Insurance Markets Development and Diversification in the Republic of Moldova in the context of Free Trade Agreement Negotiations between the Republic of Moldova and the European Union

Implementation period: September 2010 – November 2010

Partner: The Society for European Development and Legal Expertise (SEDLEX)

Sponsor: Soros Foundation Moldova

Goal: Our project proposal aims at laying down the methodology to identify a specific set of regulatory and institutional actions to be taken towards this goal in the context of European Integration, in general, and the Free Trade Agreement negotiations with EU, in particular. 

Objective

The overall objective of the project is to evaluate the impact which the conclusion of the Free Trade Agreement between the European Union and the Republic of Moldova will have on the insurance sector in the Republic of Moldova.    

Results

• The assessment of the entire regulatory framework of the insurance sector and the identification of systemic deficiencies that hinder the development of this sector;
• Analysis of the process and tools of supervision of the relevant authority in the sector;
• Evaluation on the whole of the sector sustainability by diagnosing the basic indicators of insurance companies, of the structure of their portfolios and the compensation activities; 
• Analysis of the quality of the insurance products, especially of the obligatory ones, in terms of risks covered, compensation payment procedures, premiums’ size, franchises and maximum insurance amounts;
• Study on the trade with insurance (reinsurance) services by assessing its share in the total trade with EU with services and its progress in the last years. Identification of the legal and systemic constraints in the extension of reinsurance activities;
• Investigation of the investment potential of the sector and the identification of the barriers in making investments;
• Separate analysis of the penetration of insurances to agriculture and identification of the main constraints that hinder insurances’ popularization among farmers; analysis of European practices and directives in the field ;
• Study on the experience of other European countries in connecting to EU standards and highlighting main performances and failures;
• Estimate the benefits and costs of attracting foreign investors and adjust the legal framework to the conditions of the Free Trade Agreement for companies and consumers;
• Elaboration of two sets of recommendations for relevant public authorities: (1) recommendations for the negotiations on the Free Trade Agreement and relevant provisions for the insurance sector which should be promoted by the Government of the Republic of Moldova in order to be included  in the Agreement; and (2) recommendations on the policies and legal framework for the development on the whole of the insurance sector: increasing the share of the sector in the national economy, the compensation rates, decreasing the premiums, offering a better quality of the insurance services and a more efficient regulation of the sector.
• Elaboration of a policy brief;
• Participation in public debates, including mass-media, on the results of the study.