The first law safeguards the proper functioning and stability of the insurance market, following the UK's withdrawal from the European Union (EU), as well as the protection of beneficiaries under insurance contracts.
Following the UK's withdrawal from the EU, a legal loophole arose in the operation of UK insurance companies operating in the Republic of Cyprus under the freedom to provide services, due to the failure to include provision for insurance and financial sector coverage in the UK's withdrawal agreement from the EU.
The proposed regulations ensure the uninterrupted service to the customers of the companies in question, the fulfilment of existing obligations, as well as the management of the paper
The second law, passed unanimously, aims to improve the procedure for winding up an insurance company in the event of the withdrawal of an insurance licence.
Specifically, it is clarified that the revocation of an insurance business license by the Superintendent of Insurance, if the business does not make use of its license within twelve months or expressly renounces the license or ceases to carry on business for a period of more than six months, does not result in the forced dissolution and liquidation of the insurance business.
Further that where an insurance undertaking carries on business and the licence held by it to carry on such business is revoked, then this shall result in the compulsory dissolution and winding up of the undertaking by the court.
Finally that the provisions of the basic law providing for the transfer of portfolio shall not apply in the case of revocation of a licence to carry on insurance business.
Source: KYPE
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