1) the insurer's annual report sworn auditor checks or other person to whom the insurance supervisory Inspectorate has granted the right to inspect the annual accounts.
(2) the insurer about the sworn auditor or other person shall inform in writing the nomination insurance supervision inspection, which after the applicant's experience and professional knowledge assessment entitled sworn auditor or other person to perform the examination or reject the proposed nomination.
53. article. (1) Sworn auditor or other person shall examine the annual report is entitled to consult the insurer's assets, accounting records, supporting documents and other information.
(2) the insurer's responsibility to provide official sworn auditor or other person to whom the insurance supervisory Inspectorate has granted the right to inspect the annual report, all information requested.
54. article. (1) sworn auditor or other person shall examine the annual report on the results of the inspection report to the insurer in writing. The opinion shall be drawn up according to the law "on sworn auditors". A copy of the opinion sends the insurance supervisory authorities.
(2) insurance supervisory authorities have the right to request sworn auditor or other person shall examine the annual report, information on the check.
55. article. (1) it is the duty of the Insurer to notify the insurance supervisory inspection of all circumstances which may have a significant impact on the future performance of the insurer.
(2) a sworn auditor or person who checks yearly report, make sure the insurer comply with the first paragraph of this article. On examination, the deficiencies they found in writing notify the insurer's Board, but a copy of the message is immediately sent to the insurance supervisory authorities.
Article 56. (1) the annual report before its approval of shareholders (members) the general meeting shall be submitted to the insurance supervision inspection not later than the year following the year to 30 April.
(2) the insurer, which is the parent company, the consolidated annual report shall be submitted to the insurance supervision inspection not later than seven months after the end of the reporting year.
(3) the annual report within 15 days after being approved by the general meeting of shareholders (members) shall submit to the insurance supervisory authorities.
57. article. The insurer's obligation is to ensure that the full report of the year after being approved by the general meeting of shareholders (members) to the opinion given by the sworn auditor or person who verified the annual report should be freely available to the company and to any interested party to receive the full annual report and the text of the opinion, for a fee, not exceeding the costs of reproduction.
58. article. (1) examination of the insurer's annual report, the insurance supervisory Inspectorate assessed: 1) the adequacy of technical provisions;
2) the guarantee fund and the insurer's solvency margin;
3) insurer investment layout and their liquidity;
4) the layout and extent of reinsurance.
(2) in order to ensure that article 39 of this law and the requirements of instructions, if the insurer has not adhered to in accordance with article 40 of the law on insurance supervision inspection issued instructions for the establishment of technical provisions and methods of calculation, insurance supervision inspection, if required, you can give instructions to the insurer for the amount of the technical reserves, distribution of profits and losses.
Article 59. The insurance supervisory authority on the basis of the reports submitted and the analysis of inspections carried out, shall be entitled to require the insurer's financial position improvement plan and determine its deadlines.
Chapter VIII co-insurance and reinsurance, insurance contract, the transfer of article 60. (1) the reinsurance does not change the liability of the insurer to the insured and the policyholder.
(2) the insurer for reinsurance agreement notify the insurance supervisory authorities.
(3) insurance supervisory authorities have the right to require the insurer to establish technical provisions in full, or change the layout of reinsurance.
61. article. The insurer, which deals with the life insurance may only be life reinsurance, accident and health insurance. Other types of insurance may be the only insurer re-insure, dealing with other types of insurance (except life insurance).
62. article. (1) foreign reinsurers (insurers) reinsurance can be performed without making the Republic of Latvia to the insurance company.
(2) foreign reinsurers of its subsidiary or permanent establishment registered in accordance with the law "on foreign investments in the Republic of Latvia", and before the start of operations in Latvia shall notify in writing the insurance supervisory authorities.
Article 63. (1) the insurer, without making reinsurance must not conclude insurance contracts with policyholders, if the insurer's commitment under this agreement exceed 20 percent of the guarantee fund.
(2) where, in accordance with the insurance contracts concluded at the same time be paid insurance consideration for more insurance cases that can cause the same insured risk, the insurer's commitments under these treaties, without making reinsurance must not exceed 20 percent of the guarantee fund.
64. article. (1) the insurance contract can be signed by several insurers. In this case, the rights and obligations of the insurer are distributed under contract (co-insurance).
(2) If there is no agreement, the co-insurance the insurer shall not cause a common responsibility.
(3) At the conclusion of the agreement on co-insurance applies all the same restrictions provided for in the insurance contract.
