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Law no. 136/1995

on insurance and reinsurance in Romania

The current law comprises all applicable amendments and supplementations. The

law is general in nature, and the Insurance Supervisory Commission (CSA) shall not

be held liable for any legal effects hereof. The official wording of laws and normative

acts to amend and supplement the said laws shall be that published in the Official

Gazette of Romania.

This law comprises amendments pursuant to the following acts:

Government Ordinance no. 27/1997

Law no. 172/2004

Government Emergency Ordinance no. 61/2005

Law no. 283/2005

Law no. 113/2006

Law no. 172/2006

Law no. 180/2007

Law no. 304/2007 published in the Official Gazette of Romania no. 784 of

19/11/2007.

See Law no. 304/2007, whose art. II provides that Law no. 136/1995, as

amended and supplemented, shall replace the word "motor vehicle" with the

"vehicle", and the word "licensed" with the licensed/registered".

Law no. 71/2011

The Parliament of Romania has adopted this law.

CHAPTER I

General provisions

Art. 1. - In Romania, the business of insurance is carried out as compulsory or

voluntary life and non-life insurance.

Art. 1. For the purposes of this law, the words and expressions below shall havethe following meanings:

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1. insurance policyholder any person who signs an insurance contract to insure

another persons risk and who shall pay the relevant premiums to the insurance

undertaking;

2. vehicle any means of transportation, either self-propelled or not, used for land

transport, including any type of trailer, regardless whether attached or not, with the

exception of railway rolling stock, bicycles or vehicles with animal traction;

3. injured party any person entitled to collect claims for losses resulting from the

occurrence of the risk covered by a general liability insurance contract;

4. loss negative effect incurred by an injured party as a result of the occurrence

of a risk covered by a general liability insurance contract;

5. National Bureau professional organization, established in compliance with

Recommendation no. 5 of 25 January 1949, adopted by the Working party on road

traffic safety of the Transport Division of the UN Commission for Europe, which

groups insurance undertakings authorized to carry out motor liability insurance;

6. National Motor Insurers Bureau of Romania Romanias national bureau;

7. motor liability insurance territorial coverage limits for claims arising from vehicle

accidents:

a) on the territory of Romania;

b) on the territory of another Member State of the European Union and of the

European Economic Area;

c) on the territory of states in direct connection with two member states of the

European Union, where no national bureau has been established;

8. Green Card international insurance document issued on behalf of the national

bureau, in compliance with the Recommendation no. 5 of 25 January 1949, adopted

by the Working party on road traffic safety of the Transport Division of the UN

Commission for Europe;

9. franchise part of a claim which shall be the liability of the injured party,

established as fixed amount or percentage of the total amount of compensation

provided for in the insurance contract;

10. vignette sticker applied to the windscreen of the vehicle or in another visible

exterior area, certifying the existence of a motor liability insurance policy for the

respective vehicle, which is issued simultaneously with the motor liability insurance

policy.

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Article 2 In the case of optional insurance, the relationships between

policyholders and insurance undertakings, as well as the rights and obligations of

each party, shall be established in the insurance contract.

Article 3 In the case of compulsory liability insurance, the relationships between

policyholders and insurance undertakings, as well as the rights and obligations of

each party, shall be established by law.

Article 4 For the purposes of this law, motor liability insurance for claims arising

from vehicle and tram accidents, within applicable territorial coverage limits, shall be

compulsory.

Article 5 Compulsory insurance shall be pursued by:

a) Romanian insurance undertakings authorized by the Insurance Supervisory

Commission;

b) insurance undertakings authorized by the competent authorities of European

Union Member States, which carry out business in Romania on the basis of the right

of establishment and the freedom to provide services.

At the request of potential policyholders, the insurance undertakings which are

entitled to pursue compulsory insurance in compliance with paragraph 1, shall sign

the relevant insurance policy and issue a document of evidence.

Article 6 Reinsurance arrangements shall supplement insurance business by

transfer and acceptance of risks on the domestic and international insurance market.

