Decree No. 195 / 2018 Coll.
Certificate of professional competence for insurance distribution
Valid
Effective from 01.12.2018
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195
DECLARATION
of 30 August 2018
on professional competence for insurance distribution
The Czech National Bank provides pursuant to § 124 of Act No. 170 / 2018 Coll., on the distribution of insurance and reinsurance ("the Act ') for the implementation of § 57 (2), § 58 (6) and § 62 (3) of the Act:
Subject matter
This decree regulates
(a) the extent of professional knowledge and skills by group of expertise for insurance distribution;
(b) the duration of the professional examination, the number and form of the examination questions, the method of determining the correct answers, the criteria for the successful completion of the professional examination, the rules for the provision of a set of test questions to accredited persons, their handling and the rules for updating them, the requirements for the test schedule and for the course, the form of the professional examination and the method of its evaluation;
(c) the requirements for the organisation of the applicant for the grant or extension of accreditation, the requirements for the premises used for the organisation of professional examinations, the requirements for technical and programme means for their organisation; and
(d) the manner in which the Commission is to act and the composition, the requirements for its members and the rules on remuneration.
Scope of expertise
(Paragraph 57 (2) of the Law)
(1) The extent of the person's professional knowledge under Paragraph 55 (1) of the Act must correspond to the activity of the person in question for the distribution of the insurance in order to ensure its qualified performance.
(2) The scope of expertise by expert groups is set out in the Annex to this Decree.
Scope of professional skills
(Paragraph 57 (2) of the Law)
Persons under Paragraph 55 (1) of the Act must have professional skills for the distribution of insurance for all professional groups
(a) qualified to obtain information from the customer in such a way that it is possible to carry out a proper analysis in accordance with Section 78 (2) (a) of the Act and to provide, with professional care, advice, personal recommendations and personalised projections of pension benefits in the case of pan-European personal pension products;
(b) to provide information in a qualified and comprehensible manner when communicating with the customer in such a way that the customer can assess himself whether the insurance product offered complies with its requirements, objectives, needs, financial situation, knowledge and experience, risk tolerance, loss-bearing capacity, and to realise the risks to which it may be exposed for the duration of the insurance;
(c) duly assess the customer's requirements, objectives, needs, financial situation, knowledge and experience, customer risk tolerance, customer's ability to bear losses and legal relationships relating to other financial market products and consider the risks to which the customer may be exposed for the duration of the insurance and offer him an appropriate insurance product; and
(d) to properly conclude insurance contracts in the name and on behalf of an insurance undertaking or customer and contracts for a pan-European personal pension product; and
(e) to provide information to the customer in a qualified and comprehensible manner during the duration of the commitment of the Pan-European Personal Pension Product Contract.
Substantial assumptions
(Paragraph 62 (3) of the Law)
(1) The accredited person must have at his disposal premises suitable for conducting professional examinations, with adequate number and capacity of test rooms.
(2) The accredited person must have at his disposal technical and programme means for organising expert examinations and storing documents on the conduct of expert examination1).
Organisational assumptions
(Paragraph 62 (3) of the Law)
(1) The accredited person must have an internal rules of organisation with a proper, transparent, clear and comprehensive definition of the activities and their associated scope and decision-making powers.
(2) The accredited person in the internal rules shall be further adjusted at least:
(a) control and security measures for the processing and recording of information relating to professional examinations;
(b) the rules governing the appointment of the President of the Commission and other members of the Commission; and
(c) the rules on remuneration of a member of the commission, which must not be derived from the success of the professional examinations.
(3) The accredited person shall ensure that at least one commission is set up at the time of professional examinations.
(4) The expert test is conducted under the direct supervision of the Commission.
Personnel assumptions
(Articles 58 (6) and 62 (3) of the Law)
(1) The Commission has an odd number of members and is at least three members.
(2) A member of the Commissionis trusted2) and has completed at least a university education in the Master's study programme3).
