Act No. 170 / 2018 Coll.
Insurance and reinsurance distribution law
Valid
Effective from 01.12.2018
Contents
ČÁST PRVNÍ
§ 1
§ 2
§ 3
ČÁST DRUHÁ
HLAVA I
§ 5
HLAVA II
§ 6
§ 7
§ 8
§ 9
§ 10
§ 11
§ 12
§ 13
§ 13a
§ 14
HLAVA III
§ 15
§ 16
§ 17
§ 18
§ 19
§ 20
§ 21
§ 22
§ 23
HLAVA IV
§ 24
§ 25
§ 26
§ 27
§ 28
§ 29
§ 30
§ 31
§ 32
HLAVA V
Díl 1
§ 33
§ 34
§ 35
Díl 2
§ 36
§ 37
§ 38
§ 39
ČÁST TŘETÍ
§ 40
§ 41
§ 42
§ 43
§ 44
§ 45
§ 46
ČÁST ČTVRTÁ
§ 47
§ 48
§ 49
§ 50
§ 51
§ 52
§ 53
§ 54
ČÁST PÁTÁ
§ 55
§ 56
§ 57
§ 58
§ 59
§ 60
§ 61
§ 62
§ 63
§ 64
§ 65
§ 66
§ 67
§ 67a
§ 68
§ 69
§ 70
ČÁST ŠESTÁ
HLAVA I
§ 71
§ 72
§ 73
§ 74
§ 75
§ 76
§ 77
§ 78
§ 79
§ 80
§ 81
HLAVA II
Díl 1
§ 82
Díl 2
§ 83
§ 84
§ 85
§ 86
§ 87
§ 88
Díl 3
§ 89
HLAVA III
§ 90
§ 91
§ 92
§ 93
ČÁST SEDMÁ
HLAVA I
§ 94
§ 95
HLAVA II
§ 96
§ 97
HLAVA III
§ 98
§ 99
§ 100
§ 101
§ 102
§ 103
HLAVA IV
§ 104
§ 105
§ 106
ČÁST OSMÁ
§ 107
§ 108
§ 109
§ 110
§ 111
§ 112
§ 113
§ 114
§ 115
§ 116
§ 117
§ 118
ČÁST DEVÁTÁ
§ 119
§ 120
§ 121
§ 122
§ 123
ČÁST DESÁTÁ
§ 124
§ 125
§ 126
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170
THE LAW
of 26 July 2018
on insurance and reinsurance distribution
Parliament has decided on this law of the Czech Republic:
GENERAL PROVISIONS
Subject matter
This law implements the relevant provisions of the European Union1) and provides for
(a) the activities of persons authorised to provide insurance or reinsurance, including those of persons abroad;
(b) rights and obligations in the distribution of insurance or reinsurance; and
(c) the competence of the administrative authorities in the field of insurance or reinsurance distribution.
