REPUBLIC OF LITHUANIA                                           
                                                                                
                               LAW                                              
                                                                                
                    ON STATE SOCIAL INSURANCE                                   
                                                                                
                                                                                
                            CHAPTER I                                           
                                                                                
                                                                                
                       General Provisions                                       
                                                                                
     Article 1. State Social Insurance                                          
                                                                                
     State  Social  Insurance  shall  be  the  system  of  social               
economic means  established by  the State,  which  shall  provide               
insured residents  of the Republic of Lithuania, as well as their               
family members  in cases  established by  law, with  finances and               
services necessary for living if, for reasons established by law,               
they are  unable to  subsist on  their  earned  income  or  other               
income, or  for valid  reasons  established  by  law,  they  have               
additional expenditures.  State Social  Insurance policy shall be               
implemented by  organizations concerned with the interests of the               
insurers and the insured.                                                       
                                                                                
     Article 2.State Social Insurance Regulations                               
                                                                                
     In addition  to this  and other laws, State Social Insurance               
shall be controlled by Government-approved State Social Insurance               
benefit   Regulations,    Regulations   of    social    insurance               
institutions, and Regulations for the drafting and implementation               
of the State Social Insurance budget.                                           
                                                                                
     Article 3. State Social Insurance Payments                                 
                                                                                
     The following  payments shall  be made from the State Social               
Insurance budget:                                                               
     1) State  pensions, according  to the  Law on Pensions of the              
Republic of Lithuania;                                                          
     2) sickness  allowances, maternity  and child birth benefits,              
child care benefits, and funeral grants;                                        
     3)  payments   to  the   employment  fund  for  unemployment               
insurance;                                                                      
     4) payments  to defray the expenses of medical treatment and               
prevention.                                                                     
                                                                                
     Article 4. Persons Insured by the State Social Insurance                   
                                                                                
     State Social Insurance shall be obligatory for:                            
     1) persons working under employment;                                       
     2) deputies  who are  paid  for  work  in  their  respective               
councils;                                                                       
     3) persons  who work  for organizations of a military nature               
(firefighters,  rescuers,   signalers,  etc.)  if  they  are  not               
eligible for special social provisions under other laws;                        
     4) members  of partnerships  including agricultural partner-               
ships receiving in them income from work;                                       
     5) shareholders  who receive income for their work in a stock              
corporation ;                                                                   
     6) members of the College of Barristers;                                   
     7) sole proprietors;                                                       
     8) farmers  and members  of their  families who  are over 18               
years of age and who work on the farm.                                          
                                                                                
     Persons specified  in items  1-6 shall be obligatory insured               
by all branches of State Social Insurance specified in Article 3.               
Other persons  enumerated in  this Article  shall be compulsorily               
insured by  State pension  insurance and  by  other  branches  of               
insurance provided  for in this law. They may be insured by other               
branches of State Social Insurance on a voluntary basis.                        
     Persons specified  in items  1-6 shall  be  insured  by  the               
enterprises, institutions,  or organizations  of which  they  are               
employees or members, also they may be insured by themselves.                   
     Persons who  are not  enumerated in  this Article  shall  be               
insured by  the branches of insurance provided for in this law on               
a voluntary  basis either  individually or  through organizations               
which unite them.                                                               
                                                                                
     Article 5. Period of State Social Insurance                                
                                                                                
     The period  of State  Social Insurance  shall be  the period               
when a  person's contributions  are  being  paid  by  the  person               
himself or  are being  paid for  him, as well as any other period               
which is  equaled by  law to the period of State Social Insurance               
coverage.                                                                       
                                                                                
                                                                                
                            CHAPTER 2                                           
                                                                                
                                                                                
                 State Social Insurance Benefits                                
                                                                                
                      1.Sickness Allowances                                     
                                                                                
     Article 6. Eligibility for Sickness Allowances                             
                                                                                
     Sickness allowances shall be paid:                                         
     1) in  the case  of incapacity  for  work  as  a  result  of               
sickness or injury;                                                             
     2) in the case a family member sickness requiring nursing;                 
     3) in the case of an epidemic;                                             
     4) during treatment at a prosthetic-orthopedic hospital;                   
     5) in  the case where a person is temporarily transferred to               
another  workplace   because  he   or  she   has  contracted   an               
occupational disease, tuberculosis, or virus.                                   
     Sickness allowances  shall also  be rewarded  to persons who               
must  undergo   treatment  in   rehabilitation  institutions  for               
tuberculosis or  other serious  diseases which  are enumerated on               
the list  approved by  the Ministries  of Health  Care and Social               
Security (part 3 of Article 24).                                                
                                                                                
