LAW NO. 503 of 17th November 2004
RELATED TO FINANCIAL STRAIGHTENING,
AND THE WINDING UP OF THE INSURANCE UNDERTAKINGS

ISSUER: THE PARLIAMENT OF ROMANIA
PUBLISHED IN: THE OFFICIAL GAZETTE OF ROMANIA NO. 1193 of 14th December 2004

Chapter 1
General dispositions

ART.1
(1) The proceedings regarding the financial streathening, and the winding up of insurance undertakings, set up by the present law are applicable to the insurance, insurance and reinsurance and reinsurance undertakings as they are defined in the article 2 of the Law no.32/2000 related to the insurance undertakings and the supervision of insurance, with the subsequent amendments and supplementations including their subsidiaries with the head offices abroad as well as to the subsidiaries and branches of insurance undertakings from other third states having the headoffices in Romania.
(2) The present law dispositions do not apply to the insurance mediators, as they were defined in the Law nr.32/2000, and the subsequent supplementations and amendments, these being subject to the common law regulations regarding the judicial re-organisation and the winding up as in the Law no. 64/1995, republished applying in this matter.

ART.2
(1) The present law regulates the financial straightening and the winding up in case of insolvency.
(2) The steps taken within the proceedings regulated by the present law aim the protection of the legitimate interests and the rights of the insurance creditors. .

ART.3
Within the sense of the present law the terms and the expressions hereinbelow have following meaning:
a) insurance undertaking- the insurer and/or the reinsurer as they are defined in the in the article 2 0f the Law no.32/2000, with the subsequent amendments and supplementations.
b) the financial straightening proceedings –the totality of the methods and the administrative measures ordered by the Insurance Supervisory Commission, as the competent authority with the view to maintaining or re-establishing the insurance undertaking financial situation and of preventing its insolvency status.
c) the winding up proceeding–the proceeding involving any measures to achieve the assets of the debtor insurance undertaking in the status of insolvency and the distribution of funds between the creditors, shareholding and associates;
c) competent authority –The Insurance Supervisory Commission as a managing autonomous authority of specialty, the judicial authority as well as other authorities provided for by the law abilitated in accordance with the Romanian law to apply proceedings of the insurance undertakings financial straitening and winding up respectively.
e) supervisory authorities- the national authorities that, by law or other regulations are abilitated to supervise the insurance undertakings;
f) special administrator–any Body or person designated by the Insurance Supervisory Commission encharged with applying of the insurance company’s financial straightening measures;
e) liquidator –any natural or moral person designated by the Insurance Supervisory Commission designated by the judicial authority for the purpose of administrating the debtor insurance undertaking winding up proceeding
f) insurance creditors–insured persons, insurance policy holders, beneficiaries of contracts of insurance and any other injured person by breaching the contracts insurance conditions,
g) insurance claims –the sums owed by the insurance undertaking to the insurance creditors arising out of an insurance contracts, inclusive of reserved sums for these creditors where some elements of the debt are not yet known. Insurance claims are as well those belonging to the Guarantee Fund and the insurance premiums owed by the debtor insurance undertaking as a result of the contracts of insurance ceasing their effects or of the operations effected, according to the law applicable to these contracts before the winding up proceedings as appropriate. .
h) insolvency status- that status of insurance undertaking characterized by:
1. obvious incapacity to pay debts by cash availability;
2. decreasing the value of the available solvency margin under the half of the minimum limit provided for by the regulations in force for the guarantee fund.
3.impossibility of regaining the insurance undertaking financial straightening within the proceeding of the financial straightening.
i) member state –a state member of European Union;
j) member state of origin –the member state in which the insurance undertaking was authorized;
k) concordate –an agreement concluded by the debtor insurance undertaking and the insurance creditors having as object the ways and the dates of payment of insurance claims they have, intervened before the winding up proceedings.
l) member state –the state member of the European Union or that belongs to the European Economic Space.
m) member state of origin –the members state in which the insurance undertaking was authorized to do business
n) home members state –the members’state, other than the member state of origin in which the insurance undertaking has a subsidiary.
o) third state –the state that is not a member of the European Union or does not belong to the European Economic Space.
p) subsidiary –operational unit with legal personality set up upon the law conditions, to which an insurance undertaking holds directly or indirectly the majority of the voting rights
q) branch- an insurance undertaking operational unit without legal personality which carry on directly all or certain insurance activities within the limits of its authorities
r) significant persons –the insurance undertaking administrator and/or the the executive management;
s) significant shareholder –any person that directly and solely, as appropriate, through the medium or in connection wit other persons carries on rights arising out of holding certain shares which, cumulated, represents at least 10% of the total rights to vote in the shareholders General Meeting or as appropriate give the possibility to exercise significant influence on the insurance undertaking management in which it has a significant position.

CHAPTER 2
The financial straightening proceeding. General rules.

ART.4
(1) In view of authorities vested in them by the Law no. 32/2000, with the subsequent amendments and supplementations as well as those provided for in the regulations given in the fulfillment of this Act, the Insurance Supervisory Commission will timely proceed to checking up the financial situation of the insurance undertaking upon documents and reports communicated by it according to the law or, following actions of analyses, the guidance and control carried out by the specialized bodies belonging to this authority.
(2) The check up could be ordered anytime by the Insurance Supervisory Commission following the insurance creditors intimations with reference to the financial situation of the insurance undertaking in view of preventing the insolvency status and/or restore its status within the framework of financial straightening.

ART.5
(1) The proceeding of financial straightening implies any intervention of the Insurance Supervisory Commission to take up the necessary for the regaining the financial straightening of the insurance undertaking for the purpose of preventing its insolvency situation and/or avoiding the opening of winding up proceedings.
(2) The Insurance Supervisory Commission is the only competent authority capable to decide the application of the above methods and the steps of financial straightening with regard to the insurance undertakings, including their branches from other member states having the head office in Romania. The steps of financial straightening cannot prevent the opening by the member state of origin of a winding up proceedings.
(3) The Insurance Supervisory Insurance urgently informs all the supervisory authorities from all other member states with respect to its decision to adopt measures of financial straightening against an insurance undertaking, including the possible concrete results of such measures.

ART.6.
(1) In all the cases the insurance undertaking is obliged to put at the Insurance Supervisory Commission disposal all the documents and the information for the check up and to ensure the carrying on of the analysis and control activity.
(2) At the request of the Insurance Supervisory Commission the insurance undertaking is obliged to determine and let it know the financial situation as well as the required solvency margin within 48 hours as of request.

ART.7
An insurance undertaking enters the financial proceeding, as appropriate, when:

a) it is found out the failure in any way to observe the legal provisions provided for in the article 6 (2) as well as any other legal provisions related to the insurance activity, endangering the honoring of the liabilities assumed towards the insurance creditors;
b) the amount of the available solvency margin decrease under the minimum limit provided for in the regulations issued by the Insurance Supervisory Commission;
c) the amount of the available solvency margin decreases under the minimum limit provided for by the regulations in force with respect to the guarantee fund.

ART.8
(1) In the case provided for in the article 7, the Insurance Supervisory Commission can order by reasoned decision, the opening of the financial straightening proceeding and apply of one of the following ways:
a) financial straightening by a financial straightening plan;
b) financial straightening by special administrator;
(2) By the decision of opening of the proceeding the Insurance Supervisory Commission will order the insurance undertaking to apply the main following prudential steps:
a). the limitation of the volume of gross or net written insurance premiums, for o period between 3 months and one year, in such a way that this could not overpass the amounts established by the decision of opening the straightening proceeding;
b). forbiddance of renewal of the contracts of insurance arrived at the exhausting date or only certain types of insurance contracts, expressly established in the straightening decision, as appropriate;
c) forbiddance of writing of new contracts of insurance and the cashing the related premiums, for the period expressly established by the decision of financial straightening;
d) transfer of insurance portfolio of the insurance undertaking, totally or partially, within the conditions and following the provisions of the specific legislation in force; in case of applying such measures, the insurance undertaking will make urgent operations of transferring of portfolio, without overpassing 60 days from the date of taking such step;
e) ordering the insurance undertaking administrators to call the general meeting of the undertaking with the proposal for the increase of the social capital of, as appropriate, of the paid in free reserve fund, the date of call could not be later than 5 days from the date of call and the effecting of increase of social capital operation cannot be later than 30 working days as of the date of receiving the decision of straitening;
f). forbiddance of certain investments being made by the insurance undertaking;
g). restraining the territorial network of the insurance undertaking by dissolution, in conformity with the law, of certain subsidiaries and branches, work points and/or secondary offices addresses of the insurance undertaking as well as, as appropriate, replacing its significant persons, responsible for the undertaking becoming in the status of financial straightening;
h). checking up, inventorying, instrumenting the registered loss files, as appropriate, in view of evaluating the real losses the establishment of the obligation to pay towards the insurance creditors; the files check up, inventory and the instrumentation will be made as a matter of urgency without passing over 30 days from the date of receiving the straightening decision;
(3) By the decision to open the financial straightening proceeding the Insurance Supervisory Commission can dispose, depending on the case:
a). taking certain steps as to the insurance undertaking estate, consisting of their inventory and conservation for all the period of the financial straightening proceeding;
b). appointing one or more persons to supervise the way of drawing up and performance of the straightening plan;
(4) If the case may be the Insurance Supervisory Commission may ask file an application with the Court asking the set up of security measures as regards the property and the assets of the insurance undertaking according to the law.