In the case of reinsurance arrangements, the relationships between reinsured

policyholders and reinsurance undertakings, as well as the rights and obligations of

each party, shall be established in the reinsurance contract.

Paragraph (2) - repealed pursuant to article I point 5 of Law no. 172/2004.

Article 7 repealed pursuant to article I point 6 of Law no. 172/2004

Article 8 Risk occurrences shall be reported, claims shall be assessed, and

claims or sum assured shall be paid out in compliance with the law, in the case of

compulsory insurance or in compliance with insurance contracts, in the case of

optional insurance.

Events where only two vehicles are involved and only material loss has been

incurred may be also notified on the basis of a form issued by insurance

undertakings, called amicable accident report, where the drivers of the respective

vehicles write down the circumstances of the event, the identification data of the

vehicles involved, as well as the identification data of their own insurance

undertakings.

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The form, size, content and procedures regarding the use of the abovementioned

form shall be established in the norms issued by the Insurance Supervisory

Commission.

CHAPTER II

Insurance contracts

Articles 9-47 repealed pursuant to article 192 of Law no. 71/2011.

CHAPTER III

Motor liability insurance

Article 48 The individuals or legal entities who own vehicles licensed/registered

in Romania, as well as trams, shall obtain insure coverage by means of motor

liability insurance, within the territorial limits of the coverage and shall keep the

insurance contract in force by paying the relevant insurance premiums, and shall

visibly post the vignette on the windshield or on another visible exterior area of the

vehicle.

The persons entering Romania by vehicles licensed/registered abroad shall bedeemed insured in compliance with this law, in one of the following situations:

a) when the license plate number certifies insurance in compliance with the law of

the State where the vehicle is licensed/registered or with the international insurance

agreements valid in Romania;

b) when the owner holds international insurance documents which are valid in

Romania.

By way of derogation from the provisions laid down in this article, the individuals

and legal entities which use vehicles in races, rallies or practice runs may holdoptional insurance coverage.

Article 48 - When applying for registration or for amendments to the registration

certificate or the identity card of the vehicle and during regular technical inspections,

it shall be compulsory to present evidence of motor liability insurance, in compliance

with this law.

The insurance contract certifies existence of motor liability insurance. Conclusion

of the insurance contract shall be certified by means of the insurance policy/Green

Card.

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Article 49 Insurance undertakings shall pay out claims, based on the insurance

contract, for losses incurred by injured third parties arising from vehicle accidents, as

well as tram accidents, and for legal expenses incurred by policyholders during civil

proceedings, in compliance with:

a) the applicable legislation of the State where the vehicle accident occurred, to the

maximum level of compensation set out by the said legislation and in the insurance

contract;

b) applicable Romanian legislation, when injured parties are citizens of Member

States of the European Union, and the accident occurs in a territory which directly

connects two territories where the treaty which establishes the European Economic

Area is valid, provided that no national bureau is established in the respectiveterritory.

Article 50 Claims shall be paid out with respect to the amounts the policyholder

shall pay as legal expenses and compensation to injured parties either for injury or

death, as well as for damage or total loss of property.

In case of injury or death, claims shall be paid out with respect to the persons

outside the vehicle which caused the accident and the persons inside the same

vehicle, except for the driver of the said vehicle.

Claims shall also be paid out to spouses or dependants of the owner or the driverof the insured vehicle which caused the accident.

For damage or total loss of property, claims shall be paid out with respect to

property outside the vehicle which caused the accident and property inside the

vehicle, solely provided that such property was not transported on the basis of a

contract concluded with the owner or user of the said vehicle, as well as provided

that such property did not belong to the owner, user or driver of the vehicle

responsible for causing the accident.

Article 51 The claims referred to in art. 49 and 50 shall also be paid out when the

person driving the vehicle responsible for causing the accident is a person other thanthe policyholder.

Claims shall also be paid out when the injured partys residence or office is located

outside Romania.

In case of personal injury or death or damage or total loss of property, claims shall

be paid out provided that the vehicle causing the accident is identified and insured,

even when the person causing the accident remains unidentified.