Article 65. (1) the insurer may all insurance contracts concluded or part of fully transferable to the insurer. The transaction must receive the permission of insurance supervision inspection.
(2) in order to get the insurance supervision inspection authorization, an insurer who takes over the insurer's other contracts, proves that the acquisition contract, it will be able to meet its obligations to policyholders and its available solvency margin will be sufficient.
(3) the insurance contract shall lay down the procedure for the transfer of insurance supervision inspection.
66. article. (1) an insurance contract to another insurer to be transferred together with their corresponding investment of technical provisions.
(2) If an insurance contract being released without adequate technical reserves for investment, the insurer that takes over these contracts shall be submitted to the supervisory authorities of the insurance technical reserves, the recovery plan.
Article 67. To prevent the insolvency of insurers and protect the interests of policyholders, insurance supervision inspection may cause the insurer to all insurance contracts concluded or part of the transferred to the insurer, which has agreed to accept those contracts.
68. article. The insurer for the insurance contract transfer to another insurer to publish the advertisement in the newspaper "between Latvia and its administrative area in which the insurer made the newspaper.
Chapter IX insurer liquidation and insolvency process characteristics of article 69. (1) safeguarding the interests of the insured, the insurance supervisory Inspectorate is entitled to go to court to admit the application of liquidation of the insurer, if it is cancelled the license for all kinds of insurance.
(2) in the case of winding-up, liquidation of the insurer put in liquidation decision makers appointed liquidator (administrator).
(3) in the event of the insolvency of the winding up of the insurer to implement court-appointed administrator. The insurance supervisory authorities have the power to recommend to the Court administrator candidacy.
70. article. (1) the liquidator (administrator) develop a procedure for the settlement of debts, which harmonised with the insurance supervisory inspection.
(2) the liquidator (administrator) not less frequently than once a month, submit to the insurance supervisory inspection report about the progress of the liquidation.
(3) insurance supervisory authorities have the right to request from the liquidator (administrator) the required information.
71. article. On the abuse of the bankruptcy of an insurer is deemed the insurer's bankruptcy, which has the following features: 1) the bankruptcy occurred, the insurer's Executive of intentional act or omission, and it suffered material injury other people legitimate rights and interests;

2) insurer officials have been hidden or destroyed documents that contain information about the insurer, avoided participation in testing or to trouble her, or fictitious obligations, produced intentionally tethered to bankruptcy related things complete and impartial review.
72. article. If the liquidator (administrator) finds that the insurer's officials have acted illegally, in violation of its mandate or not followed the requirements of the Act and the provisions of the statute or the insurer's shareholders (members) General decisions and instructions, or negligently or intentionally acted maliciously, thus causing damage to creditors, the liquidator (administrator) legal proceedings against officials of the insurer for damages caused by creditors.
73. article. (1) if the insurer decided to terminate operations, then before the commencement of the winding-up process to receive the insurance supervision inspection.
(2) after receiving the permission of the insurer, the insurer liquidation name includes the word "liquidation".
(3) the winding-up of insurance supervision Inspectorate continues monitoring of insurers.
74. article. (1) the opening of winding-up proceedings, the insurer shall sākumbilanc. It draws up to the beginning of the day winding up in the same order as the annual report, balance sheet, and it added to the Board and Council reports on the insurer's assets and liabilities and the estimated results of the liquidation.
(2) where the winding up process ends in the calendar year shall be drawn up in the interim review, which has the same ingredients as the annual report. This annual report shall be accompanied by a report showing the progress made in the course of the liquidation and the dissolution of the anticipated further progress and results. Winding up the annual starpbilanc inspection of the sworn auditor or other person to whom the insurance supervision Inspectorate has granted the right to inspect the annual accounts.
(3) the winding-up proceedings is drawn up, the closing balance of the liquidation.