     Article 7. The Right to Sickness Allowances                                
                                                                                
     Insured persons  specified in items 1-6 of Article 4 of this               
law shall be eligible for sickness allowances, provided that they               
are released from work for reasons set forth in Article 6 of this               
law  and therefore have no income from work. This right to obtain               
allowances  shall   begin  from   the  first  day  of  employment               
(insurance).                                                                    
     Allowances shall be paid according to the general procedure,               
provided that the right to receive such allowances is acquired in               
the period  of employment (including the probation period and the               
day of  dismissal), and within 3 calendar days of leaving the job               
voluntarily or  being  dismissed  from  job  with  the  right  to               
discharge gratuity.                                                             
     Persons who  are insured  pursuant to items 1-6 of Article 4               
of this  law and  who loose  their  job  shall  be  eligible  for               
sickness allowances  due to  disease or injury (item 1 of Article               
6), provided that they become incapable of work during the period               
when, pursuant  to law,  discharge gratuity,  all wage, or a part               
thereof is  payable, and  they are  incapable of  work when  this               
period ends.                                                                    
     Sickness allowances shall be paid on the basis of a sickness               
certificate which  shall be  issued according  to the established               
procedure.                                                                      
                                                                                
     Article 8. The Length of Sickness Allowance Payments                       
                                                                                
     Sickness allowances  shall be  paid to  insured persons  who               
become sick  as a  result of disease or injury (item 1 of Article               
6) in  the periods  set forth  in Article  7, beginning  with the               
first day that they become unable to work (not including the days               
for which  discharge gratuities  or wages  were paid), and ending               
with their  recovery from disability or when they acquire invalid               
status.                                                                         
     Sickness allowances  for part-time  and seasonal workers who               
become sick  during the  period of  employment contract  shall be               
payable for  no more  that 30  calendar days after the employment               
contract expires.                                                               
     Allowances for  persons who  are  injured  at  work  or  who               
contract  occupational  disease  or  tuberculosis,  and  who  are               
employed as  part-time or  seasonal workers  shall be paid in the               
manner established in part 1 of this Article.                                   
     The length  of sickness  allowance payments  to invalids who               
are still  employed shall  be established  by  the  State  Social               
Insurance Benefit Regulations.                                                  
                                                                                
     Article 9. Sickness Allowance Payments during the Period of                
                Vacation                                                        
                                                                                
     If a  person becomes  sick as  a result of disease or injury               
during an  annual paid  vacation, allowance  shall be payable for               
all sick  days from  work which  are  authorized  by  a  sickness               
certificate.                                                                    
     If  a   person  becomes  sick  during  an  unpaid  vacation,               
allowance shall  be payable  beginning with the day the person is               
to resume working.                                                              
                                                                                
     Article 10. The Amount of Sickness Allowance                               
                                                                                
     Sickness allowance  shall be  payable in  the amount  of  80               
percent of the sick person's compensatory wage.                                 
     If sickness  lasts for more than 30 calendar days, allowance               
in the full amount of the compensatory wage shall be payable from               
the 31st day of sickness.                                                       
     A person  who is injured in the workplace or who contracts an              
occupational disease  shall be  eligible for sickness allowance in              
the amount of his or her full compensatory wage.                                
     Sickness allowances payable under items 1-4 of Article 6 may               
not be lower than the minimum wage established by the laws of the               
Republic of  Lithuania, and  calculated pro rata to the period of               
insured person'sservice or the work done.                                       
                                                                                
     Article 11. Calculation of Compensatory Wage                               
                                                                                
     Wages which  are compensated  by sickness  allowances  shall               
comprise the  sum of  all  average  earnings  in  all  places  of               
employment wherein the person is insured, not exceeding 5 minimum               
wages as  established by  the laws  of the Republic of Lithuania.               
The payment  subject  to  compensation  shall  be  calculated  in               
compliance with State Social Insurance Benefit Regulations.                     
     In the  event of  injury in the workplace or the contraction               
of an  occupational disease,  all average  wage in  the place  of               
employment wherein  the incident  occurred shall  be  compensated               
for, regardless of earnings in other places of employment.                      
                                                                                
