BOSNIA and HERZEGOVINA: New Draft Law proposed by Government will bring changes for local insurance companies

The Government of Republic of Srpska has established a Draft Law on Amendments to the Law on Insurance Companies. The proposed articles will include changes in insurers' internal organization, higher amounts of founding capital required, as well as changes in administrative procedures.

"The proposed amendments aim to harmonize the powers and standards of supervision with the general principles and the best international practice of supervision of insurance companies, in accordance with EU regulations and recommendations of the FSAP mission, in order to increase the protection of interests of insurers and investors.

These Amendments are designed to further improve corporate governance through the division of the responsibilities of the Director to at least two executive directors and the licensing of all members of the Board of Directors, to introduce an Audit Committee as a mandatory body in the insurance company.

A gradual increase in the amount of the founding capital was proposed, the increase in the protection of the insured through exemption from forced collection of funds for covering the mathematical reserves and precise definition of extraordinary administration procedure," claimed the Government of Republic of Srpska on their website.

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