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Law No. 47 Of 15 July 1991 Concerning The Establishment, Organization And Operation Of Insurance Companies

Original Language Title:  LEGE nr. 47 din 16 iulie 1991 privind constituirea, organizarea şi funcţionarea societăţilor comerciale din domeniul asigurărilor

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LEGE No. 47 of 16 July 1991 on the establishment, organisation and operation of insurance companies
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR NO 151 of 19 July 1991



The Romanian Parliament adopts this law + Chapter 1 General provisions + Article 1 In Romania, insurance activity is carried out through insurance companies, insurance-reinsurance companies and reinsurance companies, which assume obligations by accepting risks in exchange for the payment of premiums by the insured or, after Case, reinsured. The insurance activity is also carried out through intermediation companies, hereinafter referred to as intermediation agents, which negotiate and conclude insurance and reinsurance contracts for the companies referred to in par. 1 or providing other services regarding the conclusion and execution of such contracts. + Article 2 The formation of companies in the field of insurance with foreign participation is made only by association with legal entities and Romanian individuals. + Article 3 Commercial companies in the field of insurance, provided in art. 1 1 and art. 2 2, shall be constituted in the form of limited liability companies or companies. Companies referred to in par. 1 is constituted and operates in compliance with the Law on Companies and, as the case may be, the Foreign Investment Regime Act, as well as the provisions of this Law. + Article 4 Foreign companies and associations of foreign insurers may set up representations, under the law and in compliance with the following requirements: a) to have legal personality, in the country of origin, to have carried out insurance activity in the last 10 years and not to be in a state of cessation of payments or bankruptcy, or in other such situations; b) to submit, at a bank unit in Romania, a cash guarantee equivalent to the minimum capital limit provided to be paid to the establishment of companies, according to the provisions of art. 8 8; c) to obtain, in advance, the opinion of the Office for the supervision of insurance and reinsurance activity in the Ministry of Economy and Finance. Representatives established in Romania, according to par. 1, may conclude only: a) insurance contracts and reinsurance contracts with legal entities or foreign individuals, or for their property; b) reinsurance contracts with insurance companies, insurance-reinsurance companies and Romanian reinsurance companies. + Chapter 2 Formation, organization and operation + Article 5 The insurance companies are established with the prior opinion of the Office for the supervision of insurance and reinsurance activity in the Ministry of Economy and Finance. + Article 6 In order to obtain the opinion, the requests shall be accompanied, as the case may be, by the following documents: the substantiation memo containing a presentation of the object of activity and its financial bases, the draft company contract and the statute, the declaration on the subscribed capital and the paid-up and its structure. Against the unfavorable opinion, which will be motivated, applicants can appeal to the Minister of Economy and Finance, within 15 days of receipt. His reasoned decision can be appealed to the Bucharest City Court, within 30 days of receipt. + Article 7 Insurance companies can practice one or more categories of insurance and reinsurance, according to the object of activity established by the company and status contract. In the meaning of paragraph 1, the following categories of insurance may be practiced mainly: a) life insurance; b) insurance of persons other than life; c) motor vehicle insurance; d) maritime and transport insurance; e) aviation insurance; f) fire insurance and other damage to property; g) civil liability insurance; h) credit insurance and guarantees; i) insurance of financial losses from insured risks; j) agricultural insurance. + Article 8 The minimum limit of the share capital subscribed to the establishment of a company shall be: a) 25,000,000 lei, in the case of insurance companies, insurance-reinsurance companies and reinsurance companies, separately for each of the insurance categories provided in art. 7 7, which they practice; b) 1.500.000 lei, in the case of intermediation agencies. The paid-up share capital may not be less than 50% of the subscribed capital. + Article 9 Insurance companies perform insurance and reinsurance operations, as a rule in lei, and if they assume payment obligations in foreign currency, these operations are carried out in foreign currency. Payment for insurance operations of persons and goods for Romanian citizens travelling abroad is made in lei. + Article 10 Insurance companies and insurance-reinsurance companies that practice and life insurance are obliged to keep separate accounts for this insurance category, to manage separately the related funds and to make payments from such funds only for life insurance, setting the final results separately from the other kinds of insurance. + Article 11 Insurance undertakings, insurance-reinsurance undertakings and reinsurance undertakings may, on an annual basis, assume obligations from insurance and reinsurance contracts corresponding to a volume of premiums which, after deduction of premiums given in reinsurance, not exceed a ceiling equivalent to up to five times the amount of the paid-up share capital and capital reserves. + Article 12 For the purpose of splitting the obligations they take through risk acceptance, insurance-reinsurance undertakings and reinsurance companies may carry out reinsurance operations in other companies, in reciprocity or unilaterally, of parts of the obligations undertaken by contracts concluded with insured and reinsured persons. + Article 13 Insurance undertakings, insurance-reinsurance undertakings and reinsurance undertakings may conclude arrangements relating to co-insurance and other forms of specific cooperation with a view to ensuring or reinsurance of particular risks which do not can be taken over by a single society. + Article 14 Intermediary agencies may not conclude insurance contracts, for foreign insurance companies, with legal entities or Romanian individuals or for their property. + Article 15 Insurance companies may associate in national unions and join international bodies of a professional nature. + Chapter 3 Technical reserves, tariffs, placements + Article 16 Insurance companies, insurance-reinsurance companies and reinsurance companies are required to constitute, according to their business object, life insurance premiums as well as premium and damage reserves for insurance companies. the other kinds of insurance and reinsurance. The life insurance premiums reserve shall be determined on the basis of actuarial calculations and shall be administered separately. The premium reserves for the other types of insurance and reinsurance