Order among inusurers - What does new Law on insurance bring?

New Law on insurance which the Serbian Parliament adopted and the National Bank of Serbia proposed, this segment of financial system of the country will be regulated. The business model in insurance field will become closer to European standards, NBS announced.

New regulatory framework, above all, generates better and more efficient mechanisms for citizens’ protection, NBS announces. The central bank states that one of the new things is the fact that the Law on insurance firstly guarantees voluntarily aspect apart from the cases proscribed by special laws, citizens can estimates whether they want insurance service and in which form.

The law generates all necessary pre-requisites to provide modern insurance services, adapted to real needs, NBS added in the announcement. With the acquisition of specific financial service, damages cannot be prevented but their consequences can be decreased to a large extent or neutralized completely, NBS outlines.

Insurance offers other options, especially in the sense of long-standing savings substitution. It is important that citizens understand well the insurance service they buy, i.e. to consider all relevant aspects, from price to benefits.

Therefore, NBS introduced provisions in the Law on insurance which should enable citizens, before signing the insurance contract, proper informing on all elements essential to make the right decision. Apart from that, these information will serve also that, after contract signing, they kno how and whom the citizens should address to obtain their rights.

NBS reminds that, among other things, insurance firm is obliged to inform citizens on insurance terms which are applied in case fo contract on insurance and where it can be seen in which cases here is the right to compensate for the damage.

(Photo: Ivana Vuksa)

Apart from that, citizens must be provided with information on methods and deadlines for submission of damage compensation request, contract termination as well as about methods of rights protection with authorities.

Insurance companies agree with it so, Wiener Stadtische osiguranje says the new Law "pays more attention to protection of right of insurers and additionally regulates obligation of informing contract parties on all issues related for obtaining insurance rights".

Insurance companies were looking forward to adoption of this law.

As Wiener Stadtische osiguranja estimates for our portal, key innovation in the new Law on insurance for insurers is the decision to let composite companies, the ones operating at the same time both life and non-life insurance field, continue working as composite with an obligation of distinguishing property, liabilities and capital.

Our collocutors mention the new Law this dilemma has been solved: only newly set up companies will not be able to operate in both insurance kinds and composite ones will not have to split.

NBS also confirms the Law enables all entities who want to carry out insurance activities as a supplementary work, can do it, in line with modalities proscribed by the Labor Law.

New solutions have been aligned with EU directives, in line with EU rules, they will gradually start market liberalization and by Serbia’s joining EU and STO, market competition will be supported and market competitiveness will be strengthened so that it would near the way the EU open market functions now.

In the next six months, NBS will, as announced, prepare and adopt a set of bylaws essential for full implementation of the new Law on Insurance.

J.DJ.