In June 2017, Law 12/2017 on insurance and reinsurance of the Principality of Andorra was approved and, in December, the Regulation that completes the first part of the process of adapting Andorran regulations to the new regime established by the European Union in insurance matters.
The reference points for updating this legal framework are the criteria emanating from the International Association of Insurance Inspectors and the new Solvency II regime established by the European Union, regulated by Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009, as well as its extensive implementing regulations and the rules issued by the Insurance and Occupational Pensions Authority.
The legal framework is based on the premise of assuming the conditioning factors and the trajectory of the current Andorran model, with the peculiarities derived from the limited size of the sector, and introduces essential changes in order to guarantee the transparency and solvency of the sector. The new legal framework entrusts the regulatory and supervisory function to the Andorran Financial Authority, a body that will assume this task as of January 2018.