Insurance laws Liechtenstein
Liechtenstein's insurance sector operates under a comprehensive legal and regulatory framework, ensuring market stability, consumer protection, and alignment with international standards.๎
๐ Key Legislation
Insurance Supervision Act (Versicherungsaufsichtsgesetz โ VersAG)
This foundational law governs the supervision of insurance undertakings in Liechtenstein. It outlines licensing requirements, capital adequacy, governance structures, and operational standards for insurance companies.
Insurance Contract Act (Versicherungsvertragsgesetz โ VVG)
The VVG regulates the contractual relationships between insurers and policyholders, covering aspects such as policy formation, rights and obligations of parties, and dispute resolution mechanisms.
International Insurance Contract Act (IICA)
This act addresses cross-border insurance contracts, ensuring that international agreements comply with Liechtenstein's legal standards.
Buildings Insurance Act (BIA)
The BIA mandates compulsory insurance for buildings, specifying coverage requirements and conditions.
Insurance Distribution Act (Versicherungsvertriebsgesetz โ VersVertG)
This act governs the activities of insurance intermediaries, including agents and brokers, ensuring transparency and protecting consumer interests.
Insurance Distribution Ordinance (Versicherungsvertriebsverordnung โ VersVertV)
Accompanying the VersVertG, this ordinance provides detailed regulations on the conduct and responsibilities of insurance distributors.
๐๏ธ Regulatory Authority
The Financial Market Authority (FMA) is the primary regulatory body overseeing the insurance sector in Liechtenstei. Its responsibilities include:
Issuing and revoking licenses for insurance undertakings and intermediarie.๎๎
Monitoring compliance with legal and regulatory requirement.
Ensuring the protection of policyholders and maintaining market integrit.
Facilitating cross-border operations within the European Economic Area (EEA) and Switzerlan.
๐ผ Licensing and Capital Requirement
*Insurance Undertakings: Companies must obtain a separate license for each insurance class they intend to operae ๎Minimum capital requirements vary based on the type of insurane:
*Life Insurance: Fully paid-in minimum capital of CHF 5 millin.
*Reinsurance: ranging from CHF 5 million to CHF 10 millin.
*Indemnity Insurance:๎Between CHF 0.5 million and CHF 1 million per insurance clas.
*Reinsurance Captives: Fully paid-in capital of CHF 1.6 millin. Additionally, an organization fund amounting to 20% to 50% of the necessary minimum capital is required upon commencing business operatios.
*Insurance Intermediaries: Agents and brokers must obtain a license from the FA The licensing process includs:
Verification of professional qualifications and personal integriy.
Proof of professional indemnity insurane.
Compliance with ongoing training and reporting requiremens.
๐ Ongoing Supervisin
The FMA conducts regular inspections and monitors the activities of insurance undertakings and intermediaries to ensure continuous compliance with legal and regulatory standad.
Reviewing annual reports and financial statemets.
Assessing governance structures and risk management practies.
Investigating complaints and addressing grievanes.
Imposing sanctions or withdrawing licenses in cases of non-compliace.
๐ Cross-Border Operatins Liechtenstein's membership in the European Economic Area (EEA) allows insurance companies and intermediaries licensed by the FMA to operate across EEA member states and Switzerland under the principles of mutual recognition and home-country conrl. This facilitates the provision of insurance services throughout the reion.
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