LITHUANIA Law and Practice Contributed by: Donatas Šliora and Marius Matiukas, ADON legal
mid-January 2025, DORA requirements will be directly applicable for such outsourcing.
Requirements on insurance activity and prod - ucts vary depending on: • whether insurance is mandatory; • whether the risk is considered large; • the type of insurance; and • the specific class of insurance. Some insurance is regulated under separate laws, and legislation is further supplemented by the resolutions of the board of the Bank of Lithuania and other supplementary legal acts. Each type of insurance adheres to different regu - lations, collectively making up a vastly legislated field. Recently, the Bank of Lithuania focused on insurance-based investment products to ensure management of conflicts of interest and trans - parency. All insurance market participants taking up insurance and reinsurance services must obtain authorisation for the provision of both life and non-life insurance. 9. Regtech 9.1 Regulation of Regtech Providers Regtechs themselves are not regulated specifi - cally (except for electronic ID and trust service providers, which must be licensed under the EU’s Regulation on electronic identification and trust services for electronic transactions in the inter - nal market (the “eIDAS Regulation” ). However, should financial institutions enter into service provision agreements with such undertakings, they are obliged under both EU and national law to determine whether the agreement is not con - sidered outsourcing; if it is, they must be sure to implement specific terms and conditions under
8. Insurtech 8.1 Underwriting Processes
The underwriting process is regulated through EU Directive 2016/97, which is transposed into national law through the Law on Insurance of the Republic of Lithuania, the Civil Code of the Republic of Lithuania, Resolutions of the Board of the Bank of Lithuania and other national legal acts. The insurtech landscape in Lithuania is not as prominent as in other jurisdictions, so the usual underwriting processes used by industry par - ticipants operating in Lithuanian jurisdiction are similar to regular good practices of risk evalu - ation based on the specific type of insurance found around the EU. Still, start-ups are experi - menting with peer-to-peer coverage models, usage-based insurance and streamlined digital claims processes, in which the Bank of Lithu - ania’s regulatory sandbox provides a crucial support mechanism for testing innovative insur - ance approaches, as the national legislation may not always cohere with new creative insurance solutions. 8.2 Treatment of Different Types of Insurance As regards transposing EU Directive 2009/138 (Solvency II) into national law, the Civil Code of the Republic of Lithuania and the Law on Insur - ance of the Republic of Lithuania follow Solven - cy II’s separation of life and non-life activity, gen - erally prohibiting the same licensed entity from providing both types of insurance and setting out different prudential and regulatory require - ments depending on the activity.
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