ART 9
(1) The decision of opening the financial straightening procedure, provided for in the article 8, paragraph (1) is published in the Official Gazette of Romania, Part I, as well as in two newspapers of national spreading, in conformity with the legal provisions.
(2) The results of the financial straightening proceeding on a civil lawsuit with respect to an estate or a right of which the insurance undertaking was deprived are regulated in the legislation of the member’s state in which the legal proceeding is pending.
(3) After the decision was published as the paragraph (1) provides for the Insurance Supervisory Commission immediately publishes an extract of its decision related to the financial measures of financial straightening in the Official Journal of the European Communities. In the case that the Romanian state through the Insurance Supervisory Commission is informed of the reorganization measures being adopted by the competent authorities from the member states it ensure, through the supervisory authority, such measures being published in accordance with the paragraph (1).
(4) The publishment provided for in the paragraph (3) will contain: name of the supervisory authority, the law applicable to the financial straightening proceeding as well as the designated administrator as appropriate. The publishment of the extract of the financial straightening decision is made in Romanian language or one of the official languages of the member state in which the publishment was effected.
(5) The financial straightening measures apply irrespective of the dispositions connected with the publishment provided for in the paragraphs (3) and (4) produces all the aspects as regards the insurance creditors including the shareholders or the associates or the insurance undertaking employees considered as such the rights of whom are exclusively affected as a result of this measure being applied.
(6) The results of the financial straightening proceeding being opened is subject to the Romanian law with the exceptions of those regarding the contracts and the rights that will hereinbelow be mentioned which are subject of the following regulations:

a) employment contracts and the employment relationships are governed only by the law of the Member state that is applicable to employment contracts/ relationships;
b) contract conferring the right to make use or acquire the immovable property is governed only by the law of the member state within the territory of which the property is situated;
c) rights of an insurance undertaking with respect to an immovable property, a ship or an aircraft subject to registration in a public register are governed only by the law of the member state under whose authority of the register is kept.
(7) Opening the financial straightening proceeding shall not affect the rights in rem of creditors or third parties as regards the tangible or intangible movable or immovable assets or mobiliar or imobiliar assets the specific assets as well as the collection of indefinite assets belonging to the insurance undertaking situated within the territory of a member state at the time of the proceeding opening.
The creditors or third parties real estate rights especially mean:
a) the right to dispose of assets and to obtain satisfaction from the proceeds of or income from those assets in particular by virtue of lien or a mortgage;
b) the exclusive right to have a claim met, in particular a right warranted by a lien in respect of the claim by way of a guarantee;
c) the right to demand the assets and/or to require its restitution by, anyone having possession or using it contrary to the wishes to the party so entitled;
d) a right in rem to the beneficial use of assets; it is equivalent to a right in rem recorded in a public register and opposable to the third parties giving the possibility to appropriating a real estate right in the sense previously shown.
(8) The provisions of the paragraph (7) shall not preclude actions for the voidness, voidability, and/or unenforceability of the acts harmful to all creditors, provided for by the law of the member state of origin. However, the law of the member state of origin will not apply when the person benefiting from an act harmful to all creditors if it proves that following cumulative conditions are met:
a) the respective act is governed by the law of member state other than that of origin;
b) the law of the member state of origin does not provide the legal means to challenge the respective act.

ART.10
(1) The financial straightening proceeding against an insurance undertaking purchasing an asset does not affect the seller’s right based on a reservation of title where at the time of the opening of such proceeding the respective asset is situated within the territory of a Member state, other than the state where proceeding was opened.
(2) The financial straightening proceeding opened against an insurance undertaking selling an asset after the delivery of the asset shall not be considered a ground for rescinding or terminating the sale ab initio and does not prevent the buyer from acquiring title where at the time of the proceeding opening the asset is situated within the territory of a member state other than the one in which the proceeding was opened. In the case in which by a document concluded after adopting re-organization measures an insurance undertaking alienets for consideration a immovable asset, a ship or an aircraft subject to registration in a public register or movable values or bonds the existence or the transfer of which conceive the registration in a register or an account, established by the law or placed in a central system of deposits regulated by a member state law the validity of the respective act is governed by the law of the member state within the territory of which the immovable asset is situated or under the authority of which the register, the account or the respective system is kept.
(3) The provisions of the paragraphs (1) and (2) shall not preclude actions for voidness, voidability and/or the enforceability governed by the law of the member state of origin.
(4) The financial straightening proceeding shall not preclude and affect the insurance creditors actions to set off their claims with those of the insurance undertaking subject to this proceeding, in accordance with the law. The provisions of the paragraph (3) apply accordingly.
(5) Without prejudice to the dispositions of the article 9, paragraphs (7) and (8) the effects of opening the financial straightening proceeding on the rights and the liabilities of the participants to a regulated market are governed by the law applicable to respective market only. It shall not preclude actions for voidness, voidability and/or the enforceability governed by the law of the member state of origin that may be exercised in order to disregard the payments and the transactions made in accordance with the law applicable to the respective market.

ART. 11
(1) The financial straightening proceedings produce effects throughout the European Community from the moment it produces effects in the member state were it was opened.
(2) The financial straightening proceeding produces effects throughout the European Community in accordance with the Romanian state law without other formalities, inclusive of the third parties from other member states even if the legislation of those states does not provide such measures of financial straightening or subordinates their application to certain conditions that are not performed. The financial straightening measures taken in accordance with the legislation of a member state is accordingly applied within the territory of Romanian state.
(3) The Insurance Supervisory Commission the competent authority and supervisory authority urgently informs all the supervisory authorities from all other member states with respect to its decision to open a financial straightening proceeding against an insurance undertaking, including the possible concrete effects of such measures or immediately after this moment.

SECTION 1

The insurance undertaking straightening by a financial straightening plan.

ART.12
(1) In the case of opening the proceeding of the financial streagthening by plan, the insurance undertaking Board or, unique administrator as it is the case, is obliged to draw up and file with the Insurance Supervisory Commission office, within maximum 20 days, from the date of the receipt of this decision, by the insurance undertaking as per the article 8(1)(a)
(2) The straightening plan will compulsorily provide the insurance undertaking’s financial straightening prospectives as well as the concrete ways and the dates of fulfillment of the steps and the dispositions established by the decision of the Insurance Supervisory Commission.
(3) The and will include as well, for the next three financial years at least following information:
a) estimations of acquisitions and administration costs;
b) the budget of income and expenses related to the direct insurance activity and inwards or outwards reinsurances;
c) annual prospective budgets
d) estimation of financial resources intended to cover the liabilities assumed taken into calculation for the determination of the required solvency margin;
e) reinsurance programs.
f) the debts payment program.

ART.13
Following the evaluation of the plan of the financial straightening the Insurance Supervisory Commission will issue a decision by which shall decide, as appropriate:
a) approve the financial straightening plan;
b) supplementation and/or the amendment of the plan within at least 5 days from the date the decision or supplementation and/or amendment was acknowledged;
c) reject the financial straightening plan.

