Annual Report 2010 03 August 2011 - Banka Qendrore e ...

CBK
Annual Report 2010
Table 20. Liquidity ratio in insurance system in Kosovo
Description 2010
Liquid equities – cash/Total equities 63%
Total liquid equities (cash) / Technical reserve 130%
Total liquid equities (cash) / Total liabilities 107%
Investment income / Total income 6%
Non-TPL / Gross w ritten premiums 9%
Source: CBK 2011
The insurance system in general during 2010 resulted in sustainable liquidity indicators.
As indicated in the table above, liquid equities in cash in relation to technical reserves were
130 percent, while in relation to total liabilities they were 107 percent. Tightening of
liquidity during 2010 mainly resulted as a consequence of rapid growth trend of total
technical reserves compared to last year, and the implementation of the Manual on
calculation methodology of technical reserves issued by CBK.
c) Corrective actions
Corrective actions have been undertaken during 2010 against the insurance companies
depending on discrepancies/violations found out. In July 2010, CBK issued Orders against
the insurance companies on execution of payment of losses treated but not settled.
Because of issuance of compulsory motor liability insurance polices in violation with CBK
legal regulative, respectively Direction No.008/2004, fines in the amount of euro 38,000
have been imposed on insurance companies by CBK. In this context, CBK has also issued
written warnings to senior officers of the respective insurance companies.
During 2010, CBK issued Orders against insurance companies with purpose of fulfilling the
deficit found out through the relevant financial analyses. Then, based on direct
examinations performed on insurance companies, during 2010, CBK issued Orders against
the respective companies with purpose of improvement of situation pursuant to the legal
regulative. Also, with purpose of verification of adequacy of insurance system staff, during
2010, CBK issued communications and undertook corrective measures in case of
identification/confirmation by competent authorities on the inadequacy of respective
individuals.
d) International cooperation in the area of supervision
CBK in cooperation with the technical assistance provided by the relevant financial
international institutions, respectively the World Bank, Ministry of Economy and Finance
and the insurance industry prepared the draft law on compulsory motor liability insurance,
which draft law was forwarded to Kosovo Assembly for adoption. It is expected that this law
will consolidate and further advance the legal ground on compulsory insurance market.
Also, in cooperation with the technical assistance provided by the World Bank, CBK
initiated a project for Assessment of Core Insurance Principles, which project assesses 28
core insurance principles in total and provides a concrete Action Plan with purpose of
implementation of recommendations deriving from the assessment. This will certainly
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