Insurance Agencies Better Prepared For EU Integration

The project “EU Support for Sustainable Capacity Building of the Insurance Agency of BiH and the FBiH and RS Insurance Supervisory Agencies” held its closing ceremony on the 18th April 2012, in the premises of the Parliamentary Assembly of Bosnia and Herzegovina in Sarajevo.

The results of this two-year long twinning project, which started in April 2010, were presented at the ceremony. The project was funded by the European Union from the Instrument for Pre-accession Assistance (IPA 2007) in the amount of € 800,000 and implemented by the Bulgarian Financial Supervision Commission. The aim of the project was to provide a wide range of support, advice and training to the BiH Insurance Agency and the FBiH and RS Insurance Supervisory Agencies, in order to approximate BiH’s insurance regulations and the supervisory practices to the ones applied on the Common market of the European Union.

The project represent a third phase of the EU assistance to BiH’s insurance sector – overall  about 2.5 million EUR have been invested in this sector in the past ten years. However, as stressed by the Deputy Head of the EU Delegation to BiH, Renzo Daviddi, achievements in this sector do not correspond to this very sizeable amount of resources invested by the European taxpayers.

Renzo Daviddi said: “The overarching goal of this project was to assist development of a single insurance market in Bosnia and Herzegovina. Yet, the insurance market in this country remains fragmented along entity lines. A market of less than 4 million inhabitants – further reduced by the inability of companies to offer services for the country as a whole, with reduced competition, and ultimately obstacle for business and consumers in accessing the better quality and range of financial services.  BiH is still far from achieving significant results in terms of approximation with EU standards which call for effective and uniform enforcement of single and more sophisticated rules on the entire European market for the benefit of the consumers and ensuring higher level of financial stability. Bosnia and Herzegovina and its insurance sector will also need to address these challenges. I believe it is crucial to establish a single insurance market which will promote economic efficiency and which will be prepared for the future integration on the EU insurance market.  In this respect I expect that project results would be used in practice, including the extensive advice for transposition of up-to-date European legislation in the area of insurance and insurance supervision.”

Three beneficiary agencies have gained through this project capacity to: 

  • Prepare draft legislative acts for full harmonisation with the European legislation in the area of insurance undertakings and the supervision thereof and in the area of the obligatory motor third party liability insurance,
  • Develop risk based supervision of the insurance undertakings and to enable effective flow and aggregation of statistical information about the insurance market in Bosnia and Herzegovina;

As a medium term perspective, if all the draft legal acts and supervisory procedures are implemented by the administration of Bosnia and Herzegovina this will create better business environment for the insurance sector, increased competition, protection of customers and better conditions for foreign investments and smooth accession of BiH insurance sector to the Common EU Market of services.