ART.14
(1) As of the date it receives the decision of approval of the financial straightening plan, the insurance undertaking is obliged to accordingly fulfil the measures included in the plan at the established dates and within the conditions therein provided as they were approved by the Insurance Supervisory Commission. The insurance undertaking is as well obliged to bring to all known insurance creditors the measures and the dispositions approved by the Insurance Supervisory Commission within maximum 5 day from the receipt of the decision.
(2) The provisions of the paragraph (1) applies mutatis mutandis in the case of approval the amendments and/or supplementations made according to the article 13(b) as well.

ART.15
In case of rejection of the straightening plan the Insurance Supervisory Commission issued reasoned decision by which following measures may be ordered:
a) obligation for the insurance undertaking to elaborate financing plan as a matter of urgency; in this case the dispositions provided for in the articles 12-14 shall apply mutates mutandis;
b) apply the provisions of the article 8(1)(b), of the present law and the appointment of a special administrator;
c) close the administrative proceeding for financial straightening. In such a case, the Insurance Supervisory Commission will withdraw the insurance undertaking functioning authorization and in the case its insolvency status is found out shall require the Court the immediate opening of the winding up proceeding in accordance with the article 3(j) point (3).

SECTION II
Financial straightening by special administration

ART.16
In the case of applying the financial straightening provided for in the article 8 (1) (b) of the present law, the Insurance Supervisory Commission will designate a person as a special administrator who, will mainly carry out and take all the necessary steps for the re-establishment of the financial situation of the insurance undertaking by observing the dates and the conditions contained by the straightening decision.

ART.17
(1) In all the cases, the insurance undertaking administrator is obliged to bring to the special administrator knowledge all the measures that were established for him by the decision of financial straightening issued by the Insurance Supervisory Commission.
(2) The special administrator rights, obligations and authorities shall be set down by regulations issued by the Insurance Supervisory Commission.

ART.18.

(1) As of the appointment of the special administrator it shall be suspended:
a) the legal authorities of insurance undertakings significant shareholders or the significant persons; these authorities shall be transferred to the special administrator during the special administration period;
b) the voting rights as regards the appointment and /or revoking the insurance undertaking administrators, the shareholders rights to dividends the activity as well as the right to remuneration of the Board of directors and the unique administrator, as appropriate.
(2) The suspension is valid throughout the special administration period.

ART. 19
(1) The Insurance Supervisory Commission decision provided for in the articles 8, 13 and 15 is enforceable.
(2) The insurance undertaking may complain against the decision mentioned in the paragraph (1) at the Court of Appeal of Bucharest –Administrative litigations section in 10 days as of the date of communication subject to striking off.
(3) The application is judged as a matter of urgency. The judgment is final but is subject to second appeal in accordance with the law.

SECTION III
Close of financial straightening proceeding. Effects of the close of proceeding. The insurance creditors rights and obligations

ART.20
Close of financial straightening proceeding of the insurance undertaking is ordered by reasoned decision issued by the Insurance Supervisory Commission in accordance with the law when appropriate:
a) the insurance undertaking’s financial straightening is found out as a result of the fulfilling of straightening measures accordingly ordered;
b) the measures applied in the financial straightening proceeding were not accordingly fulfilled in the conditions and at the established dates or, their applying could not led, during the period they were taken, to the expected result and the removal of the causes that they were generated, as it was the case.

ART. 21
(1) By the decision to close the insurance undertaking financial straightening procedure, the Insurance Supervisory Commission may order, as appropriate:
a) revoking the decision provided for in the article 8, in the case provided for in the art.20 (b).
b) withdrawing the insurance undertaking functioning authorization as well as if its insolvency is found out the immediate request of opening the winding up proceeding in the case regulated by the the article 20(b)
(2) By decision to close of the financial streagthening, the Insurance Supervisory Insurance will order, if it is the case, the revoking of the Administrator specially appointed within the conditions of present law and the cease of his authorities.
(3) The provisions of the articles 9(1) and 19, are applied mutates mutandis to the decision to close the straightening proceeding as well.

ART 22
(1) On the publishment date of the decision to close the financial straightening proceeding, issued in the case provided for in the article 21(1)(b) and the insurance undertaking’s insolvency status the insurance creditors right to require the payment of the sums due from the Guarantee Fund is born.

ART.23
(1) Within 10 days from the date of publishment of the close of the financial straightening proceeding, the insurance undertaking in winding up is obliged to pass the Fund administrator the complete evidence on the loss files as well as accounting and the technical/operational evidences related to these files for the purpose of list publishment of the potential insurance creditors, beneficiaries of the sums due from the Guarantee Fund. The responsibility for the non-fulfillment or for deficient fulfillment of this obligation is born by the insurance undertakings significant persons
(2) Within the period provided for in the paragraph (1) the Fund administrator will appoint a special commission consisting of its own specialists with following membership:
- two members from the management of the Fund administrator of which one will be the head of the commission;
- the head of the financial department or his legal replacement, as appropriate;
- two representatives of the special technical department having expertise in the loss settlement;
- two representatives of the general department of legal advise having at least three years in the legal field;
(3) At the exhaustion of the time provided for in the paragraph (1) the set up special commission will take the necessary steps to publish the list of the insurance creditors which claims, certain, liquid and eligible have arisen out of the evidences communicated by the insurance undertaking according to the paragraph (1).

ART. 24
(1) Within 60 days from the publication of the list provided for in the article 23(3), any persons, other than those included in that list, claiming a right to indemnity against the insurance undertaking, may apply in this respect to the Fund administrator. Failure to observe the time will result in the application being stricken off.
(2) The application provide for in the paragraph (1) is made in writing by each pretending creditor and is filed at the head office of the Fund administrator, by mail, registered, with the receipt confirmation. Together with the application for payment, the insurance creditor will enclose with, to the extend they exist, the documents, justifying scripts, mentioning all the elements necessary to exactly establish the amount required. To the extend that these scripts do not exist the application will contain the reasons for not filing.
(3) The application will mention the nature of the claim, the date of appearance, the certain or estimated amount, if a privilege is claimed or real guarantee as regards the claim as well and which are the goods covered by their insurance.
(4) The request for payment as well as the documents and the information required as per the paragraph (2) and (3) are filed in the Romanian language; the translation of the documents is accepted under the authorized translator signature, according to the law
(5) At the receipt of each of application according to the paragraphs (1)-(4), the commission specially appointed according to the article 23(2) will register and will examine the documentation related to the payment request and will give a decision approving or rejecting it, as appropriate, of the sums claimed from the Fund.
The decision can be disputed in accordance with the article 17 of the present law.
(6), At the expiry of the time provided for in the paragraph (1) the commission will publish the list of the insurance creditors accepted to be paid from the Guarantee Fund. In the case of a Court judgments given in appeal proceeding initiated by the petitioners according to the paragraph (5) subpargraph (2), the publishment of the list accepted to be paid will be made for each case, after the judgment admitting the complaint became irrevocable.

Art.25
(1) In the case that after the exhaustion of the time provided for in the article 24(1) a person claims a right to indemnity from a debtor insurance undertaking, as a result of a subsequent occurring of risk covered by an insurance policy in force at the date of the financial straightening proceeding was closed but not later than the date of the winding up judgment, these may apply for payment, subject to striking off, within 30 days from the risk insured occurred as per the article 24(2)-(4)
(2) In the case of the compulsory third party liability motor insurance contracts, where the portfolio related to these contracts was not transferred until the date the financial straightening procedure was closed, the Insurance Supervisory Commission orders the necessary measures to inform the assureds as regards their obligation to rescind the insurance contracts concluded with the debtor insurance undertaking within 90 days as of the opening the winding up proceeding and their right to recover the respective insurance premiums related to the period between the moment of the contract rescinding and the moment of its exhaustion.
(3) In the case of the occurrence of the risks covered by the contracts provided for in the paragraph (2), between the moment of opening the winding up proceeding and that of rescinding but not later than 90 days as of the winding up judgment issue the Insurance Supervisory Commission nominates an insurance undertaking from those authorized to carry on compulsory third party liability motor insurance in vies of finding out and ascertain the losses. The sums due to the assureds ascertained by the insurance undertaking and accepted for payment by the specially set up commission provided for in the article 23(2) are paid out of the Guarantee Fund sources within the conditions and with the fulfillment of the present law and the Insurance Supervisory Commission’regulations
(4) The provisions of the article 24(2)-(6) apply mutatis mutandis to the applications of the creditors provide for in the paragraph (1)

ART. 26
In all the cases in which it is considered necessary the specially set up commission provided for in the article 23(2) may require the persons provided for in the articles 24 and 25 the supplementation of the documents as well as the point out and the supply of supplementary information as regards creditor’s request for payment. The required information are communicated to the commission, subject to striking off, within 10 days from the date of its request.

