Act No. 260 / 2011 Coll.
Act amending Act No. 340 / 2006 Coll., on the Activities of Occupational Pensions Institutions from Member States of the European Union or other States Parties to the Agreement on the European Economic Area, in the Czech Republic and amending Act No. 48 / 1997 Coll., on Public Health Insurance and amending and supplementing certain related acts, as amended
Valid
Law
Effective from 31.08.2011
Text versions:
31.08.2011
Contents
260
THE LAW
of 22 July 2011
amending Act No. 340 / 2006 Coll., on the Activities of Occupational Pensions Institutions from Member States of the European Union or other States Parties to the Agreement on the European Economic Area, in the Czech Republic and amending Act No. 48 / 1997 Coll., on Public Health Insurance and amending and supplementing certain related acts, as amended
Parliament has decided on this law of the Czech Republic:
Act No. 340 / 2006 Coll., on the Activities of Occupational Pensions Institutions of Member States of the European Union or of other States Parties to the Agreement on the European Economic Area, in the territory of the Czech Republic and amending Act No. 48 / 1997 Coll., on Public Health Insurance and amending and supplementing certain related acts, as amended, as amended, as amended by Act No. 248 / 2008 Coll. and Act No. 281 / 2009 Coll., is amended as follows:
1. In the title of the Act, the words, "from the Member States of the European Union or from other States which are parties to the Agreement on the European Economic Area, in the territory of the Czech Republic and amending Act No. 48 / 1997 Coll., on Public Health Insurance, and amending and supplementing certain related acts, as amended," shall be deleted.
2. The heading of Part One shall read "GENERAL PROVISIONS '.
3. Paragraph 1 (1), including footnote 1, reads as follows:
"(1) This law implements the relevant provisions of the European Union1) and provides for:
(a) conditions for the performance of occupational pension insurance by institutions established in the Czech Republic;
(b) the pursuit of occupational pension insurance by occupational pension institutions authorised to do so in a Member State of the European Union other than the Czech Republic or another State party to the Agreement on the European Economic Area, within the territory of the Czech Republic,
(c) supervision of the activities of these institutions in the Czech Republic.
1) Directive 2003 / 41 / EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision. Directive 2010 / 78 / EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98 / 26 / EC, 2002 / 87 / EC, 2003 / 6 / EC, 2003 / 41 / EC, 2003 / 71 / EC, 2004 / 39 / EC, 2004 / 109 / EC, 2005 / 60 / EC, 2006 / 48 / EC, 2006 / 49 / EC and 2009 / 65 / EC with regard to the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority). ';
4. in Article 2, the following point (b) is inserted after point (a):
"(b) an institution located in the Czech Republic of an institution for occupational retirement provision which is operated and established under similar conditions as referred to in (a) (1) and (2),"
Points (b) to (i) shall be renumbered (c) to (j).
5. in Article 2, the following point (e) is inserted after point (d):
"(e) by the host Member State, a Member State other than the Czech Republic whose social and occupational legislation on occupational retirement provision applies to the relationship between the contributor and the participant;"
Points (e) to (j) shall be renumbered as points (f) to (k).
6. In Article 2, at the end of point (k), the dot is replaced by a comma and the following point (l) is added:
"(l) biometric risks associated with death, disability and longevity."
7. The following text is inserted after Section 2:
Article 2
8. In Paragraph 3 (1), the words "according to this part of the Act 'shall be inserted after the words" the Czech Republic'.
9. In Article 3 (2), the words "this Act 'are replaced by the words" this Part of the Act'.
10. in Paragraph 6 (2) (a), "63" is replaced by "65."
11. The following parts third and fourth are inserted after Section 10, including the headings and footnotes 2:
CONDITIONS FOR OPERATING EMPLOYMENT PENSION INSURANCE
(1) The provision of occupational pension insurance for institutions located in the Czech Republic must be authorised by the authority designated to supervise under this part of the Act (hereinafter referred to as the supervisory authority). This institution must then be entered in the list of institutions based in the Czech Republic, which also includes all Member States in which institutions based in the Czech Republic are active. The supervisory authority shall inform the European Insurance and Occupational Pensions Authority thereof (2).
