Development of statutory regulation for insurance supervision after reestablishment of independence of the Republic of Lithuania (1990–2007)
##plugins.themes.bootstrap3.article.main##
Abstract
The insurance market cannot function efficiently if there are no conditions for it, namely, if statutory regulation complying with the expectations of the society and the efficient supervision of the insurance market are absent. The necessity for statutory regulation of insurance activity and its supervision arises from the need to have an efficient, secure, fair, and stable insurance market that would ensure conditions for the development of the market and motivate competition. Yet the absence of this need should not shade the key aim of insurance supervision-to protect economic and social security of the participants of the insurance market in whose interests this market operates.
Insurance supervisory activity is understood as an administrative supervisory activity of the insurance market carried out by the authorised state organisations. The activity aims to ensure the protection of the rights and interests of the customers receiving insurance services and the reliability, efficiency, security, and stability of the insurance system itself.
After reestablishment of independence of the Republic of Lithuania, the private sector has been rapidly developing. One of the key prerequisites for the efficient development of the private sector is the accessibility of essential insurance services. Consequently, as early as 1990 the first Law on Insurance was adopted that legitimised the basis for private insurance activity and its supervision. This law was followed by two more laws, therefore, statutory regulation of supervision of insurance activity can be divided into three stages, each of which can be related to the Law on Insurance valid at a particular period.
Even though during the period of the independent state of Lithuania statutory regulation of supervision of insurance activity has been changing and improving, shortcomings of regulation have not been avoided. Protection of the participants of the insurance market has not been sufficient; necessary conditions for the development of the market and promotion of competition have been absent. As a result, during this period the discontent of society has been observed because of insufficient protection of their interests. Insolvency of some insurance companies and bankruptcies has not been avoided either. Due to insufficient and obscure statutory regulation, preventive measures to secure the interests of the consumers have not always been taken in time. This statutory regulation has not complied with the provisions of Article 46 Paragraph 3 of the Constitution of the Republic of Lithuania that “The State shall regulate economic activity so that it serves the general welfare of the people.”
Insurance supervisory activity is understood as an administrative supervisory activity of the insurance market carried out by the authorised state organisations. The activity aims to ensure the protection of the rights and interests of the customers receiving insurance services and the reliability, efficiency, security, and stability of the insurance system itself.
After reestablishment of independence of the Republic of Lithuania, the private sector has been rapidly developing. One of the key prerequisites for the efficient development of the private sector is the accessibility of essential insurance services. Consequently, as early as 1990 the first Law on Insurance was adopted that legitimised the basis for private insurance activity and its supervision. This law was followed by two more laws, therefore, statutory regulation of supervision of insurance activity can be divided into three stages, each of which can be related to the Law on Insurance valid at a particular period.
Even though during the period of the independent state of Lithuania statutory regulation of supervision of insurance activity has been changing and improving, shortcomings of regulation have not been avoided. Protection of the participants of the insurance market has not been sufficient; necessary conditions for the development of the market and promotion of competition have been absent. As a result, during this period the discontent of society has been observed because of insufficient protection of their interests. Insolvency of some insurance companies and bankruptcies has not been avoided either. Due to insufficient and obscure statutory regulation, preventive measures to secure the interests of the consumers have not always been taken in time. This statutory regulation has not complied with the provisions of Article 46 Paragraph 3 of the Constitution of the Republic of Lithuania that “The State shall regulate economic activity so that it serves the general welfare of the people.”
##plugins.themes.bootstrap3.article.details##
Section
Articles
Authors contributing to Jurisprudence agree to publish their articles under a Creative Commons Attribution-NoDerivatives 4.0 International Public (CC BY-NC-ND) License, allowing third parties to share their work (copy, distribute, transmit) and to adapt it, under the condition that the authors are given credit, and that in the event of reuse or distribution, the terms of this licence are made clear.
Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.
Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.