ART.25.
The Guarantee Fund administrator is subrogated in all the rights the insurance creditors for the sums equal to payments that were paid out of the respective Fund availabilities.
(2) By departing from the provisions of the article 37 of the Law no.65/995, republished, with the subsequent amendments and supplementations, the Guarantee Fund administrator will be able to register in the credit mass in view of their recovering any sum, interest or expenses which it has been paid from the Guarantee Fund during the winding up proceeding.
(3) In conditions of the paragraph (1) and (2) the Guarantee Fund administrator is entitled to register and recover all the sums paid to the creditors to the extent of payments effected in the winding up proceeding as a result of the occurrence of the risks insured after the opening of the winding up proceeding.

CHAPTER III
The insurance undertaking winding up proceeding

Section I
The introductory application
Bodies applying the proceeding and their authorities

ART. 28
(1) The winding up proceeding is opened by an introductory application by the Insurance Supervisory Commission or by the debtor insurance undertaking or its creditors, as appropriate.
(2) The winding up of an insurance undertaking authorized in Romania as well as its branches set up in another member states is governed by the Romanian law as far as the regime and the application of the winding up proceeding, especially with reference to the:
a) assets forming the object of this proceeding as well as the regime of the assets appropriated by the debtor insurance undertaking after the proceeding was opened;
b) debtor insurance undertaking and the liquidator’s authorities;
c) Conditions in which compensation can be required;
d) effects of the winding up proceeding on the contracts in progress of fulfillment in which the debtor insurance undertaking is a party;
e) effects of the winding up proceeding on the individual enforcing proceedings
f) claims that have to be declared to the debtor insurance undertaking and the claims regime that appears after the opening the winding up proceeding;
g) rules related to the declaration, checking up and the admission of claims;
h) rules related to the distribution of the incomings obtained after realizing the assets, priority order to pay insurance claims and the rights of the insurance creditors who received a partial payment after the opening of the winding up proceedings upon a right in rem or by invoking the set off;
i) conditions and the effects of the winding up proceeding especially by concordat;
j) rights of creditors after the close of the winding up proceeding;
k) bearing the costs and expenses related to the winding up proceeding;
l) rules related to voidness, voidability or the unenforceability of legal acts injuring the creditors rights and the legitime interests of all the insurance creditors.

ART.29
(1) According to the present law the debtor insurance undertaking in the insolvency situation as this is defined in the article 3(j) point 1 is obliged to apply to the Court to be submitted to the winding up proceeding. The application is filed within maximum 20 days from the date of intervening or creating the insolvency situation.
(2) Before filing with the Court the application provided for in the paragraph (1) is sent to the Insurance Supervisory Commission together with the scripts and documents in view of examining it and formulate the defense provided for by the article 31(1). The debtor insurance undertaking will compulsory enclose with the application the special register of the assets covering the technical reserves provided for in the annex no.2 of the Law no.32/2000 with the subsequent amendments and supplementations.
ART.30
(1) The insurance undertaking’s creditors other than the insurance creditors that are provided for in the articles 23(3), 24(6) and the article 25(1), having claims that are paid from the Guarantee Fund availabilities may file with the Court an application to open the winding up proceeding against a debtor insurance undertaking on the conditions of the present law.
(2) Provisions of the art.29 (2) will apply mutatis mutandis with respect of the sending of application and the justifying documents to the Insurance Supervisory Commission.
ART.31.
(1) The application provided for in the articles 29(1) and 30(1) will be registered by the Court together with the defense application of the Insurance Supervisory Commission by which it will communicate if the debtor insurance undertaking is the subject of a financial straightening proceeding or not according to the present law, with the view to regaining the financial situation or, as the case may be, for the honoring of the payments to the creditors within the administrative measures of financial straightening.
(2) The opening of the winding up proceeding is announced by the Court if:
a) The Insurance Supervisory Commission let it know by the defense application that, at the date of opening of winding up proceeding application there is no pending a financial straightening proceeding for the insurance undertaking activity, within the present law provisions or,
b) The Insurance Supervisory Commission communicated, by defense application that there are not possibilities to regaining the financial situation to pay its all creditors claims within a financial straightening proceeding.
ART.32.
(1) Based upon the present law the Insurance Supervisory Commission shall be able to file an application to open the winding up proceeding against a debtor insurance undertaking in any of the cases provided for in the article 3 (h) points 2 and 3.
(2) The application will be accompanied by the following documents:
a) the Insurance Supervisory Commission decision referring to the withdrawal of the debtor insurance undertaking functioning authorization, and the opening of the winding up proceeding against it;
b) the Insurance Supervisory Commission referring to the close of the financial straightening proceeding, if the debtor insurance undertaking was the subject of such proceeding before and the immediate opening of the winding up proceeding according to the article 13 lett. c) and article 18 lett. b)
c) any other scripts and documents necessary to justify the application to the Court.

ART. 33
(1) Following the filing of application, registered according to the article s 29-32, the Court will immediately notify the parties mentioned in the above articles. The notice is also sent to the Guarantee Fund administrator.
(2) The insurance undertaking complaint against the application provided for in the articles 30 and 32 could be filed within maximum 5 days as of the date of the receipt of notice. The complaint is heard as a matter of urgency and with priority; the Court judgment is subject to second appear; within 10 days from its communication.
(3) At the first hearing date the Court will examine the introductory application and the related documentation and, in the case in which the debtor insurance undertaking has not disputed the insolvency situation, in accordance with the paragraph (2) it will give a judgement to open the winding up proceeding.

ART.34
(1) Following the judgment to open the winding up proceeding the Court will immediately communicate it to the interested parties, the Guarantee Fund administrator as well as to the Register of Commerce office where the debtor insurance undertaking is incorporated with the purpose to making the remark ”insurance undertaking in winding up proceeding”. The communication will be made public through the medium of the Insurance Supervisory Commission in at least two newspapers of national spreading according to the law.
(2) In the case the debtor insurance undertaking has branches and/or subsidiaries in other countries, the Insurance Supervisory Commission will immediately inform the supervisory authority from the home state of the respective branch/subsidiary about the judgment to open the winding up proceeding in accordance with the law
(3) All the costs related to these measures are born from the debtor insurance undertaking patrimony; in the absence of necessary availabilities, availabilities of the liquidation fund provided for by the Law no.64/1995, republished and the subsequent amendments and supplementations will be used
(4) As of the opening of proceeding, all the debtor insurance undertaking acts will bear the remark provided for in the paragraph (1)

ART. 35
(1) Following the opening of the winding up proceedings it is forbidden to the significant shareholders of the debtor insurance undertaking or the persons previously holding managing positions to sell the shares held in the debtor insurance undertaking without the previous advise of the Insurance Supervisory Commission and the approval of the receiver
(2) The receiver will order the tying up of the shares according to the paragraph (1) in their register of evidence kept by the debtor insurance undertaking or in the independent registers.

ART.36
The proceeding of the winding up provided for in the present chapter is exclusively in the jurisdiction of the Court were the head office of the debtor insurance undertaking is situated and that was inserted as such in the office of the Register of commerce, and is carried out by the receiver nominated in accordance with the law.

ART.37.
Following the judgment ordering the opening of the winding up proceeding being given the Court will withdraw the managing bodies of the debtor insurance undertaking the right to represent it, the right to administrate the insurance undertaking estate and to dispose of it.

ART. 38
(1) Upon the dispositions of the present law the main authorities of the Court are the following:
a) giving the judgment to open the winding up proceedings against the debtor insurance undertaking;
b) designating the receiver by judgment, establishing his authorities as well as, if it is the case, his replacement;
c) notifying the Guarantee Fund administrator as well the Insurance Supervisory Commission as regards the introductory applications registration and the issuing the judgments to open the winding up proceeding respectively;
d) judging the legal actions filed by the de receiver to void certain transfer of patrimonial character prior to the judgment ordering the opening of proceeding;
e) confirming the plan of distribution of the sums obtained through liquidation;
f) judging the applications for the claims set off, filed by the debtor insurance undertaking or the insurance creditors, as it is the case, with the previous advice of the Insurance Supervisory Commission;
g) establishing civil liability of the managing bodies, auditors and the executives or the persons having control authorities in the debtor insurance undertaking;
h) approving ways of liquidation and confirming the transactions to buy assets and assuming liabilities;
i) confirming the concordate previously advised by the Insurance Supervisory Commission and the receiver’s approval;
j) giving the judgment to close the proceeding
(2) Court judgments are final and enforceable and may be appealed by recourse within 15 days from the communication.
(3) The recourse is judged by the Court of Appeal of Bucharest, as a matter of urgency and with priority within 10 days from the date communication. The dispositions provided for in the article 6^1(1) and (2) of the Law no.64/1995, republished with the subsequent amendments and supplementations apply mutates mutandis.

