Risk management trainings support smooth transition to new insurance regulatory framework
Risk management trainings, organized with the FSTA’s support, will help local insurance/reinsurance companies to comply with the new legal provisions. This will help strengthen the insurance sector and ensure the stability of the financial market. The insurance companies’ representatives benefit from trainings led by international experts, contracted by FSTA to present the best practices in this sector.
A new insurance law will likely regulate Moldova’s insurance sector soon. The draft law was already adopted in the first reading. It partially transposes the EU’s Solvency II Directive, thus radically changing the philosophy of the supervisory activities in this area, by implementing new prudential, corporate governance, and risk management requirements.
The law aims to create a new legal framework for crisis management by introducing measures and tools designed to intervene early enough in case of a non-viable insurer or one insurer about to face difficulties. Thus, setting up risk management officers as a key position in every insurance company is among the main amendments. However, the field is relatively new for insurance companies, which, according to the new law, will have to set up risk management systems and positions.
To support these efforts, the USAID FSTA has developed a training program, which was conducted by well-known experts with extensive experience in the field.
The first training cycle was organized in partnership with the NCFM. The trainings took place on November 23 and 25, 2020, with the participation of representatives from six insurance companies. The participants have shown increased interest in topics addressed, with FSTA subsequently receiving requests to organize further trainings and even a full-fledged program for certifying risk managers.
Ion Mazilu, one of the training participants, says the program helped him to improve his knowledge and skills. “Even if the legislator gives us a two-year period to bring all internal procedures into line, risk management is an area that is yet to be developed and explored. That is why, these trainings offered me the opportunity to learn from the best practices of other countries and to find out about the recommendations of the experts who have gained an impressive experience in this field”, Ion Mazilu pointed out.
The new regulations will enter into force 12 months after adoption and publication, and within another 12 months, the supervisory authority has to develop the secondary legal framework. “The shift to the new regulatory framework is a complex process, which also involves the training of supervised entities. Therefore, we enjoy the support provided by the FSTA, which organizes these trainings at the highest standards, by inviting the best specialists in the field and addressing the most current topics”, declared Tatiana Ciobanu, the Director of Insurance Department at the NCFM. “We rely heavily on FSTA to support other activities related to the implementation of the new regulatory framework” added Tatiana Ciobanu.
The conclusions of the training were unanimous – an effective risk management system helps to maintain a high and stable level of solvency, increasing as well the sector’s attractiveness for new investments.
The training sessions are the beginning of a series of activities that FSTA experts are to organize to support insurance companies’ efforts to comply with the provisions of the new law on insurance and reinsurance activity.