     Article 12. Conditions Under Which Allowances Shall not be                 
                 Payable                                                        
                                                                                
     Sickness allownaces shall not be payable to:                               
     1)  incapable   of  work  persons  who  were  injured  while               
committing an offense;                                                          
     2) persons  who damage  their own  health or  the health  of               
their dependents,  or who  feign sickness, in order to avoid work               
or other employment;                                                            
     3) persons  whose sickness is the result of alcoholism, drug               
addiction, or the use of toxic substances.                                      
                                                                                
     In cases  where a  person  voluntarily  undergoes  inpatient               
treatment  for   alcoholism,  drug   addiction,  or  toxicomania,               
sickness allowances  shall be  payable  for  no  longer  than  14               
calendar days of a calendar year.                                               
     Persons  who   violate  the   treatment  or  nursing  regime               
administered by a physician, or who, without a valid reason, fail               
to report to a physician or to a lawfully established examination               
of working-capacity,  shall either  not be paid their allowances,               
or shall  have their  allowances  terminated,  according  to  the               
procedure established  by  the  State  Social  Insurance  Benefit               
Regulations.                                                                    
                                                                                
     Article 13. Sickness Allowances for Nursing Family Members                 
                                                                                
     Allowances for  nursing sick family members shall be payable               
only upon  certification from a physician that the person must be               
nursed.                                                                         
     Allowances shall  be paid  for nursing family members for no               
longer than 7 calendar days.                                                    
     Allowances shall  be paid for nursing sick children under 14               
years of age for no longer than 14 calendar days.                               
     Allowances shall be paid for nursing inpatient sick children               
under 5 years of age for the entire period of nursing.                          
                                                                                
     Article 14. Sickness Allowances During Epidemic                            
                                                                                
     If a  quarantine  is  being  enforced  in  the  nidus  of  a               
particularly dangerous  infection, allowances shall be payable to               
employees who are removed from work.                                            
     Insured persons  who are  temporarily removed from work by a               
State hygienist  because they  are carrying an infection, and who               
cannot be  transferred to  another place  of employment, shall be               
paid sickness allowances during the entire period of removal from               
work; these payments shall be calculated only on the basis of the               
compensatory wages which they received in the place of employment               
from which they were removed.                                                   
     When State hygienists enforce regimes in order to confine the              
spread of  an infection in childrens' institutions, and a need for              
child care  arises as a result, allowances shall be payable in the              
same manner  as for  nursing family members, pursuant to part 2 of              
Article 13.                                                                     
                                                                                
     Article 15. Allowances Payable to Inpatients of Prosthetic-                
                 Orthopedic Hospitals                                           
                                                                                
     When an  insured person undergoes treatment in a prosthetic-               
orthopedic hospital,  allowances shall  be payable for the entire               
period of  hospitalization, as  well as  for travel  to and  from               
hospital.                                                                       
                                                                                
     Article 16. Allowances Payable upon Job Transferral                        
                                                                                
     Insured persons  who are temporarily unable to perform their               
work as  the result  of occupational  diseases, tuberculosis,  or               
because they  are carriers  of an  infectious disease  (item 5 of               
Article 6),  but who can perform other work without violating the               
prescribed treatment  and thus, pursuant to medical findings, may               
be transferred  to another  job, shall be paid allowances for the               
entire period  of employment  in the temporary place of work, but               
for no longer than two months, and in such an amount that the sum               
of the  benefit and  the wage at the temporary place of work does               
not exceed the average wage at the original place of work.                      
                                                                                
