More Strict Regulation of Insurance Activities

On 8 December 2004, the Riigikogu adopted a new Insurance Activities Act.Once again, accession required the new law, as the regulation of insurance activity, insurance intermediation, and supervision thereof is covered by European Union directives. The new law creates a modern legal environment,with more precise and strict standards for establishment and operation of insurers and insurance intermediaries, and for ensuring trustworthiness. The law does not regulate insurance contracts as these are regulated through the Law of Obligations Act. The major changes in the new Insurance Activities Act are related to the regulation of owned funds of insurers, the transfer of insurance portfolios, a special regime for insurers, termination, insurance intermediation and supervision. There have been minor changes to the classes of insurance. Following European Union directives, the requirements have been raised for share capital and owned funds of insurers. A transition period up to 1 January