75. article. (1) upon insolvency or winding-up costs, the remaining funds are distributed to the insured and another to satisfy the claims of creditors the following groups: 1) insured individual claims for the cost of claims, not exceeding 2000 lats. If the policyholder is a natural person — — received claims from insured Defense Fund, he loses the right of action in respect of the amount received and the insured Defense Fund claims against the insurer will be treated as this group of claims;
2) employees of the insurer claims relating to pay for the first three months of the date of the end of salary costs in respect of vacation pay and social benefits, one year before the insolvency proceedings for damages for an accident at work or an occupational disease — for all the outstanding period and the payment of remuneration to be made in about three years ahead of the State social insurance budget If the accident at work or the occupational disease occurred for up to 1 January 1997, as well as claims to the State social insurance contributions and personal income tax payments related to the costs referred to in this paragraph, and the State social insurance compulsory contributions which ensure the receipt of unemployment benefits;
3) claims about taxes and duties owed the State budget and municipal budgets;
4) insured individual claims for the cost of claims exceeding 2000 lats;
5) rest of insured claims for insurance claims costs;
6) policyholders ' claims for the insurance contracts concluded;
7) the claims of other creditors (the principal without interest), also the claims of creditors who have obtained the status of creditors after bankruptcy proceedings;
8) claim for interest payments to creditors;
9) the claims of creditors who have their claims after the deadline;
10) claims for repayment of the subordinated capital.
(2) the insurer's shareholders (members) claims in proportion to the contribution of the shareholders (members) of the share capital of the insurer are satisfied by this article claims referred to in the first subparagraph have been met.
76. article. (1) If an insurer in the course of the liquidation of the recovered amount is not sufficient to satisfy all claims, it is to be distributed among the creditors in article 75 of this law the order specified.
(2) each of the following groups claims are satisfied by the previous group of full satisfaction of the claim.
(3) If the debtor does not have enough money to completely satisfy all claims of creditors of one group, those claims are upheld in proportion to the amount due to each creditor within that group.
Chapter x, article 77 of insurance intermediaries. (1) insurers, reinsurers and insurance policy holders may use the services of insurance intermediaries.
(2) insurance intermediaries are insurance agents, insurance companies and brokerage firms. Insurance intermediaries are not insurers.
(3) the provision of insurance services, the insurer must not use the services of persons who have received the necessary permission in this law.
78. article. (1) insurance agents are individuals who represent the interests of the insurer and of their activities shall be determined by agreement of the insurer, under which they are authorised to act in the interests of the insurer. Agent professional activity is related to insurance contracts, the policyholder for the introduction of the contractual rights and obligations.
(2) the insurance agent is entitled to represent only one insurer or group of insurers.
(3) insurance agency is a legal person, which represents the interests of the insurer and the insurer determines the contract concluded. The Agency is entitled to represent only one insurer or group of insurers.
(4) insurance agents and insurance agencies concluded the insurance contract the insurer responsible.
Article 79. (1) an insurance agent prior to start-up insurance intermediary's register of insurance supervision inspection insurance agent register.
(2) insurance agency and agents employed before start-up insurance intermediary's register of insurance supervision inspection insurance agent register.
(3) the Cabinet of Ministers issued the rules on insurance agents and agencies.
80. article. (1) insurance brokerage company is a company, registered in the enterprise register of the Republic of Latvia in accordance with the procedure laid down in the law and provide the insurance intermediary services to policyholders, insurers, reinsurers or other insurance brokerage firms in accordance with the agreements.
(2) insurance brokerage firm workers brokers insurance intermediary services should only be performed on behalf of the brokerage company.
(3) insurance brokers are independent insurance broker, and his professional activity is related to their personal interests in which are going to enter into a contract of insurance or reinsurance. The insurance broker is entitled to carry out preparatory work for insurance and reinsurance contracts, as well as servicing insurance and reinsurance contracts, the conclusion of which he has participated.
(4) insurance brokers without authorisation shall not be entitled to enter into the insurance contract.
(5) insurance brokerage firm must in each class in which it provides services of insurance intermediaries, to offer more services to insurers. Insurance brokers at the request of the parties that it intends to conclude a contract of insurance or reinsurance, provides information about the represented insurance brokerage company in association with the insurer.
81. article. The insurer paid the broker's fees only insurance brokerage firms, which in accordance with the procedure prescribed by law are registered in the enterprise register of the Republic of Latvia and has received insurance supervision inspection license. This limitation does not apply to reinsurance.
Article 82. (1) insurance brokerage company to engage in insurance intermediation can be natural persons prescribed by the Cabinet of Ministers has received insurance supervision inspection certificate issued.
(2) prior to start-up insurance brokerage company cabinet order receives the insurance supervision inspection issued license.
83. article. Insurance brokerage company incorporation share capital must not be less than 30 000 lats.
84. article. (1) insurance brokerage company insures its civil liability cases, if its with your action causes loss of policyholders, insurers or other parties.

(2) insurance brokerage firms insurance against civil liability in respect of the procedures established by the Cabinet of Ministers.