ART. 39
(1) In the light of the present law, the receiver has following main authorities:
a) instructing the Court for any problem that needs its decision;
b) establishing the debtor insurance undertaking responsibilities as well the dates of their fulfillment;
c) nominating the liquidator, controlling his activity as well his replacement if it is the case;

d) establishing the program of the insurance creditors meetings in all the cases he feels it necessary
e) taking necessary steps arising out of the evaluation the liquidator’s reports as well as deciding on the complaints against such steps;
f) advising the plan distribution of the sums obtained from the din liquidation and submitting it to the Court for confirmation;
g) accepting the liquidation plan of certain assets from the insurance undertaking patrimony previously advised by the Insurance Supervisory Commission;
h) approving the concordate previously advised by the Insurance Supervisory Commission;
i) performing any procedural acts required by the present law.

j) Judging the debtor insurance undertaking complaint against the introductory application to open the winding up proceedings made by the Insurance Supervisory Commission or the insurance creditors, as appropriate;
k) judging the complaints of the Insurance Supervisory Commission, debtor insurance undertaking or the insurance creditors, as appropriate

l) judging the Insurance Supervisory Commission applications for the voidness or voidability of prejudiciabile and/or fraudulent acts concluded by the debtor insurance undertaking contrary to the interests and the rights of the insurance creditors prior to opening the winding up procedure;
m) authentifying the act concluded by the liquidator for the validity of which the authentical form is required;
n) requiring the closing of the winding up proceeding.

(2) To realize his authorities implying the application of regulations that are specific to insurance activity carried on by the debtor insurance undertakings the receiver may require the Insurance Supervisory Commission opinion in its capacity as the autonomous administrative specific authority.

ART. 40
According to the present law, the liquidator’s authorities are the following:
a) examination of the debtor insurance undertaking activity in comparison with the statement of facts and drawing up of a detailed report on the reasons and the causation leading to its insolvency status, mentioning the persons who could be responsible for the insurance undertaking’s wind up. The report is drawn up and presented for the receiver approval, within maximum 30 days from the date of his nomination; a copy of this report will be sent to the Insurance Supervisory Commission. Upon the request of liquidator, for grounded reasons, the receiver may, by minute, prolong the period for the report presentation.
b) inventorying and recording the claims of the Guarantee Fund administrator as well as other amounts due to it in accordance with the law observing the rights, priorities and/or its legal guarantees;
c) keeping in force, rescinding or one-sidedly repudiating certain contracts concluded by the debtor insurance undertaking priorly advised by the Insurance Supervisory Commission;
d) leading and co-coordinating the activity of the debtor insurance undertaking, doing operations in the interest of the winding up proceeding respectively, including collecting the delayed insurance premiums related to the contracts of insurance in force at the date of opening the winding up proceeding;
e) contracting loans, with the advise from the Insurance Supervisory Commission and the receiver’s approval, with or without guaranteeing them with the assets of the debtor insurance undertaking.
f) applying seals, inventorying the debtor insurance undertakings estate and taking relevant steps for conserving it upon opening the procedure;
g) hiring the specialized personnel needed for the liquidation activity, as well as the supervising and managing this activity;
h) filing applications to void the prejudiciable and/or fraudulent, concluded by the debtor insurance undertaking contrary to the legitimate interests and the rights of the insurance creditors during the 3 years prior to opening the procedure;
i) filing the application to void any set ups and transfers of rights having patrimonial character to third persons and for the reimbursing them the goods transferred and of the value services performed by the debtor insurance undertaking by:
1. gratuitous acts, with the exceptions of humanitarian sponsorships, made during the 3 years prior to opening the procedure;
2. acts concluded with a shareholder holding at least 5% of the debtor insurance undertaking stock;
3. acts concluded with an administrator, managing director or any other member of the management or supervising bodies of a debtor insurance undertaking;
4. acts concluded with any other individual or moral person in close connections with the debtor insurance undertaking; a person is deemed to be in close connection with the company when:
- holds a direct or participation or through the medium of a control relationship of at least 20% from the social capital or the rights to vote of the debtor insurance undertaking;
-the person is permanently connected with the debtor insurance undertaking through the medium of a control relationship or performs a common politics in respect of it. –
-the person performs authorities of control in respect of the debtor insurance undertaking;
j) filing claims to void the set ups and transfers of rights of patrimonial character to third parties as well as for their reimbursing of all the estate transferred and the amount for other services performed by the debtor insurance undertaking contrary to the insurance creditors by:
1. acts concluded within the 3 years prior to the opening the procedure containing the parties will to withdraw property from the pursuing by the insurance creditors or by any way injure their rights and legitimate interests;
2.any commercial operation in which the insurance undertaking performance is obviously larger than that that is received done within the 3 years prior to opening procedure;
3. act of transfer of ownership to a creditor in his benefit or by closing a previous duty done in the 180 days prior to opening the proceedings if the amount the creditor could obtain within the proceedings framework is less than the amount of the act of transfer;
4. setting up or finalizing of a guarantee in rem for an unprivileged claim within the 120 days prior to opening the proceedings;
5. gratious acts of transfer with the exceptions of humanitarian sponsorships executed in accordance with the legal provisions done within the 3 years prior to opening the winding up procedure;
6. acts concluded by significant persons or the significant shareholders with the debtor insurance undertaking in which they hold such position in the year prior to opening the winding up proceedings.
k) examining the claims on the debtor insurance undertaking and formulating objections against them as the case may be;
l) receiving the sums related to the delayed insurance premiums due to the debtor insurance undertaking, depositing them within 24 hours in the accounts of the Guarantee Fund with an exclusive right of disposal of its administrator;
m) pursuing the cashing of any claims of the debtor insurance undertaking’s estate, arising out of the transfer of goods or of sums of money, performed by it prior to the filing the introductory application for the opening of proceeding;
n) drawing up a monthly report on the evolution of the winding up procedure to be presented for the approval of the receiver and to be sent to the Insurance Supervisory Commission as well as to the Guarantee Fund;
o) informing the receiver of any problem that would require his decision;
p) concluding any document on behalf of the debtor insurance undertaking starting an co-coordinating, on its behalf of any action legal proceedings;
r) drawing up final balance sheet of liquidation; if the liquidation prolongs over the financial year the liquidator is obliged to draw up the annual balance sheet and file it with the Bodies and at the dates provided for in the financial-accounting samples for commercial companies;
s) performing any disposition of the Insurance Supervisory Commission issued in its capacity and a competent national supervisory authority, in cases expressly provided for by the law with the approval of the receiver, in view of guaranteeing the defense of the interest and rights of the insurance creditors;
t) liquidating the goods and the rights from the debtor insurance undertaking’s estate, with the advice of the Insurance Supervisory Commission, letting the Guarantee Fund know and securing approval from the receiver pursuing their optimal turning to account, aiming the payment of debts to the insurance creditors by:
1. transactions regarding the purchasing of assets and assuming liabilities through the medium of which an insurance undertaking with a good or very good financial status acquires, totally or partially, the debtor insurance undertaking assets and assumes, partially or totally, its liabilities; the transactions can be concluded with the prior advice of the Insurance Supervisory Commission and with the approval of the receiver;
2. selling of goods, e.g. buildings, pieces of lands, apparatus, movable values, operations which can be carried on with the prior advice of the Insurance Supervisory Commission only;
3. any other proceeds to bring into being the assets of the debtor insurance undertaking, namely: assignments of claims, novations, made in the interest of the winding up proceeding at a negotiated value;
u) making any acts of proceeding required by the present law.

