The board of Financial and Capital Market Commission (FCMC) has decided to withdraw all the operating licences of Latvian insurer Balva to protect insurers.
Balva should opt to either hire a liquidator or agree the procedure for debt covering with the FCMC, or change it into a legal entity without operating business.
Earlier in April, the FCMC suspended the activities of the insurer to prohibit it from signing new insurance contracts until the rectification of deficiencies.
After studying Balva’s situation, the FCMC said that the company had failed to carry out the necessary improvements and was incapable to ensure fulfilment of the regulatory requirements over the period until withdrawal of licences.
Currently all the Balva insurance policies are still effective.
The FCMC has suggested few options for covering debts of Balva, which include meeting all insurance obligations, agreeing with other insurer to take over insurance contracts fully or partially.
Additional options include termination of insurance deals before their expiry, excluding the contracts of compulsory third party liability of owners of land transport vehicles, carrying out partial payment of insurance premiums.