The insurance sector in Kosovo, since the beginning of its activity, has faced problems, unsatisfactory performance, as well as non-compliance with regulatory requirements provided by applicable law to some insurers.
Among other things, such a situation is influenced by several factors such as the application of gross tax on written premium or turnover tax of 5 percent, the liability of the insurance sector for contribution to the Red Cross with 1 percent of gross premiums, as well as damages caused by uninsured vehicles circulating in the territory of the Republic of Kosovo
While the issue of turnover tax and Red Cross contribution has been addressed, uninsured vehicles continue to be a concern for the insurance sector.
Given the stagnation of this sector, in recent years, the CBK has undertaken a series of measures and reforms in order for the insurance sector to ensure compliance with the applicable legal framework.
For this purpose, in recent years, the CBK has taken dozens of administrative measures against insurers, including the revocation of two licenses. As a result of these measures taken, over the last three years the shareholders of some of the insurers have injected capital worth over 16 million Euros.
Consequently, we inform you that as of March 31, 2022, all insurers exercising insurance activity in the country, are in compliance with the legal requirements of the CBK.
Given the fact that the insurance sector in Kosovo is fully capitalized and in accordance with applicable legal requirements, the CBK in cooperation with the World Bank are taking final steps to liberalize the auto liability product market. As of April 4, 2022, the CBK is hosting the World Bank experts who will design the new risk-based premium model and guide for solvency 2.