Definition of terms
(1) For the purposes of this Act:
(a) distribution of insurance provision or insurance mediation;
(b) distribution of collateral or brokerage;
(c) by providing insurance for the conduct of the insurer on his own behalf, consisting of:
1. offering the possibility to negotiate, change or terminate insurance, including matching insurance,
2. submission of proposals for the negotiation, modification or termination of insurance;
3. the implementation of further preparatory work towards the negotiation, modification or termination of insurance, including the provision of recommendations leading to the negotiation, modification or termination of insurance; or
4. the negotiation or change of insurance,
(d) by providing for the conduct of the reinsurer in its own name, which consists of:
1. offering the possibility to negotiate, amend or terminate collateral, including matching collateral;
2. submission of proposals for the negotiation, amendment or termination of collateral;
3. the implementation of further preparatory work towards the negotiation, modification or termination of the collateral, including the provision of recommendations leading to the negotiation, modification or termination of the collateral; or
4. the negotiation or change of collateral;
(e) by brokering insurance on behalf of the insurer, different from the provision of insurance, conduct on behalf of the customer or conduct of the policyholder, which consists of:
1. offering the possibility to negotiate, change or terminate insurance, including matching insurance,
2. submission of proposals for the negotiation, modification or termination of insurance;
3. the implementation of further preparatory work towards the negotiation, modification or termination of insurance, including the provision of recommendations leading to the negotiation, modification or termination of insurance,
4. the conclusion or change of insurance; or
5. assistance in the management of insurance and in the application of insurance rights,
(f) by brokering in the name of the reinsurer or the customer different from the provision of the collateral which consists of:
1. offering the possibility to negotiate, amend or terminate collateral, including matching collateral;
2. submission of proposals for the negotiation, amendment or termination of collateral;
3. the implementation of further preparatory work towards the negotiation, modification or termination of collateral, including the provision of recommendations leading to the negotiation, modification or termination of collateral;
4. the negotiation or change of collateral; or
5. assist in the management of collateral and in the exercise of collateral rights;
(g) Member State of the European Union or other Contracting State of the Agreement on the European Economic Area,
(h) details of the person
1. in the case of a natural person in business, the name, address, date of birth and identification number of the person, if assigned; in the case of a natural person established in a Member State other than a Member State, unless he is a citizen of a Member State or a family member of the Czech Republic under the Law on the residence of foreigners in the Czech Republic,
2. in the case of a legal person, the name, address of the registered office, identification number of the person, if assigned; in the case of a legal person established in a non-Member State, the address of the branch of a business establishment located in the Czech Republic,
(i) by an insurance intermediary who, as an entrepreneur, mediates insurance or reinsurance;
(j) the represented insurance undertaking, reinsurance undertaking, separate intermediary or insurance intermediary with a home Member State other than the Czech Republic, with which the tied agent or supplementary insurance intermediary has a contract under which it mediates insurance or reinsurance,
(k) a worker is a person who is in employment with an insurance undertaking, reinsurance undertaking or insurance intermediary, or a member of the statutory body of an insurance undertaking, reinsurance undertaking or insurance intermediary, or any other person of similar scope or of a procuritor, if they are directly involved in the distribution of insurance or reinsurance or are responsible for the distribution of insurance or reinsurance;
(l) by the customer interested in insurance or reinsurance, the policyholder or the reinsurer,
(m) life insurance under the Insurance Act,
(n) life insurance reserves which allow the creation of a prescribed capital buffer which may be paid in whole or in part to the beneficiary;
(o) expert group
1. distribution of life insurance,
2. distribution of insurance of damage to land vehicles other than railway vehicles and liability insurance arising from the operation of the land motor vehicle and its trailer, including additional insurance of accidents;
3. the distribution of non-life insurance, with the exception of the activities referred to in point 4 or 5;
4. the distribution of non-life insurance related to the business of the client, with the exception of the activities referred to in point 5;
5. distribution of insurance of large insurance risks,
6. distribution of collateral,
7. insurance intermediation by the policyholder,
(p) the home Member State of the Member State in which the insurance intermediary has its registered office or residence and in which it has been authorised to operate;
(q) the host Member State is a Member State different from the home Member State in which the insurance intermediary has a branch or in which it mediates insurance or reinsurance under the freedom to provide temporary services,
(r) close interconnection of close links under the Insurance Act;
(s) remuneration of commission, remuneration, other payment, including financial or non-financial benefit, or other incentive offered or provided in relation to the distributed insurance, for the entire duration of the insurance.
(2) For the purposes of this Act, insurance intermediary means:
(a) by a customer interested in insurance and insured;
(b) by the conclusion, modification or termination of insurance, of legal proceedings leading to the creation, modification or termination of the rights and obligations of the insured.
(3) For the purposes of Articles 3 (2) (b), 7 (d), 50 (3) (a), 54 (3) to (5), 77 (3), 79 (3) (b), 84 (c) and (i), 89 (2) and 115 (1), insurance premiums shall be considered as insurance premiums.
