The draft law on insurance and reinsurance activities, which was approved by the Government in October this year and was developed by specialists of the National Commission for the Financial Market (CNPF) alongside experts from the World Bank, was adopted in the first reading in December during a regular parliamentary meeting, CapitalMarket reports.

The draft law retains the current regulation and supervision rules and establishes new requirements for capital compliance, corporate governance, and risk management. The document includes provisions of the European Insurance Directive, in particular, the requirements of Solvency II. The law will enter into force 12 months after its publication and insurers must meet capital requirements by January 1, 2023.

"Legislative reform through planned approval of a set of normative acts provides an opportunity for a large-scale modernization of the institutional system in the insurance sector, respectively, bringing the sector closer to standards and best practice. We believe that now is a good moment to introduce a new regulatory framework that will not compromise the ability of most market participants to comply with prudential requirements. Moreover, after a period of instability, such a reboot will create a favorable environment for the "new normal" reality by applying new business models that ensure continuity, stability, profitability, fulfillment of a social mission, motivate innovation and the find of new technological solutions, and at the same time will ensure customer protection. The new regulatory framework will be introduced gradually and will not create preconditions for any shock situations to entities whose capital compliance is within predictable limits", said Valeriu CHITAN, CNPF Chairman.