Based on the competences and responsibilities of the Central Bank of the Republic of Kosovo provided for in the Article 36 and 67 of the Law on CBK, and pursuant to the Article 16, Article 99, Article 100 and Article 124 of the Law on Insurances, in the meeting held on 26 April 2019, the CBK Executive Board decided to revoke the Licence no. 003, dated 25 March 2002, of the Insurance Company “Insig” J.S.C., Kosovo Branch, issued by the Banking and Payment Authority of Kosovo (BPK), legal predecessor of the CBK.
Insurance Company “Insig” J.S.C., Kosovo Branch, faced financial difficulties in fulfilling the legal requirements of the CBK with regards to the capital adequacy and solvency.
In view of improving the financial situation and fulfilling the legal and regulatory requirements, the Central Bank of the Republic of Kosovo, namely the CBK Executive Board, in compliance with the applicable legislation, has continuously made efforts to solve financial problems of the Insurance Company “Insig” J.S.C., Kosovo Branch.
However, despite the readiness and efforts of the CBK, the Board and Management of the Insurance Company did not manage to fulfil the legal requirements and improve the financial situation of the company.
At the same time, the shareholder of the Insurance Company “Insig”, Kosovo Branch, did not respond to the requests of the CBK for capital increase and complying with the applicable legal requirements.
Lack of readiness of the shareholder to fulfil the capital requirements has posed a serious risk to the company’s capacities to fulfil the obligations to the insured and other creditors.
Therefore, in order to protect the policyholders and to prevent the increase of adverse impact on the insurance market and financial system in general, the CBK, based on the duties and responsibilities deriving from the Law on the CBK and Law on Insurances, decided to revoke the licence of the company.
The CBK initiated the forced liquidation procedures, pursuant to the Chapter 18 of the Law No. 05/L-045 on Insurances, by appointing the liquidator, which will lead the Insurance Company “Insig” under liquidation and will provide fair and equal treatment, always in compliance with the legal requirements in force, for all creditors. Upon the appointment of the liquidator, all responsibilities of the Administrator, Steering Board and Management of the Company in relation to the company management shall cease.
The liquidator will review all claims, firstly of the policyholders and other creditors. The liquidator will report to the CBK on monthly basis with regards to the progress of fulfilment of obligations to creditors. At the same time, the liquidator will inform in more details all creditors and other interested parties with regards to the manner of communication and will provide the telephone, email contact details and the location for submitting all claims by policyholders and other creditors.
The Central Bank of the Republic of Kosovo instructs all policyholders and other creditors to follow notifications made by the Liquidator and the CBK in the coming days with regards to the processing of their claims in relation to the Insurance Company “Insig” under liquidation.
The CBK, in compliance with the duties and responsibilities set out in the Law on the Central Bank of the Republic of Kosovo and other relevant laws governing the activity of financial institutions, will continue its activities to ensure the full compliance of the activity of financial institutions with the requirements set out in the applicable laws and regulations. Maintaining of financial institutions ability to fulfil financial obligations is of crucial importance to maintain the financial stability in the country, which at the same time represents the primary objective of the CBK.
Therefore, in order to maintain the financial stability and protect the financial services users, the CBK remains committed to make use of all legal opportunities to ensure the progress of financial system activity in the country, providing the country economy with a financial system in view of the macroeconomic development and stability, as well as a system that provides security for all financial services users.
Revocation of the licence of the Insurance Company “Insig” does not pose risk to the sustainability of insurance sector in Kosovo. Since the beginning of operation, Kosovo financial system has seen a sustainable development and served as an important source of macroeconomic stability in the country.
Recent years have seen an acceleration of activity increase in almost all financial system components, while the performance and sustainability indicators marked further improvement. The activity of the insurance sector is increasing, while the regulatory and supervisory measures taken by the CBK resulted in a positive financial performance of this sector, after a long period of loss.
Therefore, we commit to take all measures provided for by the Law to ensure that in our market operate only financial institutions that are able to contribute to the further development of the financial system and economy of the country, as well as to contribute to further strengthening of the financial stability.