ORDER No. 3 of 5TH April 2002
to enact of the Norms regarding the set up, the use and the administration of the Insureds protection Fund.

ISSUER: THE INSURANCE SUPERVISING COMMISSION
PUBLISHED: THE OFFICIAL GAZETTE NO.327 OF 16TH May 2002

The President of the Insurance Supervising Commission,

Upon the provisions of the article 60 of the Law no.136/1995 regarding the insurances and reinsurances in Romania, of the article 4(27) and of the article 45(4) of the Law no.32/2000 regarding the insurance companies and the insurance supervision

According to the Decision of the Insurance Supervising Commission of the 5th April 2002 whereby the Norms regarding the set up, the use and the administration of the Insureds protection Fund.
Issues the following order:

Art.1.
The Norms regarding the set up, the use and the administration of the insureds protection Fund provided for in the annex of this order are hereby enacted.

Art.2.
The General secretariat of the Insurance Supervising Commission will ensure the present order be carried out.

The President of the Insurance Supervising Commission
Nicolae Eugen Crisan

ANNEX NO.1.

NORMS
regarding the set up, the use and the administration of the insureds protection Fund.

I. The drawing up of the Budget of income and expenses for the insureds protection Fund.

Art.1
The Insureds protection Fund is set up in accordance of the provisions of the article 60 of the law no.136/1995 regarding the insurances and reinsurance in Romania and of the present Norms.

Art.2.
According to the provisions of the article no.60 (2) of the Law no.136/1995 and the article 45(4) of the Law no.32/2000 regarding the insurance companies and the insurance supervision, the insureds protection Fund is set up and it is administrated by the Insurance Supervising Commission, which will annually establish the percentage share to be applied to the gross premiums volume collected from the direct insurance activity by the insurance companies and the insurance/reinsurance companies. This quote is provided for in the State budget law.

Art.3.
The budget of income and expenses is drawn up according to the provisions of the articles 7 and 10 of the Law no. 72/1996 regarding the public finances.

II. The execution of the Insureds protection Fund.

A. The collection of the income of the insureds protection Fund

Art.4
(1) The insurance and insurance - reinsurance companies are obliged to transfer the sums due to the insureds protection Fund monthly up to the 25th of the current month on account of the expired month. The calculation and the transfer of the sums due for the current year will be made by the insurers as follows: total gross insurance premiums collected from direct insurance activity to which a sampling quota is applied to obtain the sum due to the insureds protection Fund.
(2) The insurance and the insurance-reinsurance companies transfer the sums established according to the state budget law in the account no.301714045240" Availability of the insureds protection Fund" opened with the Bucharest Treasury by the Insurance Supervising Commission.
(3) The interests to the availabilities of the insureds protection Fund will be used as an income source for this Fund for the payment of the insurance indemnities and the sums insured in case of the insurers liquidation.

Art.5
(1) For the delay in transferring the sums designated to the insureds protection Fund, interests will be calculated according to the rules in force regarding the delayed transfer of the sums due to the state budget.
(2) The interests calculated in conformity with the provisions of the Norms regarding the set up the use and the administration of the insureds protection special Fund, approved by the Order of the Ministry of Finance no.1998/1996, will be transferred in the respective account of the insureds protection Fund, with separate identifying on the payment order.
(3) The check up on the observation of the legal provisions regulating the transfer of sums and the interest for delay in transfer will be made by the Insurance Supervising Commission.

Art.6
The set up of the Insureds protection Fund will be evidenced in the insurers accounting books by the debit of the account no.643" Expenses for other taxes and fees assimilated transfers", distinct analytic, by credit of the account no.443 "Special Funds regarding the insurance activity" distinct analytic.

Art.7
The insurers have the possibility to make settlements and sets-off of the sums transferred, upon evidences, with prior approval of the Insurance Supervising Commission.