(2) The exclusive object of the activities of the institution with its head office in the Czech Republic is the pursuit of occupational pension insurance and the resulting activities.
(3) Institutions based in the Czech Republic must be managed by persons who are trustworthy and have the training and experience necessary for the management of the institution. Where such persons do not have sufficient professional training and experience, the institution shall be obliged to employ advisers who fulfil these conditions. The law governing the insurance sector shall apply mutatis mutandis to determine the credibility, professional training achieved and the required practice.
(4) The pension plan of an institution based in the Czech Republic must meet the conditions set out in Section 6 and must be clearly communicated to each participant. The participant shall be adequately informed of the terms of the pension plan, in particular the rights and obligations of the persons involved in the pension plan and the financial, technical and other risks associated with the pension plan and the nature and distribution of those risks.
(5) Institutions located in the Czech Republic must fulfil the information obligations with respect to participants and beneficiaries laid down in § 7 (2) to (6) mutatis mutandis.
(6) Institutions based in the Czech Republic must prepare and review at least every 3 years a written declaration on the principles of investment policy. This statement must be adapted without delay for any major change in its investment policy. The statement on the principles of investment policy shall include in particular information on:
(a) methods for assessing investment risk;
(b) established risk management procedures;
(c) strategic asset placement taking into account the nature and duration of pension liabilities.
(7) Institutions based in the Czech Republic must follow proper administrative and accounting procedures and have internal control mechanisms appropriate to the nature of their activities.
(8) An institution based in the Czech Republic produces annual accounts and annual reports, taking into account each pension plan under the Accounting Act. The annual accounts and the information in the annual report shall be complete and clearly drawn up and approved by the persons responsible for the management of the institution.
(9) The contributor must be a different legal or business person from an institution based in the Czech Republic. Assets of institutions based in the Czech Republic do not fall within the property of the contributor in the event of its bankruptcy.
(10) The contributor must not be liable for the payment of pension benefits.
The supervisory authority shall be entitled to:
(a) require an institution based in the Czech Republic to provide information on all matters relating to its activities or to transmit all documents relating to its activities and to contact the board members and other persons responsible for managing the institution based in the Czech Republic with such a request,
(b) to supervise the relations between an institution having its registered office in the Czech Republic and other undertakings or between institutions having its registered office in the Czech Republic, provided that they transfer their tasks to other legal persons or institutions having their registered office in the Czech Republic and that such relationships affect the financial situation of an institution having its registered office in the Czech Republic or are important in an important way for effective supervision;
(c) require an institution established in the Czech Republic to provide a regular statement on the principles of investment policy, annual accounts and annual reports and all documents necessary for supervisory purposes; such documents may include internal preliminary reports, actuarial assessments and detailed assumptions, studies on assets and liabilities, evidence of compliance with the principles of investment policy, evidence of regular payment of contributions, reports of persons responsible for auditing annual accounts,
d) carry out an audit of the activities of an institution based in the Czech Republic in its establishments and, in the case of delegated tasks, check that the activities are carried out in accordance with the legislation.
(1) The supervisory authority shall be entitled to take all measures, including measures of an administrative and financial nature, which are appropriate and necessary to prevent or eliminate irregularities affecting the interests of the participants or recipients, in respect of an institution located in the Czech Republic and those in its management.
(2) The supervisory authority is entitled to limit or prohibit the free disposal of assets of an institution established in the Czech Republic in particular in cases where that institution has not created sufficient technical provisions for liabilities from its activities or has insufficient assets to cover technical provisions or has no regulatory capital.
(3) In order to protect participants and recipients of benefits, the supervisory authority is entitled to transfer in part or in full the powers of persons operating an institution established in the Czech Republic to a suitable agent.