Exemptions from the scope of the law and restrictions on its scope
(1) This law shall not apply to:
(a) simply providing general information on insurance or reinsurance or similar information on insurance undertakings, reinsurance undertakings or insurance intermediaries, provided that the purpose of such activity is not to facilitate the negotiation or change of insurance or reinsurance or the performance thereof;
(b) the distribution of insurance, where the insurer is a person who does not carry on his business as an entrepreneur or a person whose activity is excluded from the scope of the Insurance Act;
(c) the comparison of insurance, provided that it does not permit the conclusion or change of insurance;
(d) the provision of information and advice in the course of the activity of the person authorised to perform the lawyer under the law governing the conduct of the lawyer or notary under the law governing the activities of notaries; and
(e) the liquidation of claims.
(2) For insurance intermediation by a person who mediates only an insurance that is an ancillary service to the goods or services supplied to him only as an ancillary activity and is not at the same time a bank, a foreign bank, a savings and credit cooperative, a securities dealer or a foreign person authorised to provide investment services, only Articles 1, 2, 31, 52, 55 (2), 71 to 75, § 77, § 83 (a) to (c), § 84 (a) to (e), 87, 90, 91 and § 92 (1) shall apply if:
(a) insurance covers:
1. defects, damage or loss of goods supplied by that person;
2. non-use or defects of the service provided by that person;
3. damage or loss of luggage; or
4. other travel-related claims; and
(b) the amount of premiums for one insurance shall not exceed:
1. on a pro rata annual basis, an amount equivalent to EUR 600; or
2. an amount equivalent to EUR 200 where the duration of such insurance, including its extension, does not exceed 3 months.
PERSONS AUTHORISED TO INSURANCE OR INSURANCE
BASIC PROVISIONS
Authorisation to mediate insurance or reinsurance
(1) The intermediary of insurance or reinsurance as an entrepreneur may only:
(a) an independent intermediary (§ 6);
(b) tied agent (§ 15),
(c) the supplementary insurance intermediary (§ 24); or
(d) an insurance intermediary with a home Member State other than the Czech Republic (§ 33).
(2) An insurance undertaking may also mediate insurance as an entrepreneur; a reinsurance undertaking may also mediate collateral as an entrepreneur. The provisions of this Act concerning a separate intermediary shall apply mutatis mutandis to insurance or reinsurance undertakings, with the exception of Sections 6 to 11, Sections 13, 36 to 46, Sections 96 to 103, Sections 105, 109 (1) (a) to (c) and 120 (4) to (6).
(3) The insurance intermediary may only mediate insurance as a policy holder if it is not a reserve insurance and if:
(a) insurance is related to:
1. the goods or services sold in the course of the business of the policy holder or business of another connected person, in particular as regards the insurance of the ability to repay;
2. the membership of a person insured in a pet or professional association,
3. the employment, service or other similar relationship insured to the policyholder; or
4. the cultural, sports or other similar activities of the policy holder;
(b) have the matters covered by the insurance of the same owner;
(c) are insured and the policyholder is part of the same group; or
(d) the insurance covers:
1. defects, damage or loss of goods supplied by the policyholder;
2. non-use or defects of the service provided by the policyholder;
3. damage or loss of luggage; or
4. other insurance claims related to travel.
AUDIENCE AND CORRECTION
Separate intermediary
For the purposes of this Act, a separate intermediary shall mean one who is entitled to mediate insurance or reinsurance on the basis of an authorisation to act as a separate intermediary granted by the Czech National Bank.