85. article. The insurance brokerage firm of accountancy kept according to the law "on accounting" and other laws and regulations.
86. article. Insurance brokerage company of the annual accounts drawn up according to the law "on the annual accounts of companies" and other laws and regulations.
87. article. Insurance supervision inspection requires insurance broker company to monthly and quarterly reports on its financial activities related to the provision of services of insurance intermediaries, the reporting format, content and submission deadline.
88. article. Insurance broker shall submit the annual report of the public insurance supervisory authorities no later than the year following the year to 30 April.
Article 89. Insurance intermediaries are entitled to provide the services of insurance intermediaries only in Latvia registered insurers. This limitation does not apply to reinsurance.
Article 90. (1) the conditions referred to in this chapter shall not apply to: 1) entities with whom the insurer has contracted for the distribution of insurance policies through its structure, and the distribution of insurance policies is not the main way;
2) distribution of insurance policies, through the press, mail and similar services;
3) insurer's employees, except for insurance agents.
(2) Before the first part of this article 1 and referred to in paragraph 2, the distribution of insurance policies started the insurer its activities into line with the insurance supervisory inspection.
Chapter XI protection of the interests of the insured article 91. (1) in order to protect the interests of the insured in the event of bankruptcy of the insurer, the insured Defense Fund.
(2) supervision of the insured protection fund accumulation, as well as the management and use of funds in accordance with the provisions of the Act provide the insured Defense Fund Administration.
(3) the insured Defense Fund Administration is a financial institution under the supervision of the Ministry, acting in accordance with the regulations approved by the Cabinet of Ministers.
92. article. The claims of the insured Defense Fund is paid in the amount set out in this Act and insured Defense Fund management rules established after the Court approved the decision of the meeting of creditors in bankruptcy proceedings.
93. article. Insured Defense Fund used for payment of insurance indemnity if the policyholder is a natural person, the following extent: 1) 100 percent of claims, but not more than 2000 Lats per policyholder, life insurance;
2) 50 percent of the amount of insurance, but not more than 2000 Lats per policyholder, this law article 12 1-3, 8-10, 13 and 18 in those classes.
94. article. From the insured Defense Fund claims is not paid: 1) if the insurer is a mutual cooperative society;
2) on compulsory insurance.
Article 95. (1) the insured Defense Fund forms the insurance deductions about one percent of their gross total insurance premiums received from natural persons of this law article 12 1-3, 8-10, 13, 18 and 19 point specified types of insurance.
(2) these payments including the insurer's expenses, and it determines the order of the Cabinet of Ministers.
Article 96. (1) Individual are accumulated and spent part of the Fund formed by the life insurance company, and part of the Foundation, comprising general insurance company.
(2) compulsory insurance lines, as determined by the law or other regulations, you can create separate funds.
Article 97. Insured protection fund may invest in debt securities of Latvia only.
98. article. (1) the insurance compensation is paid only to persons whose claims against the insurer within the time limit set by the law submitted to the insurer, administrator and that administrator has accepted the claim.
(2) the claims of the insured Defense Fund is paid out on the basis of a list drawn up by the administrator and subject to article 75 of this law.
Chapter XII inspection of insurance supervision article 99. Insurance transactions carried out by national surveillance surveillance inspection. It is an independent government body that operates under the supervision of the Ministry of Finance and in accordance with this Act and the by-laws approved by the Cabinet of Ministers.
100. article. Insurance supervision inspection is a legal person, and it is separate property, independent balance, a seal with the supplement of the national coat-of-arms on the small picture and the full name of the inspections, as well as other attributes and the current account in the Treasury.
101. article. Insurance supervision inspection activity is financed from insurance company premiums received total deductions amount set by the Cabinet of Ministers and in order. These deductions including the insurer's expenses.
Article 102. (1) insurance supervisory Inspectorate is headed by a Chief, whose nomination by the Minister of finance approves the recommendation of the Cabinet of Ministers. Contract of employment with the insurance supervisory inspections Chief Financial Minister concluded.
(2) insurance supervisory inspections Chief switch contracts with employees.
Article 103. Insurance supervision Inspectorate is empowered to issue binding instructions to the insurers in this law and in other laws or regulations of the Cabinet of Ministers in the cases provided for.
Article 104. (1) insurance supervisory authorities have the right to request from the insurers and insurance intermediaries in the information and documents on their activities.
(2) insurers and insurance intermediaries shall submit the information requested for insurance supervision inspection deadlines and must not submit to refuse, citing commercial confidentiality.
