New secondary legislation regulating insurance distribution in Romania
New secondary legislation for insurance distribution
The Romanian Financial Supervisory Authority (“FSA”) has recently approved Norm 19/2018 on insurance distribution (“Norm 19/2018”). The release of this new piece of legislation is the result of the FSA’s effort to pass secondary legislation to enable the application of Law 236/2018, which transposes the Insurance Distribution Directive into Romanian law.
Norm 19/ 2018 further details, clarifies and regulates aspects relevant for insurance distribution, including the following:
- The categories of primary and secondary intermediaries and the services these intermediaries may provide.
- The requirements for registration of intermediaries.
- The supervision and monitoring by the FSA of intermediaries’ activity.
- Specific requirements on registration, organization, and reporting of intermediaries as well as the requirement to inform customers.
- The merger and split-up process for insurance brokers.
- Provision of insurance distribution based on freedom of establishment or freedom of services.
- Provision of insurance-based investment products.
- The information needed for the assessment of a customer’s requirements and needs (i.e. demands and needs test), which is adapted based on the specific insurance products required by the potential customer.
Norm 19/2018 states that intermediaries may provide advice to the customer after the application of the demands and needs test and that intermediaries intending to manufacture insurance products in association with insurers must obtain prior approval from the FSA.
Norm 19/2018 has been enacted with the aim of bringing additional clarity to the insurance distribution industry in Romania and also to further promote and protect the rights of its customers.
As part of secondary insurance distribution legislation, the FSA has also released Regulation 12/2018 implementing specific provisions of EU Regulation 1286/2014 on key information documents for packaged retail insurance-based investment products. Our article on this topic is available here.
If you need more details about Norm 19/2018 or the legal framework applicable to insurance distribution in Romania, please contact us.
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