ART.41
(1) The debtor insurance undertaking and/or any of the insurance creditors, the Insurance Supervisory Commission as well as the Guarantee Fund administrator can complain against the steps ordered by the receiver and/or the liquidator, in the cases provided for in the law, as appropriate. The complaint can be lodged within maximum 5 days as of the date of acknowledging the measures complained against.
(2) The Court is decided as a matter of urgency and with priority. If finds it necessary, the Court may hear the case, summing the petitioner up, the Insurance Supervisory Commission, the insurance creditors and the Guarantee Fund administrator as appropriate, and with the compulsory participation of receiver.

ART.42
During any stage of proceeding, the Court can, for grounded reasons, replace the receiver, by irrevocable minute given after hearing it in the Council Chamber. The liquidator can be replaced by the receiver having the prior advice of the Insurance Supervisory Commission.

ART. 43.
The reports the liquidator is obliged to draw up according to the law will be compulsorily sent to the Insurance Supervisory Commission as well as to the Guarantee Fund administrator. Failure to comply with his duties is a grounded reason for the replacement, as per the article 42.

SECTION II
Opening the winding up proceeding. Effect of the proceeding opening.

ART. 44
(1) Within the meaning of the present law entering by the debtor insurance undertaking in winding up proceeding will be ordered by the Court.
(2) The judgment ordering the opening of the winding up proceeding will be followed by the withdrawal by the Insurance Supervisory Commission of the debtor insurance undertaking’s functioning authorization if this was not ordered before giving the judgment. The Liquidator or any other persons appointed in this respect by the competent authority will publish the judgment in the Official Gazette of Romania Part IV in conformity with the law in respect of publisment as well as in two newspapers of national spreading. Concurrently with the publishment the Court will send the judgment to the Insurance Supervisory Commission and the Guarantee Fund Administrator as well.
(3) The withdrawal of the functioning authorization will not prevent the liquidator or other person authorized by him in this respect to carry on some of the insurance operations of the debtor insurance undertaking to the extend that is necessary or adequate to the scope of the proceedings; these operations will carried on only with the approval of the Insurance Supervisory Commission.
(4) The judgment to open the winding up proceeding has as effect the suspending of all judicial or extrajudicial lawsuits and the individual actions of enforcement against the debtor insurance undertaking. The claims that are formulated in these judicial or extrajudicial actions will be registered in the Court winding up file and are submitted to examination and enlisting into the list of creditors in accordance with the law.
The law of the member state within the territory of which the civil lawsuit is pending governs the effects of the winding up procedure on a pending civil lawsuit with respect to an estate or a right of which the insurance undertaking was deprived.
(5) The insurance claims confirmed by the enforceable titles obtained after the winding up judgment was given are filed with the Court under the penalty of striking off within 10 days at the latest as of the date of the title was obtained. The liquidator is obliged to to examine the claims and if it is the case to enlist them in the list of creditors observing the priorities and/or privileges or their legal guarantees. In any if the cases the application for registration of these claims can be file not later that the date of drawing up the final list of claims in conformity with the law.

ART. 45
(1) After giving the judgment to opening a debtor insurance undertaking winding up preceding the liquidator will draw up the report provided for in the article 40 (a) underlining, among others the proposals of the concrete ways of liquidation provided for in the article 40(t).
(2) In the case of approval by the Court of the ways of liquidation provided for in the article 40(t) point1, the liquidator will immediately organize, if the way approved permits, the negotiations referring to transaction to purchase assets and assuming liabilities; the liquidator will organize, in this respect, an information meeting with all insurance undertakings found eligible by the Insurance Supervisory Commission in view of presenting the terms and the conditions of negotiation; before holding the meeting, the liquidator is obliged to sign a confidentiality agreement with the respective insurance undertakings, by which these undertake, within the limits of the law, to keep the professional secret as regards the information about the debtor insurance undertaking that is the subject of negotiation.

ART.46
(1) The liquidator will write an inquiry regarding the purchase of assets and assuming the liabilities and will send it to the insurance undertakings participants at the information meeting that are interested in making a transaction related to purchasing assets and assuming liabilities in accordance with the article 45; the inquiry transmission is made under confidentiality regime.
(2) Upon the interest manifested by the insurance undertakings participating at the information meeting, the inquiry will mainly contain the following elements:
a. cathegories of assets and liabilities that will make the object of transaction as well as their volume frames conditional upon the liquidity and the exigibility;
b. the liquidation amount for each of the category of assets;
c. the dead line for the respective insurance undertakings to present the offer to the liquidator with reference to the transactions proposed to purchase the assets and assume liabilities;
(3) The insurance undertakings offers are sent to the liquidator, in a sealed envelope within 10 days at the latest as of the date of receiving his inquiry; the liquidator will examine the offers within the shortest possible time and will elect the offer of the insurance undertakings which he will conclude the transaction with, by observing the principle of the presumed minimal cost;

ART. 47
In case there are no offers received within the deadline mentioned in the article.46 (3) or, as it is the case, the offers received do not meet the feasibility requirements of such a transaction or this transaction is not advised by the Insurance Supervisory Commission or not approved by the Court, the liquidation is going to be made by other methods provided for by the law.

ART. 48
(1) As of the date of the judgment of winding up proceeding opening in the present law conditions, becomes irrevocable the Guarantee Fund administrator is entitled to effect payments from the fund resources with the view to settle the claims of the insurance creditors in accordance with the law.
(2) The insurance creditors which claims were paid from the Guarantee Fund cannot register and require their settlement and the payment of the sums claimed within the winding up proceeding of the debtor insurance undertaking.

ART.49
(1) The insurance claims have absolute priority over any other claims in respect of the assets eligible to represent the technical reserve of the debtor insurance undertaking in winding up proceeding. These claims will be paid in ROL immediately after the payment of the claims provided for in the article108 (1) of the Law no.64/1995, republished, with the subsequent amendments and supplementations.
(2) The Guarantee Fund administrator claims are insurance claims in the sense of the present law and benefit from all the rights and guarantees or priviledges provided for in the paragraph (1), as a result of the subrogation in the creditors rights paid from the Fund.

SECTION III
Liability of the management bodies, auditors, internal audit and of the executives of the debtor insurance undertaking in insolvency status.
Close of the winding up proceeding.

Art.50 (1) The Court can order that a part of the insurance undertaking in insolvency status to be born by the members of the management bodies, internal and financial auditors, executives and/or having authorities of internal control occupying the respective positions in the 3 years prior to beginning of proceeding, if they contributed to the insurance company achieving such status, by one of the following acts:
a. performed acts of commerce in their own interest, under the coverage of the insurance undertaking;
b. ordered for their own interest the continuation of an activity that was obviously leading the insurance undertaking to insolvency status;
c. used the goods and the credits of the insurance undertaking in their own benefit;
d. kept fictions accounting evidence facilitated the disappearance of certain accounting documents or did not book-kept the accounts in accordance with the law;
e. misappropriated or hidden a part of the insurance undertaking assets or fictiously increased its liabilities;
f. used ruinous means to procure funds to the insurance undertaking aiming the delay of ceasing payments;
g. within the 60 days prior to cease of payments, they paid or disposed payments, preferentially to one of the creditors in prejudice to other insurance creditors;
h. drawn up balance sheets, other accounting statements or reports in disobedience of the law;
i. failed to perform or inconsistently fulfilled the administrative steps of financial straightening taken by the Insurance Supervisory Commission or, as it was the case, took decision in disrespect of the above, thus leading to the status of insolvency and opening of the winding up proceeding against the insurance undertaking;
j. during the internal actions of control, they negligently did not identify and notify the facts that have lead to frauds and to a deficient administration of the insurance undertaking estate.
(2) Dispositions of the paragraph (1) apply as well to the other persons carrying out the above-mentioned positions on or after the present law entering into force.

ART. 51
The sums paid in conformity with the article 50 (1) enter into the estate of the debtor insurance undertaking and are designated to pay its debts.

ART. 52.
(1) In view of taking the steps provided for in the article 50(1), the Court can be instructed by the receiver, liquidator or any of the insurance creditors, by the Insurance Supervisory Commission. Upon the evidence of the file, the Court shall be able to order conservatory measures
(2) The enforcement against the persons provided for in the article .50(1) is made according to the dispositions of the Code of civil procedure with the exception of the cases in which, it is ordered otherwise by law.