Article 105. Insurance supervision inspection agent is entitled to check the activities of insurance undertakings and documents and to participate, without vote, the governing body of the insurer.
Article 106. Insurance supervision Inspectorate has the right to propose to call the insurance company's Executive Board, Governing Council or general meeting of shareholders (members) (mutual insurance Association general meeting) and to determine the results.
Article 107. (1) inspection of insurance supervision, securities market Commission and the Latvian Bank by mutual agreement shall exchange the information required to carry out supervision and considered further undisclosed.
(2) provide the insurance supervisory Inspectorate Central Statistics Administration information prescribed in the laws and procedures.
(3) insurance supervisory authority to carry out their functions shall cooperate with foreign financial supervisory bodies. By mutual agreement, they are entitled to exchange the information necessary for the supervision of insurance.
(4) If the insurance supervisory inspection is disclose the information in the cases stipulated by law, it is not responsible for such activities would result in losses.
Article 108. (1) insurance supervisory Inspectorate has the right to carry out a thematic inspection of the insurer.
(2) insurance supervisory authorities have a duty to not less than once every three years to carry out the activities of the insurer a complete audit. The insurance supervisory authorities have the right to authorize to carry out this task to the certified auditor or other person.
109. article. (1) If the conditions of this law, 7, 24, 28, 56, 57, 63, 77, 80 and article 104, the insurance supervision Inspectorate is entitled to impose on the insurer or insurance broker company to fines of up to 10 000 lats.
(2) The first paragraph of this article abuses charged fines insurance supervision inspection including the State budget.
110. article. Insurance supervision inspection employee is not allowed: 1) engage or run by private insurers, pension funds, banks, stock exchanges, investment firms and other companies ' management and audit bodies, except when he's with the national bodies of law is authorized to represent these institutions State property or defend the economic interests of the country;
2) to perform any duties and to provide paid services to enterprises (companies), which is monitoring the insurance supervisory inspection;
3) engage or work in enterprises (companies), as well as transactions because of his personal interests could face insurance supervision inspection of the work or conduct of which he could influence through the post;
4) take the reward side jobs without insurance supervisory inspections Chief's consent. After the Chief of the insurance supervisory inspection request, the employee is obliged to provide, in writing, details of the type of work and the next volume.

111. article. (1) insurance supervisory inspection employee when he has a working relationship with the insurance supervisory inspection as well as after the termination of that relationship is the obligation to keep and not to disclose information which has become available to him when working in insurance supervisory inspection. This limitation does not apply to statutory exceptions.
(2) if the information is disclosed in the cases provided for by law, the insurance supervisory inspection staff is not responsible for the consequences.
112. article. Insurance supervision inspection employee may express the official views of the inspection of mass media only with the insurance supervisory authority of the head of the inspection.
Transitional provisions 1. With the entry into force of this law shall lapse: 1) the law "on insurance" (Republic of Latvia Supreme Council and Government Informant, 1993, 3./4.nr.; The Saeima of the Republic of Latvia and the Cabinet of Ministers rapporteur, 1994, no. 4; 20. in 1995, no; 1996, no. 20; in 1998, no. 2);
2) of the Act "on State insurance supervision inspection" (Latvian Saeima and the Cabinet of Ministers rapporteur, 1995, nr. 20; 1996; 1997, no. 20, no. 15);
3) Republic of Latvia Supreme Council on 12 January 1993 the decision "Of the Republic of Latvia Law" on insurance "date of order" (the Republic of Latvia Supreme Council and Government Informant, 1993, no 3).
2. the Cabinet of Ministers until 1998 December 31 in accordance with this law, 79, 82, 84, 91 and article 95 shall be issued the appropriate provisions.
3. The insured Defense Fund as a legal person is established by 1 January 2001. Until then all of the deposited Fund insurance supervision inspection of the special account.
4. by 1 January 2001 the funds insured protection fund and interest on investments is accumulated without any costs.
5. The insured Defense Fund paid for claims court ruling adopted after 1 January 2001.
6. insurance brokerage company in its operations in accordance with the requirements of this law translates to 1 July 1999.
7. Mutual Insurance cooperative society for their actions according to article 32 of this law the second part translates to 1 January 2002.
8. Article 109 of the law provided for in the rules are applicable until the entry into force of the administrative act.
The law shall enter into force on 1 September 1998.
The Parliament adopted the law of 10 June 1998.
The President g. Ulmanis in Riga in 1998 as at 30 June