Fehmi Mehmeti: Revocation of the license of the Insurer "Kosova e
Re" does not endanger the stability of the insurance sector in
Kosovo
Speech by Mr Fehmi Mehmeti, Governor of the Central Bank of the Republic of Kosovo, at a
press conference, Pristina, 24 September 2021.
* * *
Dear media representatives,
Dear citizens,
Based on the competencies and responsibilities of the Central Bank of the Republic of Kosovo,
deriving from Article 36 and Article 67 of the Law on the CBK, as well as in accordance with
Article 16, Article 99, Article 100 and Article 124 of the Law on Insurance, in meeting held on
September 24, 2021, the Executive Board of the CBK has decided that to the Insurer "Kosova e
Re", to revoke License no. 007 of 25 April 2002, issued by the Banking and Payments Authority of
Kosovo (BPK), the legal predecessor of the CBK.
The insurer "Kosova e Re", over the years has had financial difficulties in meeting the legal
requirements of the CBK, in terms of capital adequacy, solvency and assets covering technical
provisions. In order to improve the financial situation and meet the legal and regulatory
requirements, the Central Bank of the Republic of Kosovo, respectively the Executive Board of
the CBK in accordance with applicable law, has continuously made efforts to improve the
financial situation of the Insurer "Kosova e Re".
However, despite the readiness and efforts of the CBK, the Board and Management of the
Insurer has failed to meet the legal requirements and improve the financial situation of the
Insurer.
At the same time, the shareholder of Insurer "Kosova e Re" did not respond to the CBK's
requests for capital increase and achieve compliance with applicable legal requirements.
The lack of willingness of the shareholder to meet the capital requirements has seriously
jeopardized the capacity of the Insurer to meet its obligations to policyholders and other creditors.
Therefore, in order to protect policyholders and to prevent the growing negative impact on the
insurance market and the financial system in general, the CBK based on the duties and
responsibilities arising from the Law on the CBK and the Law on Insurance, has taken the
decision to revoke the Insurer's License.
The CBK has opened compulsory liquidation procedures, according to Chapter 18 of Law no. 05
/ L-045 on Insurance, by appointing the Liquidator, who will direct the Insurer in Liquidation
"Kosova e Re" and will ensure fair and equal treatment, always in accordance with applicable
legal requirements, to all creditors. With the appointment of the Liquidator, all responsibilities of
the administrator, the Board of Directors and the Management of the Insurer in relation to its
management cease.
The liquidator will be available to review all claims, primarily policyholders as well as other
creditors. The liquidator will report on a monthly basis to the CBK regarding the progress of
fulfillment of obligations to creditors. At the same time the liquidator will notify in more detail all
creditors and other stakeholders regarding the manner of communication and will provide phone
contacts, email and location for submission of all requirements of policyholders and other
creditors.
The Central Bank instructs all policyholders and other creditors to follow announcements in the
coming days by the Liquidator and the CBK regarding the instructions on processing the claims
they have in relation to the Insurer in liquidation "Kosova e Re". On this occasion, I would like to
express our high appreciation to the Insurers operating in our market who have expressed their
willingness to take over all active policies of the insurer "Kosova e Re" so that citizens do not
need to repurchase the policies of insurance.
The CBK, in accordance with the duties and responsibilities set forth in the Law on the Central
Bank and other relevant laws governing the activity of financial institutions, will continue its
activities to ensure full compliance of the activity of financial institutions with the requirements set
by applicable laws and regulations. Maintaining the ability of financial institutions to meet financial
obligations is of a great importance for maintaining financial stability in the country, which is the
primary objective of the CBK. Therefore, in order to maintain financial stability and protect users
of financial services, the CBK remains committed to use all legal opportunities to ensure the
smooth running of the financial system in the country, providing the country's economy with a
financial system in function of macroeconomic development and stability, as well as a system
that provides security for all users of financial services.
Revocation of the license of the Insurer "Kosova e Re" does not endanger the stability of the
insurance sector in Kosovo. Kosovo's financial system, since the beginning of its operation, has
had a stable development and has served as an important source of macroeconomic stability in
the country. In recent years, we have an acceleration of activity growth in almost all components
of the financial system, while performance and sustainability indicators have also improved
further. Regarding the insurance sector in particular, the activity of this sector is continuing to
grow, while the regulatory and supervisory measures taken by the CBK have resulted in a
positive financial performance of this sector, after a very long period of loss.
Therefore, we pledge that we will continue to take all measures provided by law in order to allow
in our market the operation of only those financial institutions that are able to contribute to the
further development of the financial system and the economy of the country , as well as to
contribute to the further strengthening of financial stability.