Article 52 When on the date when the accident occurs, the same vehicle owner

holds several valid insurance policies, claims shall be paid out equally by allinsurance undertakings. Claims shall be paid out in full by the insurance undertaking

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where the injured party has filed the claim, and subsequently, the said insurance

undertaking shall turn to the other insurance undertakings in order to recover the part

of the claim paid out on their behalf.

The policyholder shall inform the insurance undertaking when concluding such

insurance policies with other insurance undertakings.

Article 53 The following shall be established in the norms adopted by the

Insurance Supervisory Commission, in compliance with the law: the scope of motor

liability insurance, territorial coverage limits, the amount of claims, payment terms,

duration of the insurance contract, benefits and penalties applicable to policyholders,

criteria and terms for granting or withdrawing the license, the persons who shall

conclude compulsory insurance contracts, instances when the insurance undertakingrefuses to sign a motor liability insurance contract, when appropriate, as well as any

other information concerning this type of insurance.

Article 54 Claims shall be calculated and paid in accordance with article 43 and

49 and, when claims are established by court order, the rights of the parties injured

in accidents caused by vehicles owned by persons insured in Romania shall be

exercised against the insurance undertaking which has issued the motor liability

insurance, within the limits of its obligation, as set out this chapter, by means of court

summons issued with respect to the person/persons responsible for causing the

accident in their capacity of third party intervenient.

The rights of parties injured in accidents caused in Romania by vehicles owned by

persons insured abroad shall be exercised against the insurance undertaking,

through its claims offices or through the Motor Insurers Bureau in Romania, as

appropriate, provided that the conditions set out in article 48 paragraph 2 are met.

Article 55 Claims shall be paid by the insurance undertaking to natural and legal

person injured parties.

Insurance compensation paid out shall not be subject to policyholder creditors

claims.

Claims shall be paid out to policyholders provided that evidence is produced with

respect to providing compensation to injured parties and such claims shall not be

subject to the recovery proceedings set out in article 58.

When claims are collected, injured parties shall state in writing that they have been

compensated for the loss incurred and that they have no further claims against the

insurance undertaking which has issued the motor liability insurance and the

policyholder (party at fault) with respect to the same loss.

When payment is made by the insurance undertaking which has issued the motor

liability insurance directly to the bank account of the injured party, the latter partyshall be deemed compensated in full when, within 30 days of receipt of the amount

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in the relevant account, the respective injured party has failed to notify the insurance

undertaking which has issued the motor liability insurance of possible disputes

concerning the amount of such claims.

When the insurance undertaking is subrogated to the rights of the injured party, in

compliance with the provisions of article 22, the potential difference in claims

between the optional insurance and motor liability insurance shall be paid out on the

optional insurance policy, without being recovered from the policyholder (party at

fault), provided that the claims paid on the optional insurance policy does not exceed

the maximum claims which may be paid by an insurance undertaking for the losses

caused by one and the same vehicle accident, in accordance with applicable legal

provisions.

Article 56 The persons who use in Romania vehicles licensed/registered abroad

which are not insured, in accordance with article 48 paragraph 2, or whose insurance

expires during their stay in Romania, shall owe insurance premiums in compliance

with applicable legal provisions.

The officers of the border patrol shall not verify the insurance documents of the

vehicles licensed/registered in Member States of the European Union, as license

plates shall be deemed evidence of insurance.

When crossing national borders, the officers of the border patrol shall verify the

insurance documents and shall request the owner, the representative of the owner orthe driver of the vehicle licensed/registered in Non-Member States to produce

evidence of insurance premium payment. Uninsured persons or persons who, upon

verification, are unable to produce evidence of insurance or insurance premium

payment, shall conclude a motor liability insurance contract and pay insurance

premiums to the entities designated by the insurance undertakings authorized to

pursue motor liability insurance, in compliance with article 5 paragraph 1.

The insurance documents of vehicles licensed/registered in Non-Member States

which enter Romania through another Member State of the European Union shall not

be subject to random verification.

