6520

Authorization procedure and Trade Register aspects for NACE 6520

Setting up a company carrying out reinsurance activities (NACE code 6520) requires compliance with special formalities at the National Trade Register Office (ONRC). A simple standard registration is not sufficient; proof of prior authorization by the Financial Supervisory Authority (ASF) is required. Thus, when submitting the registration application, the operating authorization issued by the ASF must be attached, as well as proof of the paid-up share capital – which, for reinsurance, cannot be less than RON 5,000,000 according to the legislation in force. The articles of incorporation must expressly mention the main object of activity, and the shareholders and members of management bodies must provide evidence of professional integrity (tax clearance certificate, criminal record). The ONRC will additionally verify the existence of the ASF authorization in the database; without it, the application is rejected. Also, for branches of reinsurance companies from other states, separate registration rules apply, with additional formalities regarding the registered office and the designated representative.

Regulatory framework, specific opinions and control institutions

The main regulator is the ASF, which issues and revokes operating authorizations, monitors compliance with solvency requirements (under the Solvency II regime transposed by Law No. 237/2015), and carries out periodic inspections. In addition to the ASF opinion, the company must obtain a tax registration certificate from the Tax Authority (ANAF) and register in the RO e-Factura system if it exceeds the threshold of RON 500,000/year for domestic supplies (although reinsurance often involves B2B operations). Additional specific opinions – for example, from the Ministry of Finance for foreign exchange operations – generally do not apply in the absence of related activities. Control institutions include the ASF (for prudential and conduct supervision), ANAF (for taxation), and, in case of irregularities, the Fraud Investigation Directorate. The company must prepare annual financial statements in accordance with International Financial Reporting Standards (IFRS) and submit them to the ASF and the ONRC.

Tax management, ANAF audit risk and specific accounting

From a tax perspective, reinsurance activities are subject to the standard corporate income tax of 16%, but with particularities regarding the establishment and deduction of technical reserves (premiums, claims) according to ASF rules. Income from gross premiums and claims expenses are recognized based on contracts, and impairment adjustments are calculated according to applicable accounting regulations. Major ANAF audit risk – inspections focus on transfer pricing (if there are relations with affiliated parties abroad) and the reality of transactions with non-resident reinsurers. Until the mandatory RO e-Factura system comes into effect for reinsurance (deadline postponed to 2024-2025), invoices are issued in classic format, but electronic archiving is recommended. Specific accounting involves separate recording of technical reserves, written premium accounts, and acquisition expenses. The company must file annual tax return 101 and monthly/quarterly returns 100, as well as annual financial statements with the ONRC and ASF. The risk of sanctions for non-compliance with transparency (e.g., non-declaration of reserves) is high, possibly even leading to withdrawal of authorization. It is recommended to hire a tax consultant specialized in insurance and reinsurance to optimize reporting and avoid disputes with ANAF.