                                                                                
                            CHAPTER 2                                           
                                                                                
                                                                                
                     2. Maternity Allowance                                     
                                                                                
     Article 17. Maternity Allowance                                            
                                                                                
     Maternity  allowance  shall  be  payable  to  women  insured               
pursuant to  items 1-6  of this  Article from  the  State  Social               
Insurance resources.                                                            
     Maternity allowance shall also be payable to women on child-               
care leave.                                                                     
     Women who  go through  child-birth after  28 weeks or more of              
pregnancy shall  receive allowances for 70 calendar days preceding              
delivery  and  56  calendar  days  after  delivery.  In  cases  of              
complicated  deliveries  or  if  more  than  one  child  is  born,              
allowance shall be payable for 70 calendar days after delivery.  W              
omen who  go through child-birth after 22 weeks of pregnancy shall              
be paid  allowance for  28 calendar  days after  delivery (if  the              
child is  living, allowance  shall be  payable for  56 days  after              
delivery).                                                                      
     Maternity allowance  shall be  paid in  the  amount  of  the               
recipient's full compensatory wage.                                             
     Women who  are dismissed  from work  as the  result  of  the               
liquidation of  an enterprise,  office,  or  organization  during               
pregnancy or  maternity leave  shall be paid maternity allowances               
in the  manner established  in parts  2 and  3 of  this  Article,               
provided that discharge gratuities or wages are not being paid at               
that time.                                                                      
                                                                                
                     3. Child Care Benefits                                     
                                                                                
     Article 18. Child Care Benefits                                            
                                                                                
     Child care  benefits from  State Social  Insurance resources               
shall be payable :                                                              
                                                                                
     1) if  at least one of the parents is insured by State Social              
Insurance pursuant to items 1-6 of Article 4 of this law;                       
     2) if a mother is insured pursuant to items 1-6 of Article 4               
of this  law, and  is dismissed  from work  as the  result of the               
liquidation of  her place  of employment while she is pregnant or               
while she  is on  child-care leave  for a  child under 3 years of               
age.                                                                            
                                                                                
     Article 19. The Length and Amount of Child Care Benefit                    
                 Payments                                                       
                                                                                
     Child care  benefits for  children under  18 months  of  age               
shall be  paid for  each child  in  the  amount  of  the  minimum               
standard of living.                                                             
     Child care  benefits for children between the 18 months and 3              
years of age shall be paid for each child in the amount of half of              
the minimum  standard of living. Child care benefits shall also be              
payable if the recipient is employed.                                           
                                                                                
     Article 20. The Right to Funeral Grant                                     
                                                                                
     Funeral grant  shall be payable upon the death of the insured              
person (Article 4) or his or her dependent.                                     
     Upon the death of the insured person, funeral grant shall be               
payable to  his or  her family  members or  to  the  persons  who               
defraid funeral expenses.                                                       
     Upon  the  death  of  an  insured  person's  family  member,               
benefits shall be payable to the insured person.                                
     Funeral grant  shall not  be payable if funeral expenses are               
defraid by the State or local authorities.                                      
                                                                                
     Article 21. The Amount of Funeral Grants                                   
                                                                                
     Funeral grant  shall be payable in the amount of 3 times the               
minimum standard of living.                                                     
                                                                                
     Article 22. The Payment of Benefits Upon the Death of the                  
                 Eligible Recipient                                             
                                                                                
     Sickness allowance  and maternity  allowance which  are  not               
received by the day of death of the recipient shall be payable to               
the recipient's family members as well as to sick persons who are               
dependents of the recipient.                                                    
     Child care  benefits for children under 3 years of age which               
are not  received by  reason of  death of  the eligible recipient               
shall be  payable to  the living parent or to the guardian of the               
child.                                                                          
     Such benefits  shall not  be ascribed to property subject to               
inheritance.                                                                    
                                                                                
                                                                                
                            CHAPTER 3                                           
                                                                                
                                                                                
              Payments to defray medical treatment                              
                     and prevention expences                                    
                                                                                
     Article 23. Reimbursement of Medical Treatment and                         
                 Prevention Expenses                                            
                                                                                
