LEGAL FRAMEWORK AND PRACTICAL CHALLENGES OF INSURANCE COMPANIES’ WINDING UP IN THE FEDERATION OF BOSNIA AND HERZEGOVINA

Due to the need to preserve the stability of the financial market, the winding up of insurance companies, particularly in compulsory liquidation or bankruptcy proceedings, requires a specific legal framework. This paper analyses the insurance market of the Federation of Bosnia and Herzegovina, which has experienced several insurance company liquidation proceedings characterized by their lengthy durati- on and the specific application of statutory provisions. The application of relevant legislation, both special and general, is linked to the moment when liquidation proceedings are initiated, which in practice results in the application of regulations that are no longer in force, with the aim of protecting creditors and ensuring legal certainty. The authors analyse the applicable regulations and critically highlight their ambiguities and shortcomings, relying on empirical data derived from completed and ongoing insurance company liquidation proceedings. In addition, the paper examines the currently applicable legislation and identifies deficiencies in the exi- sting legal regulation, based on a reflection on the regulations applied in current liquidation proceedings. The European legislative framework is also analyzed, and de lege ferenda proposals are presented with the aim of establishing a more syste- matic and effective legal framework for proceedings leading to the winding up of insurance companies and strengthening the protection of insurance service users.

Keywords: insurance market of the Federation of Bosnia and Herzegovina, winding up of insurance companies, liquidation, bankruptcy, regulatory framework