shall be made up of the corresponding parts corresponding to the non-expired risks in the year in which the premiums were collected. The damage reserves shall be based on estimates, statistical data or actuarial calculations of payments to be made in the future. They may not be less than 40% of the difference between the premiums received and the damages paid to insurance and reinsurance with validity during the year. Damage reserves, even if they are identifiable, cannot be tracked by insured or creditors. Insurance companies, insurance-reinsurance companies and reinsurance companies that carry out operations and in foreign currency constitute reserves in lei and in foreign currency. The amounts affected by the life insurance premium reserve, as well as the reserves of premiums and damages for the other kinds of insurance and reinsurance, shall be deducted from the income in order to determine the profit. + Article 17 Insurance companies and insurance-reinsurance companies establish the conditions for optional insurance, in compliance with the provisions of the law on the insurance contract, as well as the premium rates for these insurance. In reinsurance operations, the conditions and premiums shall be determined by the reinsurance contract. + Article 18 Intermediation agencies determine the fees or fees they collect for service benefits, according to the tariffs agreed through the contracts they conclude with insurance companies, insurance-reinsurance companies and insurance companies. reinsurance companies. + Article 19 For the conclusion and execution of insurance contracts, insurance companies and insurance-reinsurance companies may use insurance agents. Their remuneration shall be made with commissions from receipts or fees established according to the tariffs agreed by the contracts. + Article 20 Insurance companies can capitalize on their own funds and those temporarily attracted by the activity carried out, in the form of interest-related income for availabilities kept in banks or savings banks. Insurance companies may invest part of the capital, capital reserves and technical reserves in securities, securities or real estate, or may use them to provide loans to institutions with a profile banking, in compliance with a liquidity coefficient, established according to the statute. Companies in the field of insurance with foreign participation and those that carry out insurance and reinsurance operations in foreign currency may realize the investments provided in par. 2, in lei and in foreign currency. + Chapter 4 Balance sheet + Article 21 The financial year begins on 1 January and ends on 31 December, with the exception of the first year of activity, when it starts on the date of establishment of the company. + Article 22 Insurance companies are required to submit, annually, to the Office for the supervision of insurance and reinsurance activity, until April 15 of the following year, the balance sheet and the profit and loss account, approved by the general meeting of shareholders or associates and accompanied by the report of the censors, as appropriate. The representatives of foreign companies have the obligation to submit to the Office for the supervision of the insurance and reinsurance activity, within the period provided in par. 1, the annual financial statements, which they transmit to the companies of the countries of origin. + Chapter 5 Supervision of insurance activity + Article 23 In order to supervise the application of legal provisions on insurance activity, to prevent the insolvency of insurance companies and to defend the rights of insured persons, the Office of supervision of insurance and reinsurance activity within the Ministry of Economy and Finance. The duties of the Office for the supervision of insurance and reinsurance activity will be determined by Government decision. + Article 24 Insurance companies and insurance-reinsurance companies that practice motor vehicle insurance will constitute the Motor Vehicle Insurance Bureau, which represents these companies in domestic and foreign relations, performs the tasks and supervises the achievement, by the represented companies, of the obligations resulting from international conventions on insurance of civil liability for damages caused by motor vehicle accidents. + Chapter 6 Sanctions + Article 25 Violation by companies in the field of insurance of the provisions of art. 10 10, art. 11 11, art. 14 14, art. 16 16 para. 1 1-4 and art. 22 22 para. 1 constitutes contravention and is sanctioned with a fine of 10,000 lei to 150,000 lei. + Article 26 Violation by the representatives of foreign companies and foreign insurance associations of the provisions of art. 4 4 para. 2 lit. a) and b) and art. 22 22 para. 2 constitutes contravention and is sanctioned with a fine of 10,000 to 150,000 lei. + Article 27 Actuaries and other specialists who, in carrying out their duties regarding the examination of balance sheets, values, placements or any patrimonial elements of insurance companies, draw up unreal reports. sanctions contraventionally with a fine of 5,000 lei to 75,000 lei, if the facts enjoyed do not meet the constituent elements of a crime. + Article 28 The penalties provided for in art. 25 25-27 shall apply to the finding agent empowered by the Office for the supervision of the insurance and reinsurance business. + Chapter 7 Special, final and transitional provisions + Article 29 They are exempt from taxes, stamp duties and any other taxes: a) compensation, insured amounts and any other rights granted from insurance of any kind; b) transfers of value of placements and transfers of portfolios between insurance companies, insurance-reinsurance companies and reinsurance companies, of the patrimony of the transferee company in the patrimony of the divestment. + Article 30 The provisions of this law are supplemented by the provisions of civil, commercial and contravention legislation + Article 31 The provisions of this law do not apply to mutual insurance cooperatives, mutual associations and mutual aid societies or burial. + Article 32 Commercial companies in the field of insurance, established until the date of entry into force of this law, will be able to continue their activity if within 6 months they will reorganize in compliance with the provisions of this law. + Article 33 This law shall enter into force within 30 days of publication in the Official Gazette of Romania. On the same date is repealed Decree no. 470/1971 on the organization and functioning of the State Insurance Administration, as well as any other contrary provisions. This law was passed by the Senate at its meeting on June 25, 1991. SENATE PRESIDENT academician ALEXANDRU BIRLADEANU This law was adopted by the Assembly of Deputies at its meeting on 1 July 1991. PRESIDENT OF THE ASSEMBLY MARTIAN DAN Pursuant to art. 82 lit. m) of Decree-Law no. 92/1990 for the election of the parliament and the President of Romania, we promulgate the Law on the construction, organization and functioning of insurance companies and we have its publication in the Official Gazette of Romania. ROMANIAN PRESIDENT ION ILIESCU --------------------------