The FAA has made public that according to its annual report, premiums are far from international standards.
In the next 5 years, insurance companies should assure an insurance fund of about 3 million euros. Law changes made to this sector are based on directives related to the Stabilization and Association Pact made with the European Union.
The insurance trade shows a low and unbalanced relation of premiums paid to who has insurance, compared to international standards. This report comes from the Financial Auditing Authority (FAA), which has been monitoring for more than a year the selling of insurance, bonds and private pension companies. The Report on premiums trade shows levels as low as 35 percent, quite far from the minimal international standards of 50 percent. The annual report states that increasing the level of paid premiums is one of the major priorities of the Financial Auditing Authority.
The insurance fund for the next five 5 years, 3 million euros.
In order to respect the committments coming from the Stabilization and Association Pact, the FAA has made public that during 2006, important changes to Law 9267, 29.07.2004 on ” Insurance, reinsurance and intermediation between the two activities” have been prepared, which reflects a very important aspect of the EU directives related to insurance funding for insurance companies. These changes consist of the amendment of paragraph 98 of this law,which concerns the increase of the insurance fund of up to 3 million euros. This process is expected to be completed in three phases in the future.
Premiums have increased up to 42.5% in 6 months.
The Financial Auditing Authority stated that as far as the first part of the year is concerned, insurance companies have made one of the largest prime increases of the last years. Between Jannuary and June, premium incomes have increased 809,902 Albanian leks, coming to 42.48 percent, compared to the same period in 2006. The total premiums volume of the period, between Jannuary and June 2007, was 2,716,513 Albanian leks, while the premium in the same period in 2006 was 1,906,611.
Paid premiums
From Jannuary through June 2007, premiums paid from the insurance companies have been 777,002 leks. In the same period of 2006 they have had the vuale of 667,160 leks, which means that they have increased by 16.46 percent. Among the different types of insurance, still the major part of paid premiums concerns the mandatory/compulsory insurance. According to the report, during the first semester of 2007 paid premiums for non-life insurance have been valued at 747,470 leks, meanwhile in the same period in 2006 they have been 659,537 thousands leks, which shows an increaseme of 13.33 percent.