(3) Where the accredited person is an insurance or insurance intermediary or is another member of the business group4), of which the accredited person is also a member, the majority of the members of the commission independent of the accredited person, of the business group of which the accredited person is a member and of other members of that business group must be a business group.
Test schedule
(K § 58 (6) of the Act)
(1) The accredited person must have a test schedule which meets at least the following requirements:
(a) an objective and impartial approach for all tested; in the case of overcapacity, the examination of invitations to the test shall be selected in an objective and impartial manner;
(b) proper identification of the tested before the beginning of the professional examination;
(c) ensuring the protection of the personal data of the tested;
(d) the objective and impartial conduct of the professional examination;
(e) the objective and impartial selection of the test variant for a given test term and the method of generating the test test;
(f) confidentiality of the contents of each test variant;
(g) the thematic content of the professional examination;
(h) verifiable recording of the result of the expert examination and its verification by the commissions;
(i) the possibility and procedure for the appeal and examination of the outcome of the professional examination; and
(j) the possibility for the test subject to be consulted and copies of the test report or test report.
(2) The test schedule shall include at least:
(a) the development of the requirements referred to in paragraph 1 in specific procedures and model documentation;
(b) rules on the setting and publication of test dates; the accredited person shall ensure that at least one test date is held on a quarterly basis if at least 10 tested persons do not apply for that period, at least half-yearly,
(c) the content and scope of the professional examination;
(d) the number of members of the Commission and their decision-making methods;
(e) rules on the exclusion of the tested person from the professional examination and the possibility of reviewing the decision which excluded the tested person;
(f) an indication of the amount of remuneration associated with the professional examination;
(g) indicating whether the professional examination is written, oral or combined;
(h) rules governing the procedure for the prejudice of a member of the Commission; and
(i) rules governing the check-out and non-participation of the tested person.
Minimum standard of professional examination
(K § 58 (6) of the Act)
(1) The professional test for the distribution of damage insurance for land vehicles other than railway vehicles and liability insurance resulting from the operation of the land motor vehicle and its trailer, including additional insurance for accidents (hereinafter referred to as motor vehicle insurance), takes a total of 90 minutes. A total of 40 test questions intended to check the expertise are asked. The skills tested shall be reviewed by 2 case studies; each of them contains 5 test questions aimed at demonstrating skills in accordance with Section 3.
(2) The professional examination for the distribution of life insurance or for the distribution of non-life insurance within the scope of Paragraph 57 (1) (c) of the Act ("non-life insurance") takes a total of 120 minutes. A total of 52 test questions intended to check the expertise are asked. The skills tested shall be reviewed by 3 case studies; each of them contains 5 test questions aimed at demonstrating skills in accordance with Section 3.
(3) The professional test for the distribution of insurance related to the business activities of a customer to the extent provided for in Section 57 (1) (d) of the Act ("non-life insurance of entrepreneurs") takes a total of 135 minutes. A total of 60 test questions intended to check the expertise shall be submitted to the test. The skills tested shall be reviewed by 3 case studies; each of them contains 5 test questions aimed at demonstrating skills in accordance with Section 3.
(4) The technical examination for the distribution of insurance against large insurance risks takes a total of 150 minutes. A total of 72 test questions for examination of expertise are submitted to the test. The skills tested shall be reviewed by 3 case studies; each of them contains 5 test questions aimed at demonstrating skills in accordance with Section 3.
(5) The technical examination for both distribution of motor insurance and distribution of life insurance takes a total of 135 minutes. The test subject shall be asked 32 test questions intended to check the expertise for the distribution of motor insurance and 28 test questions intended to check the expertise for the distribution of life insurance referred to in point II of the Annex to this Regulation. 3 case studies are examined with 1 case study from motor insurance and 2 case studies from life insurance. Each case study contains 5 test questions aimed at demonstrating skills.
