Croatia proposes new insurance sector laws and resolution framework

The Croatian Ministry of Finance has introduced legislative proposals to reform the insurance sector and align national regulations with European Union standards. The initiative includes amendments to the Insurance Act and the introduction of a brand-new Law on the Resolution of Insurance and Reinsurance Companies.

State Secretary Matej Bule announced that the new resolution framework is designed to handle companies facing imminent failure, mirroring the recovery and resolution systems used in the banking sector. A primary goal is to ensure that such resolutions occur with minimal cost to taxpayers. The reforms incorporate provisions from the EU’s ‘Solvency II’ and ‘IRRD’ directives, emphasizing the principle of proportionality, which allows regulatory obligations to be scaled based on a company’s size and systemic importance.

Additional changes involve strengthening climate risk monitoring, introducing macroprudential tools, and establishing preventive recovery plans for companies in distress. The proposals also address the operational functioning of the Croatian Insurance Supervisory Office (HUO) to resolve existing normative ambiguities.