Act No. 277 / 2009 Coll.
Insurance Act
Valid
Law
Effective from 01.01.2010
Contents
ČÁST PRVNÍ
§ 1
§ 2
§ 3
ČÁST DRUHÁ
HLAVA I
§ 4
§ 5
§ 6
§ 7
§ 7a
§ 7b
§ 7c
§ 7d
§ 7e
§ 7f
§ 7g
§ 7h
§ 7i
§ 7j
§ 8
§ 11
HLAVA II
Díl 1
§ 13
§ 14
§ 15
§ 16
§ 17
§ 18
Díl 2
§ 19
§ 20
§ 21
§ 22
§ 23
§ 24
§ 25
§ 26
§ 27
Díl 3
§ 28
§ 29
§ 30
§ 31
§ 31a
Díl 4
§ 32
§ 33
§ 34
§ 34a
§ 35
HLAVA III
Díl 1
§ 36
§ 37
§ 38
§ 39
§ 40
§ 42
§ 43
§ 44
§ 45
Díl 2
§ 46
§ 47
§ 48
Díl 3
§ 49
§ 50
§ 50a
HLAVA IV
Díl 1
§ 51
§ 52
§ 53
§ 54
§ 54a
§ 54b
§ 54c
§ 54d
§ 54e
§ 54f
§ 55
§ 56
§ 57
§ 58
§ 59
Díl 2
§ 60
§ 61
§ 62
Díl 3
Oddíl 1
§ 63
§ 64
§ 65
§ 66
§ 67
§ 68
§ 69
§ 70
§ 71
§ 72
Oddíl 2
§ 73
§ 74
§ 75
§ 76
§ 77
§ 78
§ 78a
§ 78b
Oddíl 3
§ 79
§ 79a
§ 79b
HLAVA V
§ 80
§ 80a
§ 81
§ 82
§ 82a
§ 83
§ 83a
§ 83b
ČÁST TŘETÍ
HLAVA I
Díl 1
§ 84
§ 85
§ 86
§ 86a
§ 86b
§ 86c
Díl 2
Oddíl 1
§ 87
§ 88
§ 88a
§ 89
§ 89a
Oddíl 2
§ 89b
§ 89c
§ 89d
§ 89e
§ 89f
§ 89g
Oddíl 3
§ 90
§ 90a
Oddíl 4
§ 91
Oddíl 5
§ 91a
§ 91b
§ 91c
§ 91d
§ 91e
§ 91f
§ 91g
§ 91h
§ 91i
§ 92
Oddíl 6
§ 92a
§ 92b
§ 92c
Oddíl 7
§ 92d
§ 92e
§ 92f
§ 92g
§ 92h
§ 92i
§ 92j
§ 92k
§ 92l
§ 92m
§ 92n
§ 92o
§ 92p
Díl 4
§ 94
§ 94a
§ 94b
HLAVA II
Díl 1
§ 95
§ 95a
§ 95b
§ 95c
§ 96
§ 97
§ 98
§ 98a
§ 98b
§ 99
§ 100
§ 101
§ 102
§ 103
§ 104
§ 105
§ 105a
§ 105b
§ 106
§ 107
§ 108
§ 108a
§ 109
§ 109a
§ 109aa
§ 109b
§ 109c
Díl 2
§ 110
§ 111
§ 111a
§ 112
Díl 3
§ 113
§ 114
Díl 4
§ 116
§ 117
§ 118
HLAVA III
§ 119
§ 120
§ 121
HLAVA IV
§ 122
§ 123
§ 124
§ 125
ČÁST ČTVRTÁ
§ 126
§ 127
§ 128
ČÁST PÁTÁ
§ 129
§ 129a
§ 129b
§ 129c
§ 130
§ 131
§ 131a
§ 132
§ 132a
§ 133
§ 134
§ 135
ČÁST ŠESTÁ
§ 136
§ 136a
§ 137
§ 138
§ 139
§ 140
§ 141
ČÁST SEDMÁ
§ 142
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277
THE LAW
of 22 July 2009
on insurance
Parliament has decided on this law of the Czech Republic:
GENERAL PROVISIONS
Subject matter
(1) This law implements the relevant European Union1), following the directly applicable European Union40) and regulates the conditions for the operation of insurance and reinsurance activities and supervision in the insurance sector.