Conditions for granting an activity authorisation
The Czech National Bank shall authorise the activity of a separate intermediary to the applicant if:
(a) it has its registered office in the Czech Republic;
(b) is credible; where the applicant is a legal person, the credibility is demonstrated by a member of the statutory body or by another person of similar scope; the condition of credibility must also be fulfilled by the controlling person (2) of the applicant who is a legal person,
(c) is competent; where the applicant is a legal person, the competence is demonstrated by a member of the statutory body or by another person having similar powers, provided that such persons actually manage or are required to be responsible for the distribution of insurance or reinsurance;
(d) it fulfils the conditions set out in Article 13 and, if the applicant is entitled to receive insurance premiums, to facilitate the payment of insurance premiums or other insurance benefits, the conditions set out in Article 54 (3);
(e) the details of the applicant's person in the application enable the applicant to be identified in the relevant basic register;
(f) under this law is not a separate intermediary, tied agent, supplementary insurance intermediary or insurance intermediary with a home Member State other than the Czech Republic;
(g) the close connection of the applicant with another person or the direct or indirect share of another person in excess of 10% of the voting rights or capital of the applicant does not prevent or impede the effective exercise of supervision over a separate intermediary; in the case of close links with a person who has his head office or his head office in a State which is not a Member State, or the direct or indirect share of that person exceeding 10% in the applicant's voting rights or capital, the legal order of that State and the manner in which it is applied, including the enforceability of the right, shall not prevent the effective exercise of supervision over a separate intermediary.
Procedure for the application for authorisation to operate
(1) An application for authorisation to act as a separate intermediary may be submitted only electronically. The application shall include, in addition to the formalities laid down in the administrative rules, information on the fulfilment of the conditions for the operation of the activity of a separate intermediary laid down by this Law and on the communications of persons closely linked to the applicant, or having a direct or indirect share exceeding 10% in the applicant's voting rights or capital and the amount of such a share. The application shall be accompanied by documents certifying compliance with these conditions.
(2) If the Czech National Bank complies with the request in full, it will register a separate intermediary. The decision shall not be drawn up in writing. The decision shall become final at the time of the entry of the independent intermediary into the register. The Czech National Bank shall inform the applicant without delay of the entry of a separate intermediary in the register.
(3) The details of the particulars of the application, including the annexes certifying compliance with the conditions for the operation of the independent intermediary provided for in this Act, its formats and other technical specifications shall be laid down in the implementing legislation.
Duration and extension of the authorisation
(1) The authorisation to act as a separate intermediary shall continue until the end of the calendar year following the calendar year in which the separate intermediary was registered.
(2) The Czech National Bank shall extend the authorisation to operate to a separate intermediary by a further 12 months after payment of the administrative fee. The Czech National Bank shall immediately acknowledge the payment of the administrative fee to the independent intermediary.
Notification of amendments
(1) The independent intermediary shall notify the Czech National Bank without undue delay that there has been a change in the facts which, pursuant to Article 7, are a condition for the granting of authorisation for the activity of a separate intermediary.
(2) The notification is made via the electronic application of the Czech National Bank for the registration of entities. The notification shall contain, in addition to the procedural requirements laid down in the administrative rules, the particulars and documents relating to the change of the data.
(3) The obligation referred to in paragraph 1 shall not apply to changes to the data kept in the basic registers as reference data.
Decommissioning
(1) The authorisation to act as a separate intermediary is hereby withdrawn
(a) the death of a natural person;
(b) the disappearance of a legal person;
(c) by a notice of termination or a later date indicated in that notice as the date of termination;
(d) the expiry of the duration of the authorisation if the authorisation referred to in Article 9 (2) is not extended; or
(e) withdrawal (§ 105).
(2) The notification referred to in paragraph 1 (c) shall be made through the electronic application of the Czech National Bank for the registration of entities.
Insurance agent and insurance broker
(1) A self-employed intermediary who does not act as a policy holder provides insurance on the basis of an authorisation under Section 6 as:
(a) an insurance agent where it mediates insurance for an insurance undertaking; or
(b) an insurance broker where it mediates insurance for a customer.
(2) The insurance agent or insurance broker shall conclude a contract with the insurance undertaking or customer for the performance of the activity referred to in paragraph 1, which shall be in writing.