Article 57 Repealed pursuant to I point 24 of Government Emergency Ordinance

no. 61/2005

Article 58 Insurance undertakings shall recover the amounts paid out as claims

from the persons at fault, under the following circumstances:

a) the accident has occurred by willful action of the person at fault;

b) the accident has occurred as a result of offences which are subject to the legal

provisions on public road traffic, even when the accident did not occur on such public

roads or as a result of such offences;

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c) the accident was a hit and run event;

d) the person liable for the losses was driving the vehicle without the consent of thepolicyholder.

Article 59 Repealed pursuant to article I point 46 of Law no. 172/2004.

CHAPTER III1

Professional liability insurance for doctors, pharmacists and other health care

personnel

CHAPTER III1, i.e. articles 591-599, repealed pursuant to the single article of Law no.180/2007.

Article 591- 599- Repealed.

CHAPTERIV

Protection funds

Article 60 In order to protect policyholders, insurance beneficiaries and injured

third parties, the Guarantee Fund has been established through the contribution of

insurance undertakings, for payment of compensation arising from optional and

compulsory insurance contracts, concluded in compliance with this law, when

insurance undertakings are subject to insolvency proceedings, in accordance with

article 31 paragraph (2) of Law no. 32/2000 on insurance undertakings and

insurance supervision, as amended and supplemented.

The Guarantee Fund shall be established, managed and used by the Insurance

Supervisory Commission which shall establish an annual share contribution ofmaximum 10% of gross premiums received by insurance undertakings from direct

insurance.

Contributions to the Guarantee Fund shall be calculated, recorded, paid and

reported by insurance undertakings separately for non-life and life insurance.

The amounts available in the Guarantee Fund shall be placed with the State

Treasury in interest-bearing financial instruments, with credit institutions in money

market instruments, in Government bonds or bonds issued by local public

authorities, as well as in other investments or allocations established in accordance

with applicable legal provisions.

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For the purposes of paragraph 2, the Insurance Supervisory Commission shall

adopt, in accordance with the law, norms which shall establish:

a) the manner in which the Fund shall be established and represented;

b) the manner in which the revenue budget of the Guarantee Fund is calculated

and managed;

c) the payment procedure and terms;

d) recovery of payments made by the Guarantee Fund;

e) other issues related to the Guarantee Fund.

In case of budget deficit, the Insurance Supervisory Commission may increase theshare of contribution set out in the norms applicable in the current year, so that the

Guarantee Fund shall be able to meet obligations when due.

Paragraph (6) repealed pursuant to article I point 28 of Government Emergency

Ordinance no. 61/2005.

Article 61 The Road Traffic Victims Protection Fund has been established in

order to protect the persons injured in accidents caused by registered vehicles, as

well as by trams, in cases when the person who has caused the accident remains

unidentified or the vehicle, or tram respectively, does not hold a valid motor liability

insurance policy.

Insurance undertakings which provide motor liability insurance, in compliance with

the provisions laid down in article 5, shall contribute to the Road Traffic Victims

Protection Fund referred to in paragraph 1, according to the amount premiums

received for this type of insurance, up to the amount required to cover payment

obligations by the Fund. This share of contribution shall not exceed 5% of gross

premiums received for this type of insurance.

The Road Traffic Victims Protection Fund shall have as purpose the payment of

claims for personal injury or death, provided that the person who caused theaccident remains unidentified, or the payment of claims for damage or total loss of

property, personal injury or death, provided that the vehicle or, respectively, the tram

which caused the accident was uninsured.

In case of damage or total loss of property arising from accidents caused by

uninsured vehicles or trams, a injured party shall be liable for part of the claims the

franchise in accordance with the norms adopted for the implementation of this law.

The Road Traffic Victims Protection Fund shall be established, managed, used and

taken over in accordance with the norms issued by the Insurance Supervisory

Commission.

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The amounts available in the Road Traffic Victims Protection Fund shall be placed

with the State Treasury in interest-bearing instruments, with credit institutions in

money market instruments, in Government bonds or bonds issued by local public

authorities.

