Sergiu Puscuta: Moldovan insurance market needs facilitation of procedures

Sergiu Puscuta

Infotag’s interview with Chair of the Insurers’ Union of Moldova, Sergiu Puscuta.

Lately, the Insurers’ Union of Moldova began to actively operate, protecting interests of own members and promoting insurance development in the country. Now many members the Union numbers to date?

To date, 8 largest insurance companies are members of the Insurers’ Union of Moldova: Moldasig, Asito, Moldcargo, DonarisGroup, Moldova-Astrovaz, Grawe-Carat, Victoria Asigurari and Klassika Asigurari. The aggregate share of all Union members at the Moldovan insurance market reaches about 80%. The number speaks for itself. Though not all companies are members of the Union, the market leaders are included in it.

Does membership in the Union presuppose payments and what is their amount?

Monthly fee per every member is 5 thousand lei. Besides, according to the charter approved by all members, there is also established an entrance fee at the amount of 12 thousand lei. You must admit that these are small sums, taking into consideration that one needs funds to keep the Insurers’ Union machinery, for paying office rent and current expenses of the association. In whole, current expenses on keeping the Union’s executive body do not exceed 40 thousand lei per month.

What covers the Union’s agenda for the near future?

For a more efficient work of the Union, its general meeting adopted a plan of actions for 2011, which includes over 20 provisions. Main of them is explanation of the necessity to make a number of amendments to the legislation. Namely, we would like to attain compulsory health and compulsory insurance of housing estate against natural calamities via insurance companies. Also we want to achieve amendments to the legislation that would facilitate the insurance procedure, namely sale of insurance products directly from bank offices.

What do insurance companies think about forthcoming increase of authorized capital and whether they are ready for that?

According to the law on insurance, it is projected a gradual increase of authorized capital. In April 2011, the minimum capital level (for insurance companies) reached 12 million lei; the sum will be increased to 15 million by next-year April. Thus, 21 companies operate at the insurance market of Moldova. They all observe the insurance law, namely the law on authorized capital. In my opinion, the condition in this respect will remain unchanged in April 2012 too – insurance companies will meet their commitments.

One needs to solve the question on who will exercise supervision over insurance, leasing and financial companies before autumn. Who can undertake these controlling functions: the National Commission of Financial Market or the National Bank?

Conversations on the matter are held yet not for the 1st year. International practice shows that both systems have right to existence. In Moldovan actual, in my opinion, the existent control system is quite efficient and must be preserved. According to documents that were adopted by the Parliament for a medium term, the National Commission of Financial Market will preserve its prerogative of supervision over all financial organizations, except the banking sector.

How can you explain a small amount of agricultural risk insurance? In your opinion, what could considerably increase the insurance amount?

I think that not very favorable traditions for the agricultural sector are established in Moldova. People who worked in sovkhozes [state farms] and kolkhozes, now go in for agriculture in the private sector and their mentality mostly did not change. Many farmers, entrepreneurs continue relying on the state, though they operate in the private business for a long time. Over 20 years of Moldova existence, the state favored development of these dependent moods itself. Authorities try to rush to different natural disaster victims’ help. On the one part, it is correct, one needs to help. But on the other hand, the situation repeats almost every year, but no one draws conclusions and does not realize the insurance necessity. Unfortunately, representatives, of the agrarian sector continue thinking that risk insurance is not a first-necessity expense. And they are sadly mistaken, bearing losses due to it.

According to the legislation, 40% of insurance price in the agricultural sector is subsidized by the state. But subsidies do not always reach its recipient due to limited financing amount from the budget. If the budget for respective year would provide increase of subsidies for this goal, it could promote insurance development in the sector.

Whether it is projected for the near future to expand the list of companies that will have the right to issue Green Cards [mandatory motor third-party liability insurance of vehicle owners traveling outside the country by their own car?

Presently, 6 companies are authorized to issue Green Cards. They all are members of the Insurers’ Union of Moldova. Only over 2010, other 2 companies became issuers of Green Cards. Concerning the rest of them, there are a lot of interested [companies], but not everyone is able to adopt and meet tough financial requirements. As far as I know, to date, one has to consider an application on issuing authorization for going in for this type of insurance.

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