Compulsory insurance
(1) A self-employed intermediary must be insured in the event of an obligation to compensate a customer for damage caused by a breach of one of the obligations of a separate intermediary provided for in this Act, by other legislation to the extent that it relates to the distribution of insurance or reinsurance, and directly applicable European Union provisions in the field of insurance or reinsurance distribution, with an insurance performance limit of at least EUR 1 300 380 per insurance event and at least EUR 1 924 560 in the case of multiple claims in one year, unless the directly applicable European Union law issued pursuant to Directive (EU) 2016 / 97 does not provide otherwise.
(2) The insurance referred to in paragraph 1 shall be negotiated with an insurance undertaking having its head office in a Member State or with an insurance undertaking having its head office in a Member State other than a Member State which is subject to supervision comparable to that of the Czech National Bank and shall be arranged in such a way that the participation, if agreed, does not exceed the higher of the limit of CZK 5,000 or 1% of the amount of the insurance benefits.
Liability for the offence
A person whose conduct is attributable to a separate intermediary who is a policy holder shall also be considered to be another independent intermediary used in his activity to assess the liability for the offence of that separate intermediary. This is without prejudice to liability for the misdemeanor of another separate intermediary used by an individual intermediary that is a policy holder in its activities.
Compensation for damage caused by a separate intermediary
(1) Where an insurance or reinsurance undertaking uses a separate intermediary in its activity, it shall not reimburse the damage caused by it; However, if he has been chosen uncarefully or inadequately supervised, he shall be liable for the fulfilment of his obligation to make good the damage.
(2) Where a self-employed intermediary who is a policy holder, in its activities as another independent intermediary, makes up for the damage caused by it as if it had caused it itself. The insurance undertaking shall not cover such damage; However, where a separate intermediary who is a policy holder has been uncarefully selected or inadequately supervised, he shall be liable for the performance of his obligation to make good the damage.
TIED REPRESENTATIVES AND ITS CORRECTION
Binding agent
(1) For the purposes of this Act, the tied agent shall be the one who is entitled to mediate insurance or reinsurance on the basis of the registration of the tied agent in the register.
(2) The tied agent shall enter into an insurance or reinsurance mediation activity under the authorisation referred to in paragraph 1 with the represented contract, which shall take a written form. The contract may be concluded with only one represented.
Registration
(1) The Czech National Bank shall register the tied agent on the basis of a notification pursuant to Article 17 submitted to the representative if:
(a) the information given in the notification allows the identification of the person mentioned in the notification in the relevant basic register; and
(b) whoever intends to operate as a tied agent is not under this law a separate intermediary, tied agent, supplementary insurance intermediary or insurance intermediary with a home Member State other than the Czech Republic.
(2) The Czech National Bank shall register the tied agent without delay and no later than 5 working days after the date of notification.
(3) The Czech National Bank shall inform the represented without delay of the entry of the tied agent in the register or of the failure to register and of the reason for the failure to register the Czech National Bank by electronic means; the provisions of the Act governing electronic operations and the authorised conversion of documents concerning delivery via a data box shall not apply. If the Czech National Bank does not agree to the failure to register, the Czech National Bank shall, upon request, issue a decision which is the first action in the proceedings.
Notification of tied agent
(1) Only such tied agent may be notified by the representative,
(a) which has its registered office in the Czech Republic;
(b) whose close links with another person or the direct or indirect share of another person exceeding 10% of the voting rights or capital of the tied agent do not prevent or impede the effective exercise of supervision of the tied agent; in the case of close links with a person having his head office or his head office in a State which is not a Member State, or the direct or indirect share of such person exceeding 10% in the voting rights or capital of a tied agent, the legal order of that State and the manner in which it is applied, including the enforceability of the right to prevent the effective exercise of supervision of the tied agent; and
(c) which fulfils the conditions for the activity of the tied agent laid down by this law.
