NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007

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NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007

ANNUAL REPORT 2007The enactment of set of by-laws, at the end of 2006, introduced new law legislative to entity markets andoverall insurance market in Bosnia and Herzegovina. Although this process is expected to bring significantchanges, it is now clear that those expectations were great and unreasonable. Neither the introduction of thenew laws fulfilled its purpose nor would it be possible to be realized in near future. This, in the meantime,gives the space for insurance companies’ activities, which are in many cases outside the law. Bosna RE as anqualified reinsurance company is well aware of such activities. Despite close collaboration with SupervisoryAgency of F BH and to some extent with Agency of R Srpska, a little has changed. Those that were actingoutside the law continue that practice even supported by the Agency itself (R of Srpska Agency) that issueslicences to foreign reinsurers but only to those registered in Serbia. Due to this practice Bosna RE lost approximatelypremium income in the amount of KM 40 million from 1998 till now.The structure of reinsurance premium based on its origin (Bosnia and Herzegovina, foreign countries) ispresented in Graphs 7 and 8. In comparison to previous year, reinsurance premium coming from abroad wasdecreased as a consequence of a loss of reinsurance portfolio in R of Macedonia. The run-off for the contractsvalid until 2005 from R Croatia almost completely closed and lower participation in foreign contracts resultedin decrease of losses paid up abroad.Graph 734

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