In case of budget deficit, the Insurance Supervisory Commission may increase the

share of contribution set out in the norms applicable in the current year, so that the

Road Traffic Victims Protection Fund shall be able to meet obligations when due.

In case of litigation, the rights of the persons injured in accidents caused by

registered vehicles, as well as trams, where the person who has caused the accident

remains unidentified, or when the vehicle or tram does not hold motor liability

insurance, shall be exercised against the manager of the Road Traffic VictimsProtection Fund appointed by the Insurance Supervisory Commission, in compliance

with the provisions of paragraph 5.

Article 61 - Start-up costs, management fees and payroll expenses shall be paid

out from the amounts referred to in article 60 and 61.

Budget surplus, in accordance with article 60 and 61 shall be carried forward to the

next financial year.

The documents which certify the requirement applicable to insurance undertakings

to contribute to the funds referred to in article 60 and 61 shall be deemed debtsecurity, in accordance with the law.

At maturity, the aforementioned debt security becomes enforceable by the

Insurance Supervisory Commission or the Funds manager, as appropriate, who shall

be entitled to enforce payment in compliance with the provisions of the Code of civil

proceedings.

The Insurance Supervisory Commission and the Fund managers shall be entitled

to take legal action against persons which are in a legal relationship with the funds

referred to in article 60 and 61, with respect to the payments made or which shall be

made by the respective funds.

The Insurance Supervisory Commission and the Fund managers shall be entitled

to recourse against the entity which caused the loss, in order to recover the amounts

paid out from the respective funds.

The amounts deposited with the protection funds may be used solely to the

purpose for which the same funds were established.

CHAPTER V

Sanctions

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Article 62 Interests and delay penalties shall be owed for failure to pay in duetime the amounts payable to the funds established in accordance with the provisions

of article 60 and 61, calculated in compliance with legal provisions applicable to the

enforcement of state budget debt securities. Interests and delay penalties shall be

transferred to the accounts of the respective funds.

Article 63 The following shall be deemed criminal offences:

a) failure to pay in due time claims arising from vehicle accidents to injured parties

or policyholders, as set out in the norms issued pursuant to article 53;

b) failure to pay in due time the amounts owed to the protection funds, as well asthe share contribution calculated as a percentage of gross premiums received from

compulsory insurance;

c) failure by insurance intermediaries to deposit with insurance undertakings the

amounts received as insurance premiums, unless such offences qualify as crimes;

d) non-compliance by insurance undertakings with the obligations set out in article

36 paragraph 2;

e) non-compliance by insurance undertakings with the obligations set out in article

49;

f) failure by insurance undertakings to produce the claims statement referred to in

article 55 paragraph 4;

g) non-compliance by insurance undertakings with the prohibition to recover the

difference in claims between optional insurance and motor liability insurance, in

accordance with the provisions laid down in article 55 paragraph 6;

h) failure by insurance brokers to notifying insurance undertakings of the

occurrence of the risks insured, within the term set out in the insurance contract, in

accordance with article 19 paragraph 3;

The criminal offences referred to in paragraph 1 shall be sanctioned as follows:

a) for the offences committed by insurance undertakings and referred to in

paragraph 1 letters a), b), d)-g) - written warning or fine in an amount ranging from

Lei (RON) 1,000 to 5,000, restrictions, temporary or permanent prohibition to carry

out insurance business, for one or several insurance classes, or suspension or

withdrawal of the authorization granted to insurance undertakings;

b) for the offences committed by directors, managers or executive officers, as per

paragraph 1 letters a), b), d)-g) - fine in an amount ranging from Lei (RON) 1,000 to5,000;

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c) for the offences committed by insurance agents and referred to in paragraph 1

letter c) - fine in an amount ranging from Lei (RON) 500 to 1,000;

d) for the offences committed by brokers and referred to in paragraph 1 letter c)

and h) - written warning or fine in an amount ranging from Lei (RON) 1,000 to 2,500,

temporary or permanent prohibition to carry out the business defined in article 2

letter C point 62 of Law no. 32/2000 on insurance undertakings and insurance

supervision, as amended and supplemented, or withdrawal of relevant authorization.

e) for the offences committed by insurance undertakings and referred to in

paragraph 1 letters a),b),d)-g) or for the repeated offences or offences committed in

bad faith by brokers and referred to in paragraph 1 letters c) and h) - temporary or

permanent prohibition of insurance undertakings to carry out insurance business forone or several insurance classes or suspension or withdrawal of authorization

granted to insurance brokers.