ART. 53
(1) The the winding up proceeding will be closed by the Court, by judgment, at the request of the receiver, where following is find out as appropriate:
a) the final report was approved;
c) all the funds and/or the goods of the debtor insurance undertaking estate were distributed.
d) the insurance creditors claims were paid out based upon a contract or other similar measures;
e) all the sums due to the Guarantee Fund were recovered by it.
(2) The Court judgment will be communicated by the receiver to all implicated persons according to the present law and the Law no.64/1995, republished, with the subsequent amendments and supplementation. The sums possibly remaining after the entitled parties rights were satisfied will be transferred to the Guarantee Fund, to its budget, with the view to be administrated and managed by the Fund according to the law.

ART. 54
In any stage of the proceeding, the Court may give a judgment of closing the procedure if it is found out that there are not assets in the debtor insurance undertaking estate or these are not sufficient to cover the administrative expences and none of creditors offers to advance necessary sums.

ART. 55
The dispositions of the present chapter are supplemented, subject to compatibility, by the provisions of the Law no.64/1995 republished, with the subsequent amendments and supplementation as well as the Code of the civil procedure.

CHAPTER IV
The regulation of the conflict of laws in the field of the insurance undertakings insolvency

SECTION I
The field of application. Jurisdictions and the applicable law.

ART.56 The present chapter regulates:
a) the proceeding of the winding up of the insurance undertakings, Romanian moral persons, including their branches having the offices abroad as well as the branches from Romania of the foreign insurance undertakings in the status of insolvency.
b) the ways in which the authorities implicated inform and consult each other in respect of the measures of the proceedings of liquidation of the insurance undertakings.

ART.57
(1) The Court with the jurisdiction determined by the Romanian Law is the sole authority authorized to decide in respect of the appliance of the winding up proceedings against an insurance undertaking, Romanian moral person, inclusive the branch of it having the office in other state members. The Court judgment can be given in the absence or after the taking certain measures for financial straightening. The judgment to open winding up proceeding as well as its effects is subject to Romanian law. The provisions of the articles 9 and 10 apply accordingly.
(2) The decision of the competent authority provided for in the paragraph (1) related to the opening the winding up proceedings against an insurance undertaking, Romanian moral person including its branches from other member states is admitted without other formality within the territories of all other member states and have effects in these states as soon as it has effects in the Romanian state
(3) The competent authority provided for in the paragraph (1) will immediately informs the Insurance Supervisory Commission about the decision to open a winding up proceeding including the practical effects that such kind of proceeding could have; the information will be made before adoptation of such decision or immediately after that. The Insurance Supervisory Commission informs the supervision authorities from all other member states of the decision to open the winding up proceedings including the effects that such kind of proceeding could have as a matter of urgency.
(4) The dispositions of the paragraphs (1) and (2) will not impede the appliance of the provisions referring to appeal against the judgments of the Court.

ART.58
(1) After the information provided for in the article 57(3) the Insurance Supervisory Commission will immediately take the steps needed to publishing of an extract of the judgment to open the proceeding of judicial reorganization and the winding up in the Official Journal of the European Communities.
(2) The articles 9-11 apply accordingly.

ART.59
(1) The Court in jurisdiction according to the Romanian law is entitled and can ask the registration of the judgment to open the winding up proceedings against a debtor insurance undertaking in the register of immovables, the register of commerce as well as other public register held in other member states.
(2) In all the cases in which the registration provided for in the paragraph (1) is compulsory according to the respective member state law, the Court will order all the measures necessary to effect such operation. The expenses occurred by the registration are considered costs incurred by the procedure.

ART. 60
(1) The liquidator appointed according to the article 39(1)(c) can act within the territory of certain home member states without any formality, either upon a certified copy of the judgment of the Court in jurisdiction that appointed him, or upon a certificate issued by this Court. The appointing act can be translated in the official language or in one of the member states language within the territory of which the liquidator will act, without being necessary to legalize it or other similar form.
(2) The liquidator shall make use of the authorities he has according to the Romanian law within the territory of the member states, can appoint any persons to help and/or to represent him in the development of procedure within other states territory, specially aiming the removal of the difficulties encountered by the insurance creditors from these states. In similar conditions the liquidator appointed in accordance with the law prevailing in another member state can act within the Romanian territory when Romania is a home member state.
(3) Performing his authorities the liquidator will submit himself to the laws of the state within the territory of which he acts especially as regards the procedure to turn the assets to account and the supplying the information to the employee of the insurance company from the respective member state; using the force or the right to settle the disputes or differends of any kind are excluded from his authorities.

ART. 61
(1) If, after the opening of winding up proceeding, an insurance undertaking aliens an immovable asset, a ship and/or aircraft subject to registration in a public register or mobile values and/or bonds the existence or the transfer of which implies an entering with a register or an account established by law or that are placed into a central system of deposits regulated by the law of a member state within the territory of which the immovable assets lies or under the authority of which the register/account/respective system is kept.

SECTION II

The information and the rights of insurance creditors

ART.62
(1) After the opening of the judicial reorganization and the winding up of an insurance undertaking, Romanian moral person the Insurance Supervisory Commission or the liquidator, as appropriate, will immediately inform the known creditors usually residing, or domiciling or the having the headoffice in Romania or another member states
(2) The information will be made in the form of a written notice, communicated to each insurance creditor and will especially refer, to the dead lines, sanctions provided for nonobservance of these deadlines, the Body or the authority in charge to accept application for claims or the remarks referring to claims as well as other provided for measures, the legal requirements for the taking into consideration by the Court in jurisdiction of the claims with the registration of their admission applications in connection with these claims. The notice will indicate as well if the preferential claims or those for which real guarantees were set up are submitted to check up or not.
(3) The information provided for in the paragraph (2) is made in Romanian language. It will be used in this respect a proforma with the title:”Invitation for claim application, deadlines to be observed”or “Invitation to make remark on a claim, deadlines to be observed”written in all the official languages of the European Union. In any case in which a known creditor holds an insurance claim, the information included in the notice will be furnished in one of the official languages of the member state/states in which the creditor has his usual residence, domicile or the central head office, as appropriate.

ART.63
(1) The insurance creditors have usual residence, domicile or the headoffice, as appropriate, within the territory of a member state including the public authorities from that state have the right to apply and to register insurance claims or to make written remarks with reference to such claims in accordance with the present law.
(2) Declarations of claims and /or remarks with reference to such claims as appropriate are addressed to the Guarantee Fund Administration and/or the liquidator and are sent in the in the official language or in one of the official languages of the member state/states in which case “Declaration of claims”or “Remarks referring to claims”as appropriate will compulsory be in Romanian language.
(3) The insurance creditors claims having the usual residence, domicile or the head office in a member state are equally treated with the same rank as the claims of similar nature presented by the insurance creditors having the usual residence, domicile and the head office in Romania.
(4) The insurance creditors making use of their rights provided for in the paragraph (1) are obliged to send copies of the documents attesting their claims if in existence, to indicate the nature of claim, the moment it was born and their amount, if there are privileges, guarantees in rem and other rights as well as which are the claims warranted in this way. The insurance creditors are not obliged to indicate the priority that are allowed to insurance claims as provided for in the article 49.
(5) The Guarantee Fund administrator and/or the liquidator, as appropriate, is obliged to assure the timely information of the insurance creditors especially on the progresses made for the debtor insurance undertaking’s assets turning into account in accordance with the present law.
(6) The member states supervisory authorities may require information with respect to the progresses made in the winding up proceedings from the Insurance Supervisory Commission.

SECTION III-
Rules related to financial straightening and the winding up proceedings applicable to the branches from Romania of the insurance undertakings of the member states.

ART. 64
The administrative and the judicial authorities of the home member state are the solely authorized to decide in respect of the opening of a financial straightening or a winding up proceeding, as appropriate, against an insurance undertaking inclusive of its branches set up in the member states. The law of the home member state is applicable in conformity the articles 9-11 and 61.

ART. 65
(1) The financial straightening or the winding up proceedings ordered against an insurance undertaking from another member state which carries on business within the Romanian territory, will apply without other formalities in Romania and will produce effects in conditions and as of the date provided for in the legislation of the respective member state.
(2) The winding up proceeding will apply in accordance with the legislation of the home member state with the exceptions expressly provided by the law.
(3) Upon receiving the related notification from the competent authority of the home member state the Insurance Supervisory Commission will immediately inform about the decision on the opening of the proceeding of the winding up, by publishing it in the Official Gazette of Romania Part I.