(4) The supervisory authority is entitled to prohibit or restrict the activities of an institution based in the Czech Republic, in particular where that institution:
(a) it does not sufficiently protect the interests of the participants and beneficiaries;
(b) fails to comply with the conditions for its operation;
(c) seriously fails to fulfil its obligations under the rules applicable to it;
(d) in the case of cross-border activity, it does not comply with the requirements of the social and labour law of the host Member State applicable to occupational retirement provision.
(5) The decision referred to in paragraph 4 shall be notified by the supervisory authority to the European Insurance and Occupational Pensions Authority.
(1) An institution based in the Czech Republic creates technical provisions for liabilities from its pension plans.
(2) Sufficient technical provisions shall be established for all pension schemes that provide cover for biometric risks or guarantee either the return on investment or the amount of benefits.
(3) The calculation of technical provisions shall be carried out and validated by the actuary each year on the basis of actuarial methods. The actuary must be a person entered in the list of responsible actuaries under the law governing insurance.
(4) The calculation of technical provisions shall be carried out according to the following principles:
(a) the minimum amount of technical provisions shall be calculated by a sufficiently prudent actuarial balance sheet, taking into account all commitments relating to benefits and contributions in accordance with the institution's pension plans, which shall be sufficient to enable the payment of pensions and benefits already paid to beneficiaries to be continued and to reflect commitments arising from the increasing pension entitlements of participants; the economic and actuarial assumptions chosen for the assessment of liabilities shall also be chosen with caution, taking into account where appropriate the appropriate size of the adverse deviation;
(b) the maximum interest rates correspond to the maximum technical interest rate established by the Czech National Bank under the Insurance Act, taking into account the return on the corresponding assets held by the institutions and the future return on investment or market returns on government bonds or high quality bonds;
(c) the biometric tables used for the calculation of technical provisions are based on prudential principles taking into account the main characteristics of the group of participants and pension plans, and in particular the expected changes in significant risks;
(d) the method and basis for calculating technical provisions shall not normally change from one financial year to another, but any differences may be justified by a change in the legal, demographic or economic circumstances on which the assumptions are based.
(5) An institution established in the Czech Republic is required to permanently hold sufficient and appropriate assets to cover the technical provisions for all pension plans operated.
(6) In the event that an institution based in the Czech Republic fails to comply with the obligation referred to in paragraph 5, the supervisory authority shall be authorised to authorise the adoption of a recovery plan to ensure that the requirements referred to in paragraph 5 are met. The recovery plan shall meet the following requirements:
(a) an institution established in the Czech Republic shall establish a specific plan to re-establish the required amount of assets to cover the full technical provisions in due time and shall inform the participants and, where appropriate, their representatives thereof thereof;
(b) the establishment of a recovery plan takes into account the specific situation of the institution based in the Czech Republic, in particular the structure of assets and liabilities, the risk profile, the liquidity plan, the age profile of the participants entitled to receive pension benefits, the newly created plans and plans that are transferred from the plans operating on the basis of non-capital or only part capital for full capital coverage;
(c) an institution established in the Czech Republic shall, when the pension plan is terminated at the time the recovery plan has been authorised, establish a procedure for the transfer of assets and corresponding liabilities to another financial institution or similar entity, at the same time as the information on the termination of the pension plan shall be communicated to the supervisory authority and a general description of the procedure in accordance with the confidentiality principles to make the participants and, where appropriate, their representatives available.
(7) In the case of cross-border activities, the technical provisions for all pension plans operated must be fully financially covered. If these conditions are not met, the supervisory authority shall proceed in accordance with Section 10c.
(1) An institution established in the Czech Republic, where it provides a liability guarantee to cover biometric risks or guarantees a certain return on investment or benefit, must have on a permanent basis additional assets in excess of the technical provisions that serve as a buffer. The amount of these assets reflects the type of risk and asset status for all pension plans operated. These assets shall not be encumbered by foreseeable liabilities and shall serve as a reserve to eliminate deviations between expected and actual expenditure and profits.
(2) For the purposes of calculating the minimum amount of additional assets, the rules laid down by the law governing insurance shall apply mutatis mutandis.
