On 8 December 2004, the Riigikogu adopted a new Insurance Activities Act.Once again, accession required the new law, as the regulation of insurance activity, insurance intermediation, and supervision thereof is covered by European Union directives. The new law creates a modern legal environment,with more precise and strict standards for establishment and operation of insurers and insurance intermediaries, and for ensuring trustworthiness. The law does not regulate insurance contracts as these are regulated through the Law of Obligations Act. The major changes in the new Insurance Activities Act are related to the regulation of owned funds of insurers, the transfer of insurance portfolios, a special regime for insurers, termination, insurance intermediation and supervision. There have been minor changes to the classes of insurance. Following European Union directives, the requirements have been raised for share capital and owned funds of insurers. A transition period up to 1 January 2007 has been set for raising share capital and bringing the minimum of owned funds into accordance with the law. The new law also modifies the requirements for the members of management boards and supervisory councils, as well as for the managers, including actuaries, which have been harmonised with the requirements of other laws governing the financial sector. The law no longer requires that an actuary be a member of the management board. Moreover, the statutes of the insurer need not go beyond those requirements set forth in the Commercial Code. The regulation of a qualifying holding as regards an insurer has been updated. There are new provisions in the law that oblige insurers to identify a client, in order to abide by the Money Laundering and Terrorist Financing Prevention Act. This allows the insurer to process personal data without the permission of their owners. Those insurers with a valid activity licence at the time the Act enters into force must bring their operations and documents into accordance with the new law within six months of its entering into force,1 January 2005.
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