(6) The professional examination for the distribution of any non-life insurance under § 57 (1) (c), (d) or (e) of the Act and for the distribution of life insurance takes a total of 180 minutes. 52 test questions intended to check the professional knowledge of the non-life insurance in question and 28 examination questions intended to check the professional knowledge for the distribution of life insurance referred to in point II of the Annex to this Decree shall be submitted to the test. The skills of the tested are reviewed by 4 case studies, with 2 case studies from non-life insurance and 2 case studies from life insurance. Each case study contains 5 test questions aimed at demonstrating skills.
(1) Each of the test questions has four possible alternative responses. Three quarters of test questions intended to check the expertise and all test questions intended to test skills have one correct response option. One quarter of the test questions intended to check the expertise shall have one or more correct answers; any incorrectly selected response option makes the entire test question incorrectly answered. The correct answers, which have one correct response option, are evaluated by one point and the correct answers, which have one or more correct answers, and the questions from the professional skills range are evaluated by two points.
(2) In order to pass the professional examination successfully, the tested shall obtain at least the following:
(a) three quarters of the available points of all test questions;
(b) three fifths of the points attainable from test questions concerning expertise; and
(c) three fifths of attainable points from test questions concerning professional skills.
Rules for updating, providing and handling issues to accredited persons
(K § 58 (6) of the Act)
(1) A set of test questions shall be updated at least annually. The number of test questions prepared to check the expertise shall not fall below 1,200 on updating, the number of case studies below 80. The professional examinations may be organised according to the text of the pre-update question file no more than a month from the date of publication of this update by the Czech National Bank, unless the Czech National Bank provides for a longer deadline with regard to the scope of the update.
(2) A set of test questions with correct answers is published by the Czech National Bank on its website. A set of test questions with correct answers will be sent by the Czech National Bank to the accredited person by a data box every time it has changed.
(3) The accredited person creates individual test variants shortly before the professional examination. The order of correct answers for each test question shall be set at random for each test variant. Each tested shall receive their own test variant. The accredited person shall carry out all necessary measures to conceal each test variant.
Repeal
They shall be deleted:
1. Decree No. 582 / 2004 Coll., implementing certain provisions of the Act on Insurance Intermediaries and Insurance Liquidators.
2. Decree No. 40 / 2006 Coll., amending Decree No. 582 / 2004 Coll., implementing certain provisions of the Act on Insurance Intermediaries and Insurance Liquidators.
3. Decree No. 251 / 2007 Coll., amending Decree No. 582 / 2004 Coll., implementing certain provisions of the Act on Insurance Intermediaries and Insurance claims liquidators, as amended by Decree No. 40 / 2006 Coll.
4. Decree No. 74 / 2010 Coll., amending Decree No. 582 / 2004 Coll., implementing certain provisions of the Act on Insurance Intermediaries and Insurance Liquidators, as amended.
Efficacy
This Decision shall enter into force on 1 December 2018.
Governor:
Ing. Rusnok v. r.
Annex to Decree No 195 / 2018 Coll.
Scope of expertise
I. Common thematic areas of the necessary expertise:
(a) professional minimum on the financial market
1. the financial market, its definitions, role and importance;
2. the foundations of finance theory (time value of money, relationship between yield, risk and liquidity),
3. the foundations of financial mathematics,
4. the principles of the calculation of premiums,
(b) the structure, entities and functioning of the insurance sector;
1. the insurance market, its definitions, role and importance,
2. principles of insurance and reinsurance, characteristics of life and non-life insurance under the Insurance Act, compulsory insurance,
3. the characteristics of the private policy governing insurance (in particular insurance such as liability, insurance interest, income and loss insurance, insurance, fundamental rights and obligations of the insurer and policy holder, establishment, duration and termination of insurance, limitation period),
4. insurance undertakings, reinsurance undertakings and insurance intermediaries;
5. the activity of separate claims liquidators;
6. upper limit of premiums (insurance amount, limit of premiums), participation,
7. basic terms in insurance and insurance,
8. the rules for dealing with customers under the law, directly applicable European Union regulations and the Civil Code,