(2) This Act is governed by:
(a) the pursuit of insurance and reinsurance activities by an insurance undertaking established in the Czech Republic and the pursuit of reinsurance activities by a reinsurance undertaking established in the Czech Republic;
(b) the operation of insurance and reinsurance activities within the territory of the Czech Republic by an insurance undertaking established in the territory of a Member State of the European Union or in the territory of a State forming a European Economic Area other than the Czech Republic (hereinafter referred to as "another Member State") and the pursuit of reinsurance activities within the territory of the Czech Republic by a reinsurance undertaking established in the territory of another Member State;
(c) the operation of insurance and reinsurance activities within the territory of the Czech Republic by an insurance undertaking having its registered office in the territory of a State other than that referred to in points (a) and (b) (hereinafter referred to as "the third State") and the operation of reinsurance activities within the territory of the Czech Republic by a reinsurance undertaking having its registered office in the territory of a third State.
(1) This Act does not apply to the implementation of sickness insurance, pension insurance, state-funded pension insurance, pension savings, supplementary pension savings, occupational pension insurance, employee accident insurance and public health insurance 2).
(2) This law does not apply to activities
(a) insurance undertakings carrying out their activities on a reciprocal basis (hereinafter referred to as the "mutual insurance undertaking") for which the performance varies according to available resources and which require each of their members to pay the same contribution;
(b) institutions, other than insurance undertakings, consisting of the provision of services to employees and self-employed persons belonging to a single business establishment or business group or to an economic sector or group of branches, in the event of death or survival of a specified age, or in the event of interruption or restriction of an activity, irrespective of whether the obligations arising from that activity form technical provisions;
(c) institutions other than insurance undertakings, consisting of entering into obligations to provide services only in the event of death, provided that such services do not exceed the average funeral costs or where non-cash benefits are provided;
(d) mutual insurance undertakings engaged in non-life insurance activities which have entered into an agreement with another mutual insurance undertaking on the basis of which the obligations arising from insurance contracts concluded by it are fully secured or under which another insurance undertaking assumes the obligations arising from such contracts;
(e) institutions and insurance undertakings located in another Member State excluded from the scope of the European Union Directive governing the taking up and pursuit of the business of insurance and reinsurance and for operations excluded by this Directive;
(f) institutions other than insurance undertakings in the event of a breakdown or accident of a road vehicle occurring in the Czech Republic, and
1. on-the-spot repair where the service provider uses primarily its own staff and equipment for this activity;
2. transport of the vehicle to the nearest or most appropriate place of repair and transport of the driver and passengers to the nearest place from which they may continue their journey by other means;
3. the transport of the vehicle, or, where appropriate, the driver and passengers to their place of residence, to their place of departure, if different from their place of residence, or to a destination point in the same State of the European Union or in a State constituting the European Economic Area (hereinafter referred to as "the Member State"),
(g) a group without a legal personality consisting of providing mutual security for its members, without any obligation to pay premiums or create technical provisions;
(h) consisting of insurance of export credits on behalf of the State or guaranteed by the State or, unless otherwise provided for by other legislation, the State is an insurer;
(i) the financial market guarantee system and the funds managed by it under the Financial Market Recovery and Crisis Management Act and the Bank4 Act),
(j) The guarantee fund of securities dealers (5).