ART.66
(1) The persons authorized to apply the steps ordered by the competent authorities of the member state of origin will be able to act without any other formality, within the territory of Romania upon a certified copy of the appointment act accompanied by a translation into Romanian language.
(2) The persons provided in the paragraph (1) will be able to enforce in Romania all the authorities that belong to them according to the legislation of the member state of origin. These persons will be able to appoint other persons to represent them in Romania, inclusive of assisting the insurance creditors during the process of applying the steps in the reference.
(3) Enforcing their authorities and abilities within the territory of Romania, the persons provided for in the paragraph (1) will observe the Romanian legislation especially that regarding the procedure of the turning the assets into account and the supply of information to the employees form Romania of the foreign insurance undertakings.

ART. 67
The competent administrative and the judicial authorities from the home member states, or the liquidator, as the case may be, will inform the office of the Register of commerce about the decision on the opening of a proceeding of judicial reorganization or the winding up with the view to effecting necessary alterations.

ART. 68
(1) The Court having jurisdiction according to the Romanian law, is obliged to immediately inform the competent authorities of the home member state through the medium of the Insurance Supervisory Commission, about the decision to open a winding up procedure, including of the practical effects this procedure may have, if the decision was disposed with respect to a subsidiary or a branch from Romania of an insurance undertaking having the head office in a state other than a member state, but has branches or subsidiaries set up within the territory of other member states..
(2) The information will be made before adopting the decision to open the proceeding or immediately after than and will underline the fact that the functioning authorization of the respective subsidiary or branch has been withdrawn.

SECTION IV
The insurance undertakings benches in third states

ART. 69
(1) Notwithstanding the definitions provided for in the article 3 and with the view to applying the present law to the financials straightening and the winding up proceeding respectively with respect to a branch situated in a member state but belonging to an insurance undertaking the head office of which is situated in the outside of the European Communities:
a) the home member state means the member state in which the branch received functioning authorization;
b) supervisory authorities and competent authorities mean the authorities of the members state in which the branch received authorization.
(2) In the case in which the insurance undertaking the head office of which is situated in the outside of the European Community has branches in at least
two members stated each of the branches benefit from an independent treatment in applying the present law. The competent authorities and the supervisory authorities, as well as the liquidators appointed from these member states shall cooperate and coordinate their actions with the view to carry out their authorities and abilities established by the law.

CHAPTER V
Penalties

ART.70
The breach of the present law and/or the regulations issued to fulfill it is found out and penalized by the Insurance Supervisory Commission.

ART.71.
Following acts are deemed to be contraventions:
a) failure to fulfill the obligation to put the documents and information required in conformity with the article 6(1) at the disposal of the Insurance Supervisory Commission;
b) failure to determine and communicate the financial situation well as the required solvency margin to the Insurance Supervisory Commission within 48 hours in accordance with the article 6(2);
c) failure to apply or the insufficient application of the measures ordered by the Insurance Supervisory Commission in the financial straightening decision as per the article 8(2) and (3) letter a);
d) failure to draw up and file by the deadline at the office of the Insurance Supervisory Commission or as appropriate the financing program in compliance with the article 12 and 15 letter a);
e) failure to observe or insufficiently comply with the financial straightening plan measures and dispositions or as appropriate with the financing program as approved by the Insurance Supervisory Commission in accordance with the articles 14(1) and 15letter a);
f) breaching in any way of the obligation to bring to the insurance creditors knowledge of the financial straightening measures ordered by the Insurance Supervisory Commission in accordance with the article 14;
g) breaching in any way the obligation to let the administrator know the financial straightening decision and the measures ordered by the Insurance Supervisory Commission, according to the article 17(1);
h) breaching in any way the obligation to hand over to the Guarantee Fund administrator the complete list of the loss files as well as the technical/ operational and accounting evidence related to them in conformity with the article 23(1)
i) breaching in any way the obligations to file the application to open the winding up proceedings in accordance with the article 29.
(2) The contraventions provided for in the paragraph (1) are penalized as follows:
a) fine from ROL150, 000,000 to 300, 000, 000 applied to the insurance undertaking;
b) fine from ROL 50,000,000 to 150,000,000 to the insurance undertaking’s significant persons;
(3) The fine will be applied to the insurance undertakings and/or the significant persons who committed the contraventions. The fine penalty will be applied to each of the persons who participated to the act of contravention.
(4) Depending on the nature and the gravity of the act the Insurance Supervisory Commission can apply together with the fine provided for in the paragraph (2) any of the penalties provided for in the article 39(3)(d) and (e) of the Law no. 32/2000, with the subsequent amendments and supplementations.

CHAPTER VI
Transitional and final dispositions

ART.72
The proceedings of the winding up, opened against the insurance undertaking until the enactment of this law will continue to be carried on and will be closed in accordance with the present law.

ART.73
The dispositions of the article 56-69 of the present law are applied mutates mutandis as regards the private international relationships in the field of insurance, insurance-reinsurance and reinsurance undertakings and mutual associations financial straightening including their branches having the head office abroad as well as the branches and subsidiaries of insurance undertaking situated in other third states having offices in Romania, including the information and the rights of insurance creditors.

ART.74
(1) The winding up proceeding regulated by the present law started against an insurance undertaking that buys an estate does not affect the seller guaranteed rights when the respective estate is situated within the territory of another member state other than the state in which the respective proceedings were opened at the moment of the opening of proceeding.
(2) The winding up proceeding started against an insurance undertaking that sells an estate, after its delivery, is not a reason for termination ab initio or rescinding the sell and does not prevent the buyer to take appropriation if the respective estate is not a reason of termination ab initio or rescinding or denying the sale and does not prevent the buyer to get the ownership if the respective estate, at the moment of opening the procedure, was situated within the territory of a member state other than that in which the proceedings were started.
(3) The provisions of the paragraphs (1) and (2) do not impede to and do not affect the actions for the voidness, voidability and/or enforceability as they are regulated in the Romania law.

ART.75
(1) The financial proceedings and that of the winding up as they are regulated by the present law does not prevent and affect the insurance creditors actions for their claims being set off against the insurance undertakings claims that are subject to these proceedings as per the law.
(2) The provisions of the article 74(3) apply accordingly.

ART.76
(1) Notwithstanding the provisions of the articles 9-11, the effect of opening a financial straightening or winding up, as appropriate on the rights and obligations of the participants in a regulated market are governed by the law of that respective market only.
(2) The dispositions of the paragraph (1) does not prevent the actions for the voidness, voidability and/or enforceability regulated by the law of Romania, which can be used to avoid keeping into consideration the payments or the transactions mad in accordance with the law governing the respective market.

ART 77
The present law dispositions is supplemented by the Law no.32/2000, with the subsequent amendments and supplementations, by the Law no. 136/1995, with the subsequent amendments and supplementations, by the Law no.105/1992 related to the conflicts of laws, by the Law no.637/2002 related to the conflict of laws in the matter of insolvency as well as by the Code of Civil Procedure.

ART.78
The present law takes over the provisions of the Directives 2001/CE related to the reorganization and the winding up of insurance undertakings with eh exception of the annex to the Directive.

ART.79
The present law enters into force at 30 days from its publisment date in the Official Gazette, Part I.

ART. 80
Upon entering into force following are abrogated:
a) Chapter VI “Straightening, reorganization and the winding up of insurance undertakings ”of the Law no.32/2000, with the subsequent amendments and supplementations, published in the Official Gazette of Romania, Part I, no.148 of 1oth April 2000;
b) The Order of the President of the Insurance Supervisory Commission no.12/2001 to enact the Regulations related to the insolvency of insurance undertaking and the special administrator, published in the Official Gazette of Romania, no.43 of 22nd January 2001;
c) The Order of the President of the Insurance Supervisory Commission no.14/2001 the enact the Regulations regarding the transferal of portfolio, published in the Official Gazette of Romania, Part I, no. 43 of 22nd January 2002;
d) The Order of the President of the Insurance Supervisory Commission no. 3/2002 to enact the Regulations regarding the set up, use and administration of the Assureds Protection Fund, published in the Official Gazette of Romania, Part I, no.327 of 16th May 2002;

ART.81
Within 60 days from the date of this law entering into force the Insurance Supervisory Commission will issue specific norms to apply the present law depositions.

This law was adopted by the Parliament of Romania in accordance with the provisions of the articles 75 and 76(2) of the Constitution of Romania.