Dictionary of Insurance Terms

Insurance activity – activity that mainly consists in offering, negotiating and concluding insurance and reinsurance contracts, collecting premiums, repairing damages, carrying out recourse and recovery actions;

Insurance and/or reinsurance mediation – activity that consist in presenting or offering insurance and/or reinsurance contracts, other preparatory activities for conclusion of such contracts, their conclusion, or assistance in contract management, especially in case of claims for damages.

Actuary – an independent or employed specialist with statistical, mathematical or economic studies, holder of a qualification certificate issued by the Supervising Authority in compliance with a regulation approved by it, whose responsibility is to calculate insurance premiums, technical reserves, dividends to the insured, beneficiaries of insurance services, death rate charts, and other responsibilities stipulated by this Law;

Majority shareholder – individual or legal person who directly and solely or through other individuals or legal persons or jointly with them in a coordinated way exercises rights relating to shares that make up at least 10% of voting shares of the Insurer (Reinsurer);

Insurance agent – individual or legal person carrying out professional activity under a mandate provided by the insurer, entitled to conclude, on behalf and at the expense of the insurer, insurance contracts with third parties as stipulated in the contract of mandate, without having the capacity of an insurer, reinsurer or insurance and/or reinsurance broker;

Insurance – transfer from the insured to the insurer of an eventual risk, including the risk of a financial loss and/or material damage, according to the insurance contract;

Mandatory Auto Insurance – insurance contract confirmed by the MTPL and/or Green Card insurance policy, which enables an authorized insurer to provide under this Law mandatory automobile liability insurance and undertakes to indemnify, at the account of a premium paid by the insured, damage caused by the car accident occurred during the insurance contract validity;

Insured – the person who has signed an insurance contract with the insurer;

Insurer (reinsurer) – legal person incorporated in the Republic of Moldova, entitled under this Law to carry out insurance (reinsurance) activity;

Brokerage assistant – individual or legal person authorized by a power of attorney to carry out, under a contract with an insurance and/or reinsurance broker and under professional liability insurance coverage of this broker, certain activities necessary for fulfillment of the brokerage mandate;

Supervising authority – central public authority whose duties include supervision and regulation of the insurance activity under applicable legislation;

National Automobile Insurers Bureau – national bureau of the Republic of Moldova incorporated under the Law on Insurance No. 407-XVI of 21 December 2006;

Insurance and/or reinsurance broker – legal person incorporated in the Republic of Moldova, entitled under this Law to negotiate for its individual or legal person clients, insured (reinsured) or potential insured (reinsured), conclusion of insurance (reinsurance) contracts and provide assistance during execution of these contracts or in connection with damage repairing, as the case may be;

Insurance event – insured risk stipulated by the insurance contract, whose occurrence entitles the insured to be indemnified by the insurer;

Coinsurance – operation through which two or more insurers underwrite the same risk, each assuming a share of it;

Council of International Green Card Insurance System Bureaus (hereinafter the Council of Bureaux) – an organization that all national bureaus of EEC countries and other associated countries should officially join, authorized to administer and implement the international automobile liability insurance system;

Damage case – a case that includes all the documents necessary for statement and settlement of an insurance event;

Franchise – part of damage covered by the insured, set as fixed value or percent of the total damage stipulated in the insurance contract;

Insurance mediator – individual or legal person carrying out insurance mediation activities for a fee and acting in the capacity of insurance broker or insurance agent;

Reinsurance mediator – reinsurance broker that mainly mediates reinsurance activity for a fee;

Auto insurance coverage territorial limits (hereinafter insurance territorial limits) – the territory of the Republic of Moldova (for home mandatory auto insurance) and territories of states whose national bureaus are parties to the Agreement between national insurance bureaus of EEC countries and other associated countries, signed by the National Automobile Insurers Bureau (for foreign mandatory auto insurance);

Brokerage mandate – contract of mandate signed between the insured (reinsured) or potential insured (reinsured) as client and the insurance and/or reinsurance broker, authorizing the latter to negotiate conclusion of insurance or reinsurance contracts, provide assistance before and after conclusion of contracts or in connection with damage repairing, as the case may be;

Qualified participation – direct or indirect possession of at least 10% of voting shares in the share capital of an insurer (reinsurer);

Injured person – any person entitled to receive insurance indemnity for any damage or bodily injury incurred as a result of a car accident;

Professional insurance market participants – insurer (reinsurer), insurance and/or reinsurance mediator and actuary that carry out their activity under this Law;

Official – a person that, according to law, statute or administrative document, undertakes duties and independently or jointly with other persons fulfills disposal functions on behalf and at the expense of the insurer, reinsurer or insurance and/or reinsurance broker, namely: member of the company’s Board, Executive body, Audit Committee, Chief Accountant, Head of branch etc.;

Green Card insurance policy – international insurance document issued on behalf of a national bureau, attesting the existence of a mandatory auto insurance valid outside the territory of the issuing state, according to Recommendation No. 5 of 25 January 1949 adopted by the Subcommittee on Road Transport of the Committee on Inland Transport within the United Nations Economic Commission for Europe;

MTPL insurance policy – mandatory auto insurance policy valid within the territory of the Republic of Moldova, attesting conclusion of a mandatory auto insurance contract;

Damage – negative impact upon an individual or legal person injured as a result of occurrence of a risk covered by a mandatory auto insurance contract;

Gross premium underwritten – premium calculated by the insurer (reinsurer) according to an insurance (reinsurance) contract prior to any amounts being deducted from it;

Net premium underwritten – gross premium calculated by the insurer (reinsurer) according to an insurance (reinsurance) contract after deduction of a portion from the premium ceded to reinsurance;

Risk – inconvenient event, possible and future, which could affect property, work capacity, life or health of a person;

Insured risk – phenomenon, event or a group of phenomena or events stipulated by the insurance contract, which, upon their occurrence, may cause damage to insured property or person (in life insurance, survival and death qualify as insured risk);

Reinsurance – partial or full cession of certain underwritten risks by one insurer called reinsured (assignor) to another insurer called reinsurer (cessionary) who, in its turn, undertakes to cover a certain part of the provided insurance indemnity;

Proportional reinsurance – division of the insured amount proportionally to risk distribution between parties to a reinsurance contract;

Non-proportional reinsurance – reinsurance through which the reinsurer (cessionary) undertakes to pay the insurance indemnity upon the occurrence of events stipulated by the insurance contract in the amount that exceeds net retention of the reinsured (assignor);

Net retention – portion of risk remaining in the insurer’s liability after cession of reinsured risk;

Bonus-malus system – a system of increasing and reducing the mandatory auto insurance premium depending on damage history;

Subagent – individual, other than manager of insurance agent – legal person, employee of an insurance agent on contract basis, acting on behalf of and under the civil liability contract of the insurance agent – legal person.

User – any person driving the vehicle: the insured, persons stipulated in the insurance contract, other persons driving the vehicle with or without the owner’s permission; within a driving school the person providing driving training is the user;

Initial value – initial value of damaged vehicles means:

- equivalent of sale price practiced by local specialized institutions in Moldovan lei at the official rate of the National Bank of Moldova as of the date of accident;

- equivalent of the corresponding price in specialized catalogues in Moldovan lei at the exchange rate of the currency market provided by the National Bank of Moldova as of the date of accident – for vehicles not sold by local specialized institutions;

- value determined by analogy with the price of certain vehicles with similar technical characteristics – for types of vehicles that do not have a determined price or for types or models no longer in production;

Salvage value – value of vehicle parts left undamaged after its complete destruction or, if beyond repair, no more than 25% of its value as of the date of accident.

 

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