The sanctions set out in paragraph 1 letters a), b), d), e) f) and g) shall apply to

the insurance undertakings referred to in paragraph 2 letter a) or to the persons

referred to in paragraph 2 letter b).

Offences shall be reported by the persons authorized in this respect by the

Insurance Supervisory Commission and sanctions shall be enforced by the

Insurance Supervisory Commission Council.

Decisions to enforce sanctions shall be signed by the President of the Insurance

Supervisory Commission and shall become effective as of the date of notification to

the person subject to the respective sanction.

Article 64 Non-compliance by individuals or legal persons with the obligation to

conclude insurance contracts pursuant to article 48 and 56 shall be deemed criminal

offence and shall be sanctioned by fine in an amount ranging from Lei 10,000,000 to

20,000,000 and the vehicles registration certificate shall be withheld until the

document which certifies conclusion of the insurance contract is presented.

Article 65 Repealed pursuant to article I point 53 of Law no. 172.2004.

Article 66 In the case of the criminal offences referred to in article 63 and 64,

complaints shall be filed with competent courts of law, in compliance with the law.

Article 67 The amount of the fines referred to in article 63 and 64 shall be

updated pursuant to Government decisions, according to the developments of the

consumer price index.

Article 68 The criminal offences referred to in article 63 and 64 shall be subject to

the provisions of the Government Ordinance no. 2/2001 on legal system of

contraventions, approved as amended and supplemented by Law no. 180.2002, with

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its subsequent amendments, while these do not contravene the provisions of this

law.

CHAPTER VI

Transitional and final provisions

Article 69 Law enforcement units, fire departments, public and private health care

facilities, family physicians and other public authorities which are competent to

investigate vehicle accidents or other events, as appropriate, shall communicate,

upon request from insurance undertakings, within maximum 30 days from the date of

the relevant request, the facts and data related to the causes and circumstances of

the insured risks and losses, in order for the insurance undertaking to establish and

pay insurance compensation.

Article 69 - In Romania, insurance and reinsurance shall be subject to the

provisions laid down in the Civil Code and in this law.

For the circumstances which are not regulated by this law, the provisions laid down

in Law no. 32/2000 as amended and supplemented, as well as any other relevant

legal provisions shall apply, as appropriate.

Article 69 - The Insurance Supervisory Commission shall adopt mandatory norms

for the implementation of the provisions laid down in the Civil Code and in this law.

Article 70 This law shall enter into force as of 1 February 1996.

As of the date when this law becomes effective, the following shall be repealed:

Title XIII, Section I - Insurance contracts - of the Commercial Code, Decree no.

471/1971 on State insurance, recast in 1988, Decision of the Council of Ministers no.

1.715/1971 on the implementation of Decree no. 471/1971, Government Ordinance

no. 387/1990 on some measures related to vehicle insurance, as well as any othercontrary provisions.

This law was adopted by the Chamber of Deputies in the meeting of 21 December

1995, in compliance with the provisions of article 74 paragraph (1) of the Romanian

Constitution.

PRESIDENT OF THE CHAMBER OF DEPUTIES

ADRIAN NSTASE

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This law was adopted by the Senate in the meeting of 21 December 1995, in

compliance with the provisions of article 74 paragraph (1) of the Romanian

Constitution.

PRESIDENT OF THE SENATEProfessor OLIVIU GHERMAN, Ph.D.Bucharest, 29 December 1995No. 136