(1) An institution established in the Czech Republic invests in accordance with the precautionary principle,
(a) the assets shall be invested in the best possible way for the participants and beneficiaries; in the event of a potential conflict of interest, the institution having its head office in the Czech Republic or the entity managing its portfolio shall ensure that investments are made solely in the interests of the participants and beneficiaries;
(b) the assets are invested in such a way as to ensure the security, quality, liquidity and profitability of the entire portfolio;
(c) the assets are invested mainly on regulated markets and the investments in assets that are not admitted to trading on regulated financial markets must in any event be kept to a prudent level;
(d) investments in financial derivatives are possible if they contribute to reducing investment risks or facilitate effective portfolio management, must be carefully assessed taking into account underlying assets and must be included in the assessment of institutions' assets; institutions located in the Czech Republic must not be exposed to excessive risk related to one counterparty and other financial derivatives operations,
(e) the assets are appropriately diversified to avoid excessive reliance on any particular asset, issuer or group of undertakings or accumulation of risk in the portfolio as a whole;
(f) investment in the assets of the same issuer or issuer belonging to the same group shall not expose an institution established in the Czech Republic to excessive risk concentration;
(g) investments in a contributing undertaking shall not be more than 5% of the total portfolio and, where the contributing undertaking is part of a group, investments in undertakings belonging to the same group as the contributing undertaking shall not be more than 10% of the portfolio;
(h) if more than one undertaking contributes to an institution located in the Czech Republic, investment in such contributing undertakings must be carried out with caution, taking into account the need for appropriate diversification;
(i) assets held to cover technical provisions shall also be invested in a manner appropriate to the nature and duration of the expected future pension benefits.
(2) Institutions established in the Czech Republic may not accept a loan or act as guarantor of third parties. The loan is only admissible for liquidity reasons, and only for the necessary period.
(3) An institution based in the Czech Republic can invest
(a) up to 70% of the assets covering the technical provisions or the total portfolio of the plans in which the participants bear investment risks in shares, negotiable securities treated as shares and bonds issued by undertakings admitted to trading on regulated markets;
(b) up to 30% of assets covering technical provisions for assets denominated in currencies other than those in which liabilities are expressed;
(c) on capital markets.
(1) An institution established in the Czech Republic wishing to be financed by an undertaking established in another Member State must have prior authorisation from the supervisory authority. The supervisory authority shall immediately inform the European Insurance and Occupational Pensions Authority of the granting of such authorisation.
(2) The intention to accept financial contributions from an undertaking established in another Member State must be notified in advance to the supervisory authority.
(2) The notification referred to in paragraph 2 shall contain the following information:
(a) the host Member State or host Member States;
(b) the name of the contributing undertaking;
(c) the main characteristics of the pension plan to be operated for the contributing undertaking.
(4) If the supervisory authority has no reason to doubt that the internal structure of an institution based in the Czech Republic, its financial situation, reputation and professional qualifications and the practice of managers are compatible with the activities proposed in the host Member State, it shall communicate this information to the competent authorities of the host Member State within 3 months of receiving all the information referred to in paragraph 3 and shall subsequently inform the institution based in the Czech Republic.
COMMON PROVISIONS
An occupational pension institution may not be established in the Czech Republic.
(2) Regulation (EU) No 1094 / 2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716 / 2009 / EC and repealing Commission Decision 2009 / 79 / EC. ';
The second part becomes the fifth part and the third part becomes the sixth part.
Efficacy
This Act shall take effect on the day of its publication.
Germany
Klaus v. r.
Nausea v. r.
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Regulation Information
| Citation | Act No. 260 / 2011 Coll., amending Act No. 340 / 2006 Coll., on the Activities of Occupational Pensions Institutions from Member States of the European Union or other States Parties to the Agreement on the European Economic Area, in the territory of the Czech Republic and amending Act No. 48 / 1997 Coll., on Public Health Insurance and amending and supplementing certain related laws, as amended |
|---|---|
| Regulation Type | Law |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 31.08.2011 |
|---|---|
| Effective from | 31.08.2011 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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