(2) The tied agent notification referred to in paragraph 1 shall be made by electronic application of the Czech National Bank for the registration of entities.
(3) The notification shall include, in addition to the procedural requirements laid down in the Rules of Procedure, the following:
(a) details of the person who intends to pursue the activity of the tied agent;
(b) the subject matter of the activity under this Act, broken down by group of expertise;
(c) a declaration that the tied agent fulfils the conditions for carrying out the activity under this law; and
(d) a communication by which persons are closely linked to the tied agent or have a direct or indirect share exceeding 10% in the voting rights or capital of the tied agent and the amount of such share.
Establishment, duration and extension of the authorisation
(1) The authorisation to act as a tied agent is established by the entry of the tied agent in the register.
(2) In case a person is notified as a tied agent by more than one representative, the Czech National Bank will be entered in the register for the representative who first notified the person.
(3) The authorisation for the activity of the tied agent is valid until the end of the calendar year following the calendar year in which the registration was carried out.
(4) The Czech National Bank will extend its authorisation to operate as a tied agent by a further 12 months after payment of the administrative fee. The Czech National Bank shall immediately confirm the payment of the administrative fee to the representative.
(5) The Czech National Bank will be notified simultaneously with the payment of the administrative fee by the Czech National Bank via the electronic application of the Czech National Bank for the registration of entities whose tied representatives are entitled to extend on the basis of the administrative fee paid.
Termination of representation
Contents
ČÁST PRVNÍ
§ 1
§ 2
§ 3
ČÁST DRUHÁ
HLAVA I
§ 5
HLAVA II
§ 6
§ 7
§ 8
§ 9
§ 10
§ 11
§ 12
§ 13
§ 13a
§ 14
HLAVA III
§ 15
§ 16
§ 17
§ 18
§ 19
§ 20
§ 21
§ 22
§ 23
HLAVA IV
§ 24
§ 25
§ 26
§ 27
§ 28
§ 29
§ 30
§ 31
§ 32
HLAVA V
Díl 1
§ 33
§ 34
§ 35
Díl 2
§ 36
§ 37
§ 38
§ 39
ČÁST TŘETÍ
§ 40
§ 41
§ 42
§ 43
§ 44
§ 45
§ 46
ČÁST ČTVRTÁ
§ 47
§ 48
§ 49
§ 50
§ 51
§ 52
§ 53
§ 54
ČÁST PÁTÁ
§ 55
§ 56
§ 57
§ 58
§ 59
§ 60
§ 61
§ 62
§ 63
§ 64
§ 65
§ 66
§ 67
§ 67a
§ 68
§ 69
§ 70
ČÁST ŠESTÁ
HLAVA I
§ 71
§ 72
§ 73
§ 74
§ 75
§ 76
§ 77
§ 78
§ 79
§ 80
§ 81
HLAVA II
Díl 1
§ 82
Díl 2
§ 83
§ 84
§ 85
§ 86
§ 87
§ 88
Díl 3
§ 89
HLAVA III
§ 90
§ 91
§ 92
§ 93
ČÁST SEDMÁ
HLAVA I
§ 94
§ 95
HLAVA II
§ 96
§ 97
HLAVA III
§ 98
§ 99
§ 100
§ 101
§ 102
§ 103
HLAVA IV
§ 104
§ 105
§ 106
ČÁST OSMÁ
§ 107
§ 108
§ 109
§ 110
§ 111
§ 112
§ 113
§ 114
§ 115
§ 116
§ 117
§ 118
ČÁST DEVÁTÁ
§ 119
§ 120
§ 121
§ 122
§ 123
ČÁST DESÁTÁ
§ 124
§ 125
§ 126
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Regulation Information
| Citation | Act No. 170 / 2018 Coll., on insurance and reinsurance distribution |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 16.08.2018 |
|---|---|
| Effective from | 01.12.2018 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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