     Children under 1 year of age of insured persons specified in               
Article 4  of this law, as well as insured persons who lose their               
jobs  with  the  right  to  discharge  gratuity  or  unemployment               
benefits, shall  be reimbursed  for the  cost  of  all  necessary               
medicine and  medical treatment  (according to  an approved list)               
used during  out-patient treatment  from State  Social  Insurance               
resources.                                                                      
     80 percent of the cost of all necessary medicine and medical               
treatment (according to an approved list) used during out-patient               
treatment  shall   be  reimbursed  from  State  Social  Insurance               
resources to:                                                                   
     1) children  between the ages of 1 and 7 of persons specified              
in Article  4 of  this law,  as well as to children of said age of              
insured persons  who lose  their jobs  with the right to discharge              
gratuity or unemployment benefits;                                              
     2) not working pensioners who receive State Social Insurance               
pensions and who are 65 years of age or older;                                  
     3) Group  I and II invalids who are eligible for State Social              
Insurance pension.                                                              
     In case  of an  illness enumerated  in the  official list of               
diseases approved  by the  Ministries of  Health Care  and Social               
Security, the  insured persons specified in Article 4 of this law               
as well as disabled and dependent members of their families shall               
be reimbursed  for the cost of all necessary medicine and medical               
treatment from State Social Insurance resources.                                
     The list  of necessary  medicine and medical treatment shall               
be approved  by the  Ministry of  Health Care and the Ministry of               
Social Security.                                                                
                                                                                
     Article 24. Sanatorium Vouchers                                            
                                                                                
     Expenses  for   sanatorium  vouchers   shall  be  reimbursed               
according to  standard daily  prices  for  sanatorium  treatment.               
These prices  shall be  approved in the manner established by the               
Government of the Republic of Lithuania.                                        
     Sick children  under the age of 7 and invalid children under               
the age  of 16  of insured persons who are specified in Article 4               
of this  law shall  be reimbursed  from  State  Social  Insurance               
resources for  the total  standard cost  of the  entire period of               
treatment in  a sanatorium, provided that they go to a sanatorium               
with a  separate voucher. If they go to a sanatorium with a joint               
voucher (for the child and the insured person), 90 percent of the               
total cost shall be reimbursed.                                                 
     After  being   sent  for   final  treatment  for  a  disease               
enumerated in  the official list of diseases of the Ministries of               
Health Care  and Social  Security, the following persons shall be               
fully compensated  for the standard price of sanatorium treatment               
from State Social Insurance resources:                                          
     1) insured persons specified in items 1-6 of Article 4;                    
     2) persons  who were insured under items 1-6 of Article 4 of               
this law  and who  have lost  their  job,  if  they  are  medical               
treatment was  administered while receiving discharge gratuity or               
sickness allowance granted during the period of employment;                     
     3) persons receiving State Social Insurance pension;                       
     4) dependents  of persons  specified in  items 1-3  of  this               
Article.                                                                        
     In other cases, persons specified in items 1-6 of Article 4                
shall be eligible for reimbursement of 50 percent of the standard               
daily cost  of sanatorium  treatment from  the resources of State               
Social  Insurance   ,  whereas  persons  receiving  State  Social               
Insurance pensions  shall be  eligible for  reimbursement  of  80               
percent of the standard cost.                                                   
                                                                                
     Article 25. Reimbursement for Unpaid Vacations of Blood-                   
                 Donors                                                         
                                                                                
     Blood-donors  who   give   blood   gratuitously   shall   be               
compensated in  the amount of the average wage of 3 days from the               
resources of  the State  Social Insurance.  Blood-donors who  are               
paid to  give blood  shall be  compensated for  an average  2-day               
wage.                                                                           
                                                                                
     Article 26. Reimbursement for Transportation Expenses                      
                                                                                
     Insured persons  specified in items 1-6 of Article 4 who are               
entitled to acquiring a special car by the appropriate invalidity               
examination commissions,  shall be compensated for transportation               
expenses in  the amount  of 75  percent of  the  minimum  monthly               
standard of living, regardless of whether they have acquired such               
a car or not.                                                                   
                                                                                
     Article 27. Conditions Under Which Medical Treatment and                   
                 Prevention Shall not be Reimbursed                             
                                                                                
     Insured persons  shall lose  the right  to compensation from               
the  resources  of  the  State  Social  Insurance,  specified  in               
Articles 23-26 in cases defined in Article 12.                                  
                                                                                
