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Andorra’s Financial System: An Overview

Regulatory Framework and Institutional Structure

In 2002, a report highlighted the need for improvement in Andorra’s regulatory framework for insurance, which was based on a law from 1989. Since then, significant efforts have been made to strengthen the institutional structure of the financial system.

Key Developments

• The Institut d’Assistència Financera (INAF) has been reinforced as the authority responsible for the Andorran financial system, with increased independence and capacity for cross-border cooperation.
• Many of the 2002 recommendations on banking regulation and supervision have been implemented by the authorities. However, most of the recommendations related to the insurance and securities sectors remain unimplemented.

Financial System Overview

Andorra is a small but significant financial center, dominated by banks. The financial services sector contributes approximately 15% of GDP and employs around 1,523 people (3.6% of all jobs).

Composition of the Financial System

• Banking institutions: 7
• Specialized financial credit institution: 1
• Collective investment entities: 7
• Wealth management companies: 4
• Insurance companies: 28