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EAEU proposes to introduce a standardized license for banks and insurance companies

This will allow organizations to gain access to the markets of other member states of the Eurasian Economic Union (EAEU) under the simplified procedure, the draft concept for the formation of a common EAEU financial market says, insur-info.ru reports.
EAEU proposes to introduce a standardized license for banks and insurance companies

“A standardized license is a special permit (license) issued by the regulator of the country of origin of the parent organization. The requirements for the license issue are the same for all member states and are established by consensus of member states based on the maximum requirements in force in member states,” the document says. This mechanism might come into force no earlier than January 1, 2025.

To obtain such a license, the size of the equity of the applicant bank must be at least $60 million, the insurer-applicant - $10.4 million minimum for life/non-life types of insurance. The minimum value of the bank's capital adequacy ratio should be at least 12.5%, for an insurance organization - at least 1.2%. Transitional exceptions are provided for Kyrgyzstan: the regulatory capital of the bank must be at least $50 million, the insurer - at least 5 million.

The regulator of the country of origin of the license applicant may advance additional requests to him on a unilateral basis “with assessment of potential risks to financial stability and possible consequences”.

In order to use the mechanism of simplified access to the market of another EAEU member state, the license holder must establish a subsidiary with 100% participation of the parent organization or buy 75%+1 share of an existing legal entity.

The document emphasizes that the presence or absence of a standardized license does not limit the legal entity’s activities in the domestic market, as well as the admission to the foreign markets in accordance with the legislation.

Source: http://www.insur-info.ru/press/148376/

Photos: vestifinance.ru

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