                                                                                
                            CHAPTER 4                                           
                                                                                
                                                                                
                 State Social Insurance Finances                                
                                                                                
     Article 28. The State Social Insurance Budget                              
                                                                                
     State Social Insurance finances of the Republic of Lithuania               
shall chiefly  be based on the independent State Social Insurance               
budget of the Republic of Lithuania, which is included in neither               
the State Budget nor local government budgets.                                  
     The budget  of State  Social Insurance  of the  Republic  of               
Lithuania and  its annual  statement shall  be  approved  by  the               
Government of the Republic of Lithuania.                                        
     The  State  Social  Insurance  budget  of  the  Republic  of               
Lithuania shall  be drafted  for a  calendar year.  The budget as               
well as  its annual  statement shall  be made public according to               
the procedure  established by  the Government  of the Republic of               
Lithuania.                                                                      
     The  State  Social  Insurance  budget  of  the  Republic  of               
Lithuania shall  be drafted  and submitted  to the Government for               
approval by the State Social Insurance Council.                                 
     Regulations for  the drafting  and execution  of  the  State               
Social Insurance  budget shall  be approved  by the Government of               
the Republic of Lithuania.                                                      
                                                                                
     Article 29. The Relationship Between the State Social                      
                 Insurance Budget and the State Budget of the                   
                 Republic of Lithuania                                          
                                                                                
     Appropriations from  the State Budget shall be allocated for               
State Social  Insurance if,  as a  result of  laws adopted by the               
Supreme Council  of the  Republic  of  Lithuania,  or  for  other               
unforeseen  reasons,  the  State  Social  Insurance  expenditures               
either increase  or its revenue decreases, while social insurance               
contribution rates rates remain unchanged.                                      
                                                                                
     Article 30. The State Social Insurance Budget Revenue                      
                                                                                
     The revenue  of the  State  Social  Insurance  budget  shall               
consist of:                                                                     
     1) compulsory  State Social  Insurance contributions paid by               
legal and natural persons;                                                      
     2)  the   revenue  of   the  State  Social  Insurance  Board               
activities;                                                                     
     3) appropriations  from the State Budget, allocated pursuant               
to Article 29 of this law.                                                      
                                                                                
     Article 31. State Social Insurance Budget Outlays                          
                                                                                
     State Social Insurance budget outlays shall consist of:                    
     1) State Social Insurance pensions;                                        
     2) State Social Insurance benefits;                                        
     3)  deductions   to  the   employment  fund  in  the  amount               
established by the Government;                                                  
     4)  compensations   for  medical  treatment  and  prevention               
(Articles 23-26);and                                                            
     5)  expenditures   for  the   maintenance  of  State  Social               
Insurance institutions.                                                         
                                                                                
     Article 32. The State Social Insurance Reserve Fund                        
                                                                                
     The State  Social Insurance  reserve fund  shall  be  formed               
within the State Social Insurance budget, and shall consist of an               
amount established  while approving  the State  Social  Insurance               
budget. Its  resources, upon  the decision  of the  State  Social               
Insurance Board, shall be used to defray unforeseen expenditures,               
excepting administrative expenditures.                                          
                                                                                
     Article 33. Working Cash Assets                                            
                                                                                
     Working cash assets shall be created within the State Social               
Insurance budget.  It shall  comprise the  budget surplus, and if               
that is  insufficient, the planned revenue as well. The amount of               
working cash  assets shall  be established  while  approving  the               
State Social Insurance budget.                                                  
     Working   cash assets  shall be used to defray temporary cash              
income deficiencies  and must be restored by the end of the budget              
year.                                                                           
                                                                                
     Article 34. State Social Insurance Contributions                           
                                                                                
     Persons specified in items 1-6 of Article 4 shall pay a part               
of their  State Social Insurance contribution from their personal               
income, while  the remainder  of the contribution shall be met by               
the resources  of the enterprise, office, or organization wherein               
the person is employed. Contributions shall be based on the wage,               
salary or  other income  of the  person, and  shall be calculated               
according to  the Regulations  for the  drafting and execution of               
the State Social Insurance budget.                                              
     Persons specified  in items  7 and  8 of Article 4 shall pay               
State Social  Insurance contributions  based on  the sum of State               
Social Insurance  which they  have declared.  This sum may not be               
less than  the minimum  wage  established  by  the  laws  of  the               
Republic of Lithuania.                                                          
     Persons specified in items 7 and 8 of Article 4 shall not be               
obliged to  pay State  Social Insurance  contributions  if  their               
income subject  to taxation  under the  laws of  the Republic  of               
Lithuania (  calculated before  deducting State  Social Insurance               
contributions) is  less than  the minimum wage established by the               
laws of  the Republic  of Lithuania,  or if  their income  is tax               
exempt according to the lawfully established procedure.                         
     Periods during  which a  person does  not pay  State  Social               
Insurance contributions  shall not  be included  in State  Social               
Insurance periods.                                                              
                                                                                