B. The using of the insureds protection Fund

Art.8
(1) The insureds protection Fund is administrated by the Insurance Supervising Commission as main credits chief accountant.
(2) The insureds protection Fund is designated to payments of insurance indemnities and sums insured in case of the liquidation of the insurance and insurance -reinsurance companies in conditions set out by the article 32 of the Law no. 32/2000.
(3) The insurers in the position provided for in the paragraph 2 will effect the payment of the insurance indemnities and the sums insured from the reserves funds, as well as from those obtained as a result of selling of insurer's assets, up to exhaustion, observing the priorities provided for in the art.32 of the Law no. 32/2000 and of the law no.64/1995 regarding the proceedings of judiciary liquidation and the bankruptcy, republished, with the subsequent alterations and following other legal provisions in force.
(4) In the case the above funds are not sufficient, after the bankruptcy proceedings has been closed, according to the law, the payments out of Fund will be effected only within the limits of availabilities of the insureds protection Fund, administrated by the Insurance Supervising Commission and only to the direct insureds.
(5) Every payment of the insureds protection Fund, effected as per the above provisions represents:
a) up to 100% of the due indemnity for the endowment life insurance contracts that expire in the year in which the insurer's bankruptcy proceeding was started;
b) up to 100% of the redemption sum for the life insurance contracts calculated from the beginning of the bankruptcy proceeding, if this is provided for in the insurance conditions.
c) up to 100% of the account value of the life insurance contract for the insurances provided for under point III .1. c of the Insurance Supervising Commission Norms no.3/2001 regarding the classes of insurance that may be sold by the insurance companies , in the case the insurer's bankruptcy proceeding started before the contract expired.
d) up to 70% of the indemnity due in the case of the life insurance contracts covering the risk of death, provided for under point III.1.c and under point III.4 of the Insurance Supervising Commission 's Norms no.3/2001, in case the death occurred during the validity of the policies, but not later the insurer's bankruptcy proceeding starting moment.
e) up to 70% of the insurance indemnity due in the case of life insurance contracts provided for under point III.1.c and III.4. of the Insurance Supervising Commission's Norms no.3/2001, in the case of the risks occurred during the policies validity but not later than the insurer's bankruptcy proceeding starting moment.
f) up to 50% of the insurance indemnity due for all other insurance classes, with the exceptions of those under point IV.14. and IV.15 of the Insurance Supervising Commission's Norms no.3/2001, for the risks occurred during the policies validity but not later than the insurer's bankruptcy proceeding starting moment.
g) up to 25% of the insurance indemnity due for the policies afferent to the insurance classes provided for under point IV.14 and IV.15 of the Insurance Supervising Commission's Norms no.3/2001, for the risks occurred during the policies validity but not later than the insurer's bankruptcy proceeding starting moment.

Art.9
The time limit available for the insureds to make a claim in writing to the Insurance Supervising Commission is maximum 30 days from the date the insurer's bankruptcy proceeding was closed by order of the court having the jurisdiction over it.

Art.10.
The claims for indemnity from the insureds protection Fund will be examined and approved by a specially set up commission appointed by the order of the President of the Insurance Supervising Commission, having the following authorities:
a) a member of the Council of Insurance Supervising Commission having the authority of a president, having the power of delegating it to the Secretary General of the Insurance Supervising Commission;
b) a representative of the Legal General Management of the Insurance Supervising Commission;
c) a representative of the Logistic General Management of the Insurance Supervising Commission;
d) a representative of a technical department of the Insurance Supervising Commission;
e) a representative of the Ministry of Public Finances from the territorial unit where the insurer's head office, according to the Norms regarding the set up, the use and the administration of the special insureds protection Fund, approved by the Order of the Minister of Finance no.1998/1996;
f) 2 representatives of the National Union of Insurance and Reinsurance Companies of Romania.

Art.11
(1)The commission specially set up will meet at the dates decided by its president, at the head office of the Insurance Supervising Commission and will take valid decisions upon simple majority votes (half +1) whilst at least 5 members are present, including the president.
(2) The evidences grounding the claim upon which the decision approving the payment out of the insurer's protection Fund will be taken will enclose all the documents attesting the insurance event occurrence and supply all the necessary elements to establish the amount to be paid.
(3) This specially set up commission may ask the presentation of any other documents that are considered necessary for the grounds of the decision to approve the payments out of the insureds protection Fund.
(4) The payments out of the insureds protection Fund will be effected in the order of the approval of the files examined by the commission specially set up, by money order or by bank transfer within 10 working days from the date of the approval, from the feed of the insureds protection Fund respectively for the cases provided for in the article 12.

Art.12
If the existing availabilities in the insureds protection Fund is not sufficient to effect the payments approved by the commission specially set up, these will be honored as soon as the insureds protection Fund is fed with financial sources provided for in the article 2, taking into account the bank usages for money circulation, without exceeding to financial tax years from the date of the approval.

III. Reporting on and the account booking of the execution of the insureds protection Fund.

Art.13.
(1) Collecting of money and payment operations from the insureds protection Fund is evidenced by the Insurance Supervising Commission as a main credits chief account in distinct accounts, according to the accounting plan for the public institutions.
(2) The accounting evidence of the availabilities and the expenses in the insureds protection Fund's account is made by using the specific accounts for the special funds, namely:
149"Availabilities in the insureds protection Fund"
349"The insureds protection Fund"
449" Expenses in the insureds protection Fund.

Art.14.
The availabilities in the insureds protection Fund that were not used at the end of the financial year are turned over for the next year with the same designation according with the law.

IV. Final dispositions

Art.15
The availabilities in the insureds protection Fund in the Treasury account are interests carrying to be set up as income to the insureds protection Fund having the same designation.

Art.16
The insurers will report monthly to the Insurance Supervising Commission the payment of the contribution into the insureds protection Fund, in the form and at the dates provided for in the Insurance Supervising Commission Norms approved by the Order no.13/2001.

Art.17
The administration, management and the use of the insureds protection Fund will be made though Insurance Supervising Insurance in accordance with the laws in force.

Art.18.
The insureds protection Fund's execution account will be published in the annual information report of the Insurance Supervising Account according with the provisions of the article 7 of the Law no.32/2000.

Translation made by Mihaela Tudor - UNSAR legal adviser