PwC Moldova: Tax and Legal Alert no.4

PwC Moldova: Tax and Legal Alert no.4

• 21.04.2016

 Amendments to Insurance to Insurance to Insurance Law

In brief

The Moldovan Parliament has amended the Law on insurance to include new rules on the requirements for holding the founder and shareholder positions in an insurance (reinsurance) company, the grounds for withdrawal of licences, requirements on qualifying holding in the statutory capital, financial recovery.

In detail

General provisions

The Law* substantially modifies the definitions of the concepts of significant shareholder, person in a senior position, qualifying holding and introduces the concept of beneficial owner. The Law requires the appointment of the members of a company’s board and executive body, with the prior approval of the National Commission for Financial Markets (“NCFM”). It is now prohibited to transfer the responsibilities of the members of a company’s board and executive body to other parties. A party registered in jurisdictions, which do not implement international standards of transparency and / or in high-risk countries or jurisdictions is not entitled to own, directly or indirectly, individually or jointly with other parties with which it acts in a concerted manner, shares in the statutory capital of the insurance (reinsurance) company. NCFM will establish in an item of secondary legislation the list of jurisdictions, which do not implement international standards of transparency and / or high-risk countries or jurisdictions. The minimum capital for an insurance (reinsurance) company, which sells mandatory third party motor insurance policies, has been increased from MDL 15 million to MDL 25.5 million.

New grounds have been introduced for the license withdrawal of insurance (reinsurance) companies:

- the insurance (reinsurance) company owes membership payments and fees to the National Motor Insurers’ Bureau;
- the insurance (reinsurance) company has outstanding debts in accordance with the Law on mandatory third party motor insurance liability.

Qualifying holding

New requirements have been introduced for parties which own or intend to obtain qualifying holdings in the statutory capital of insurance (reinsurance) companies, and the principles for assessing the potential significant shareholder.
No party is allowed, without the prior approval of the NCFM, to acquire, increase or decrease , individually or jointly with other parties with which it acts in a concerted manner, under any circumstances, a qualifying holding in the statutory capital of insurance (reinsurance) companies.

For acquisition or increase of qualifying holdings in breach of NCFM approval requirements, the Law stipulates the following consequences:

- suspension of the voting rights, of the right to convene the general meeting of shareholders, to introduce topics on the agenda of the general meeting of shareholders, of the right to receive dividends etc.;
- obligation to dispose of the qualifying holdings within three months as of the date of purchase.

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PricewaterhouseCoopers (PwC) Moldova

PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, tax and advisory services. This network structure provides PwC member firms with the flexibility to operate simultaneously as local businesses, but also on a global scale, creating a platform through which member firms share knowledge, skills and resources and delivery services of consistently high quality to international and local clients. PwC started operations in Moldova in 1996. It has continuously expanded the scope of its services and currently offers a full range of professional services to both international and Moldovan enterprises. Overseen by 16 partners and employing over 600 specialists and support staff, PwC operates in Romania and Moldova from a network of four offices in Bucharest, Timisoara, Cluj-Napoca, Constanta and Chisinau.