     Article 35. State Social Insurance Contribution Rates                      
                                                                                
     The  rates   of  the   compulsory  State   Social  Insurance               
contributions shall  be established  by  the  Government  of  the               
Republic of Lithuania.                                                          
     The rates  of State Social Insurance contributions which are               
paid by  persons specified  in Article  4 of  this law from their               
personal income  shall be  established by  the Supreme Council of               
the Republic of Lithuania.                                                      
                                                                                
     Article 36. Procedure for the Payment of State Social                      
                 Insurance Contributions                                        
                                                                                
     State Social Insurance contributions shall be calculated and               
paid to  the State  Social Insurance  budget by  the  payer  (the               
insurer).                                                                       
     Insurers --  enterprises,  institutions,  and  organisations               
wherein insured  persons specified  in items 1-6 of Article 4 are               
employed, shall  calculate, deduct,  and pay contributions to the               
State Social  Insurance budget  from the  income of  said insured               
persons.                                                                        
     The  procedures   and   deadlines   for   the   payment   of               
contributions shall  be provided  for in  the Regulations for the               
drafting and execution of the State Social Insurance budget.                    
                                                                                
     Article 37. Resposibility to State Social Insurance                        
                                                                                
     Legal or  natural persons  through whose  fault State Social               
Insurance institutions  must make  certain insurance payments, or               
whose  actions   harm  State   Social  Insurance  property,  must               
compensate for this damage in the manner established by law.                    
                                                                                
     Article 38. Liability for the Fair Payment of Contributions                
                                                                                
     Persons who  fail to  pay contributions  to the State Social               
Insurance budget  by the due date shall be liable for 0.5 percent               
daily interest until the contributions are paid.                                
     If the  contributions of  the insurer and persons insured by               
them are  not transferred  into the State Social Insurance budget               
on time,  State Social  Insurance institutions  shall recover the               
premiums from  legal persons  without suing  for claims, and from               
natural persons, in court.                                                      
     If contributions  are reduced  unlawfully, the  total sum by               
which the  contribution s  were reduced  and the penalty equal to               
this sum  doubled  shall  be  recovered  into  the  State  Social               
Insurance budget.  The unpaid sum and the penalty shall be sought               
from legal  persons without  suing for  claims, and  from natural               
persons in  court, but  only  for  a  period  not  exceeding  the               
preceding 2 years.                                                              
                                                                                
                                                                                
                            CHAPTER 5                                           
                                                                                
                                                                                
            Administration of state social insurance                            
                                                                                
     Article 39. The Administrative System of State Social                      
                 Insurance                                                      
                                                                                
     The administrative  system of  State Social Insurance in the               
Republic of Lithuania shall consist of:                                         
     1) the  Ministry of  Social  Security  of  the  Republic  of               
Lithuania;                                                                      
     2)  institutions   authorised  to   implement  State  Social               
Insurance;                                                                      
     3) the insurers.                                                           
                                                                                
     Article 40. The State Social Insurance Council                             
                                                                                
     The State  Social Insurance  Council  shall  be  established               
under the Ministry of Social Security.                                          
     The Council  shall comprise the Minister of Social Security,               
one  representative   of  the   Ministry  of   Health  Care,  one               
representative of the Ministry of Finance, two representatives of               
institutions authorised  to implement State Social Insurance, and               
no more than three representatives of associations supporting the               
interests of the insured and the insurers.                                      
     The members  of  the  Council  shall  be  appointed  by  the               
Government, on  the recommendation  of  the  Minister  of  Social               
Security.                                                                       
     The State Social Insurance Council shall:                                  
     1) establish the prospective and current objectives of State               
Social Insurance;                                                               
     2) submit  proposals to  the Government concerning the rates               
of State Social Insurance contributions;                                        
     3) draft  the State Social Insurance budget and submit it to               
the Government for approval;                                                    
     4) approve  the norms  of State Social Insurance institution               
personnel;                                                                      
     5) resolve  other issues  prescribed by  the Regulations  of               
social insurance institutions.                                                  
                                                                                