9. The foundations of the related civil law, commercial law and consumer protection laws.
II. Thematic areas for the distribution of life insurance:
(a) regulation of the distribution of life insurance
1. life insurance distribution legislation (in particular the Civil Code, Act, Regulation (EU) No 1286 / 2014 of the European Parliament and of the Council of 26 November 2014 on key information documents concerning structured retail investment products and insurance-based investment products),
2. structure, entities and functioning of pan-European personal pension product
2.1 provider of pan-European personal pension product, distributor of pan-European personal pension product,
2.2. Contract for a pan-European personal pension product,
2.3 basic information on the registration of pan-European personal pension product,
2.4. Basic information on cross-border provision of pan-European personal pension product,
2.5 portability of pan-European personal pension product,
2.6 rules on the distribution of pan-European personal pension product,
2.7 pre-contractual information on the distribution of pan-European personal pension product,
2.8 advice on the distribution of pan-European personal pension product,
2.9 providing information during the duration of the commitment to a pan-European personal pension product,
2.10 basic information on investment rules for providers of pan-European personal pension products,
2.11 investment opportunities for customers of pan-European personal pension product,
2.12 investor protection,
2.13 change of provider of pan-European personal pension product,
2.14 rules on the payment phase,
(b) the principles and functioning of life insurance and its products
1. breakdown of life insurance (risk life insurance, capital life insurance, investment life insurance, etc.),
2. the conditions for the creation, duration and termination of life insurance;
3. Insurance hazards (death, survival, disability, change in personal status, injury and illness, if any, if additional insurance is involved),
4. types of exclusions;
5. health examination,
6. common features of the insurance of persons,
7. cost of life insurance (insurance and other payments paid by the customer),
8. technical interest rate, capital value, redemption, risk premium, net and gross premiums,
9. Life insurance claims
10. life insurance premiums,
11. the relationship between life and non-life insurance,
12. alternative products to reserve insurance (supplementary pension savings, collective investment),
13. tax aspects of life insurance,
(c) investment and related risks
1. investment vehicles
1.1. Species and characteristics, concept of security and distribution of securities,
2. Bonds
2.1 the concept of a bond,
2.2 types of bonds (state, municipal, corporate, mortgage bond, priority, exchangeable, subordinate), form (in name and owner), form (paper or library),
3. Shares
3.1 the concept of shares,
3.2 characteristics of shares, types (priority and tribal), form (name and owner), form (paper and library),
4. derivatives
4.1 the concept of derivative, species,
4.2 use of derivatives (speculation, hedge, arbitrage), leverage effect,
5. Basic characteristics concerning certain other types of investment instruments (such as money market instruments),
6. risk of investment vehicles;
7. investment strategy
7.1. Basic investment strategy,
8. investment funds
8.1 investment funds (open and closed, legal personality, mutual funds, standard funds, special funds, qualifying investor funds),
8.2 Investment strategy, risk profile of the investment fund, method of distribution of revenue.
III. Thematic areas for distribution of motor vehicle insurance:
(a) regulation of the distribution of motor vehicle insurance
1. Legislation concerning the distribution of motor insurance [in particular the Civil Code, Act, Commission Regulation (EU) supplementing or implementing Directive (EU) 2016 / 97 of the European Parliament and of the Council],
(b) the principles and functioning of motor vehicle insurance
1. conditions for the creation and termination of motor vehicle insurance;
2. common features of motor vehicle insurance,
3. types of exclusions,
4. Czech Insurance Office,
5. guarantee fund,
6th green card,
7. record of the accident,
8. total and partial damage,
9. the right of the insurer to pay the amount paid (regres);
10. claims on motor vehicle insurance,
11. insurance premiums for motor vehicle insurance,
12th bonus, malus,
13. Assistance,
14. emergency insurance,
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Regulation Information
| Citation | Decree No. 195 / 2018 Coll., on professional competence for insurance distribution |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 05.09.2018 |
|---|---|
| Effective from | 01.12.2018 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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