As from 1 January 2012, the Insurance Supervisory Commission (ISC) of Lithuania was liquidate, its functions being transferred to a new operational unit of the Bank of Lithuania (LB), the Supervision Service. The new LB structure will supervise commercial banks and other credit and payment institutions, securities and insurance markets, and will investigate disputes of consumers and financial institutions.

Up to now, these functions were performed by the Securities Commission and the Insurance Supervision Commission, as well as the Credit Institutions Supervision Department of the Bank of Lithuania, which are currently liquidated. The State Consumer Rights Protection Service and the Insurance Supervision Commission were responsible for the investigation of the disputes between consumers and financial institutions.

"The decision of legislators to concentrate financial institutions supervision under one institution - the Bank of Lithuania - was taken to make this function, which is especially important for the state, more efficient and less costly to the budget.  The experts of the Supervision Service, organised into specialised divisions, will analyse the risks of financial institutions more widely, which will increase effectiveness of supervision and stability of the financial system", told Mr. Vitas VASILIAUSKAS, Chairman of the Board of the Bank of Lithuania.

According to him, while stepping into a new area for the Bank of Lithuania - supervision of financial services provided to consumers, special attention will be paid to unbiased and urgent investigation of disputes and proper provision of information to consumers.

Mr. Vytautas VALVONIS, 33-year old economist and doctor of social sciences, who currently worked as a consultant to the Chairman of the Board of the Bank of Lithuania, was appointed as the Director of the Supervision Service.

The Service consists of two departments: the Prudential Supervision Department and the Financial Services and Markets Supervision Department.

The Prudential Supervision Department contains ten divisions. Three of them conduct financial institutions supervision (Bank Supervision, Insurance Supervision, Other Financial Institutions Supervision divisions), five of them analyse various risks (Credit Risk, Market and Liquidity Risk, Operational Risk, Risk Modelling, Governance and Internal Control divisions), licences will be issued by the Licensing Division, whereas the Supervision Policy Division will take care of the improvement of financial institutions regulation standards. Mrs. Aldona JOCIENE, 42-year old economist and doctor of social sciences, former Head of the Bank Inspection Division of the Credit Institutions Supervision Department of the Bank of Lithuania, was appointed as the Director of the Prudential Supervision Department.

The Financial Services and Markets Supervision Department consists of five divisions: Financial Services and Markets Policy, Financial Services and Markets Analysis, Financial Services Supervision, Regulated Market Supervision, Consumer Protection and Education. Mr. Vilius SAPOKA, 33-year old economist and former Chairman of the Securities Commission, was appointed as the Director of the Financial Services and Markets Supervision Department.

The Supervision Service will employ 115 employees from the Credit Institutions Supervision Department of the Bank of Lithuania, the Securities Commission and the Insurance Supervision Commission, which is one-third less than the number of employees in the three liquidated supervision institutions. According to preliminary estimates, after the introduction of the new financial market supervision model, the state budget will save around LTL 5 million per year.