     Article 41. Institutions Authorised to Implement State                     
                 Social Insurance                                               
                                                                                
     The Ministry of Social Security shall authorise:                           
     1) the  State Social Insurance Board to organise and conduct               
State Social Insurance throughout the Republic of Lithuania;                    
     2) other institutions to implement State Social Insurance.                 
                                                                                
     Article 42. The State Social Insurance Board                               
                                                                                
     The State  Social Insurance  Board shall be a nonprofit State              
institution which shall:                                                        
     1) implement  the  State  Social  Insurance  budget  of  the               
Republic of Lithuania;                                                          
     2) delegate  the execution  of State  Social Insurance to the              
insurers;                                                                       
     3) conclude  agreements with  other institutions  which  are               
authorised to implement State Social Insurance;                                 
     4)  be   responsible  for   timely  provision  of  insurance               
protection prescribed by this law;                                              
     5)  carry   out  other   activities  provided   for  in  the               
Regulations of social insurance institutions.                                   
     The Board  shall be  directed by  the State Social Insurance               
Council.                                                                        
     The director  of the  Board shall  be appointed by the State               
Social Insurance Council.                                                       
     The Board  shall function according to the Regulations of the              
State Social Insurance institutions.                                            
                                                                                
     Article 43. Local Institutions of the State Social Insurance               
                 Board                                                          
                                                                                
     Local departments  of the State Social Insurance Board shall               
be established  in rural areas and towns, which shall be directly               
responsible for:                                                                
     1) the collection of State Social Insurance contributions;                 
     2) timely and accurate pension payment;                                    
     3) executing  other functions provided by the Regulations of               
State Social Insurance institutions.                                            
     The State  Social Insurance  Board and the local departments               
thereof are  legal persons and shall have the seal with the State               
emblem of the Republic of Lithuania.                                            
                                                                                
     Article 44. The Duties of the Insurers                                     
                                                                                
     Insurers  who   have   to   pay   State   Social   Insurance               
contributions on behalf of insured persons specified in items 1-6               
of Article  4 of this law, as well as persons enumerated in items               
7 and  8 of  Article 4,  must register  themselves with the local               
departments of the State Social Insurance Board.                                
     The  insurers  shall  be  responsible  for  the  timely  and               
accurate calcualtion  and payment of contributions into the State               
Social Insurance budget.                                                        
     The insurers shall pay the State Social Insurance benefits to              
the insured  according to  the procedures  provided by  the  State              
Social Insurance Benefit Regulations.                                           
                                                                                
     Article 45. The Right of State Social Insurance Institutions               
                 to Exert Control                                               
                                                                                
     State Social  Insurance institutions authorised to implement               
State  Social  Insurance  shall  have  the  right  to  check  the               
documents on which the contributions and payments administered by               
them are based.                                                                 
     While exercising  State Social Insurance control, officers of              
State Social Insurance institutions shall have the rights provided              
for in  Article 4  of the  Law of the Republic of Lithuania on the              
State Tax Inspectorate.                                                         
     Claims of  the insurers  and of  the insured  concerning the               
actions of  officers of  State Social  Insurance institutions who               
are exerting  control shall  be resolved by head (or deputy head)               
of the  appropriate  institution,  while  claims  concerning  the               
actions of  the latter  officers shall  be resolved  by the State               
Social Insurance  Board. Applicant who disagree with the decision               
of the  Board shall  have the  right to appeal to court within 10               
days.                                                                           
                                                                                
     Article 46. The Settlement of Disputes Arising from Legal                  
                 Relations of State Social Insurance                            
                                                                                
     Disputes  between   insurers  and   State  Social  Insurance               
institutions shall  be settled  by  the  State  Social  Insurance               
Board, the State Arbitration, or the court.                                     
     Disputes between  the insured  and  the  insurers  or  State               
Social Insurance  institutions concerning  pensions, benefits, or               
other means  of insurance protection shall be settled pursuant to               
the law on pensions as well as other laws, and in accordance with               
the procedures provided for in the State Social Insurance Benefit               
Regulations.                                                                    
                                                                                
                                                                                
Vytautas Landsbergis                                                            
President                                                                       
Supreme Council                                                                 
Republic of Lithuania                                                           
                                                                                
                                                                                
Vilnius                                                                         
21 May 1991                                                                     
No. I-1336