Advances in insurance legislation in Georgia

Georgia has been pushing to modernise its insurance sector for years. Through a twinning programme Spain has been providing support to strengthen the Insurance State Supervision Service of Georgia (ISSSG). This twinning action seeks to adapt Georgian legislation to European Union regulations, specifically that of Solvency II.

But what is Solvency II? Insurers undertake to respond economically to adverse situations (natural disasters, robberies, accidents, etc.). As these situations cannot be predicted, it is essential to monitor that insurance companies have the ability to respond at any time to the commitments they have acquired. In other words, to ensure these companies are solvent and have the capacity to pursue their business activities.

Solvency II is the regulation that controls the management of insurers. This is an enhanced solvency regulation for the insurance and reinsurance sector in the European Economic Area (EEE). It comprises a comprehensive approach to risk management with a forward-looking vision based on three pillars to ensure that insurers are capable of meeting their commitments.

In this twinning programme, which is managed by FIIAPP, the Insurance State Supervision Service of Georgia and the General Directorate for Insurance and Pension Funds (DGSFP) have been working together for two years to adapt this European regulation to Georgia. To date, Georgian draft legislation has been presented to adapt to Solvency II.

Despite the difficulties caused by the pandemic, the programme is being implemented successfully, combining face-to-face with remote work. Thanks to the work of all the professionals involved, it has been possible to both carry out training activities and draft the new legislation. Over the next two years, technical training in Solvency II will be given to both ISSSG staff and the other actors involved in the Georgian insurance market.