(3) The condition that the fault or accident of a road vehicle occurs in the territory of the Czech Republic shall not apply in the case of paragraph 2 (f) (1) and (2) if the repair of the vehicle on-site or its transport is made by an institution in the territory of another State without having to pay any additional payment in return against the submission of a member card to the institution of which the beneficiary is a member, on the basis of agreements between such institutions.
(4) This law also does not apply to reinsurance activities carried out or fully guaranteed by the Czech Republic, which are carried out on grounds of public interest for insurance protection, where the nature of the insurance risk or market situation does not allow for adequate private reinsurance.
Definition of terms
(1) For the purposes of this Act:
(a) an insurance undertaking of a domestic insurance undertaking, an insurance undertaking of another Member State or an insurance undertaking of a third State, with the exception of an insurance undertaking excluded from the scope of the European Union Directive governing the taking up and pursuit of the business of insurance and reinsurance;
(b) a domestic insurance company, a legal person established in the Czech Republic, authorised by the Czech National Bank to carry out insurance activities under this Act,
(c) by an insurance undertaking from another Member State, a legal person having its head office in the territory of another Member State who has been authorised in that other Member State to pursue an insurance business;
(d) by an insurance undertaking from a third State, a legal person established in the territory of a third State who is entitled to pursue an insurance activity in accordance with the law of the country of his registered office;
(e) a captive insurance undertaking controlled by a financial sector6) other than an insurance or reinsurance undertaking or a person other than an insurance holding person or an insurance holding person with a mixed activity, or controlled by another person who is not a financial sector person, provided that the business of that insurance undertaking is exclusively limited to providing insurance against the insurance risks of a person or persons jointly forming a business group;
(f) insurance activities on the basis of insurance contracts concluded and the performance thereof, the insurance activities directly arising from the authorised insurance business, in particular those relating to the creation and management of insurance, the liquidation of insurance events, the provision of assistance services, the investment, the conclusion of contracts with reinsurance undertakings to ensure insurance obligations arising from insurance contracts concluded by insurance undertakings and the prevention and mitigation of their consequences;
(g) a reinsurance undertaking, a reinsurance undertaking from another Member State or a reinsurance undertaking from a third State, with the exception of a reinsurance undertaking excluded from the scope of the European Union Directive governing the taking up and pursuit of the business of insurance and reinsurance,
(h) a domestic reinsurance legal person established in the Czech Republic which has been granted permission by the Czech National Bank to carry out reinsurance activities under this Act;
(i) by a reinsurance undertaking from another Member State, a legal person having its registered office in the territory of another Member State which has been authorised in that Member State to pursue a reinsurance activity;
(j) a third-State reinsurance undertaking is a legal person established in the territory of a third State who is entitled to pursue a reinsurance activity in accordance with the law of the country of his registered office;
(k) a captive reinsurance undertaking controlled by a financial sector6) other than an insurance or reinsurance undertaking or a person other than an insurance holding person or an insurance holding person with a mixed activity or controlled by another person who is not a financial sector person, provided that the business of that reinsurance undertaking is exclusively limited to providing insurance risks for a person or persons interconnected with it;
(l) the reinsurance business of taking over insurance risks on the basis of the contracts concluded by the reinsurance undertaking to provide the insurance undertaking with an agreed range of performance, if the reinsurance contract provides for a specified event in the contract, and the insurer undertakes to pay the reinsurer in the contract a specified part of the insurance premiums ("reinsurance") on the insurance contracts concluded by the insurer which are the subject of the contract ("reinsurance contract"), the performance of those contracts and the conclusion of reinsurance contracts between the reinsurer, the activities directly arising from the authorised reinsurance activity, in particular the activities related to the establishment of reinsurance and its management, the provision of statistical or actuarial advice in the insurance sector, the activity of the holding person and the activity of the financial sector under the law governing the supplementary supervision of the financial conglomerates; the reinsurance activity is also the conclusion of reinsurance contracts with institutions for occupational retirement provision located in the Member States of the European Union which have been authorised to pursue occupational retirement provision in accordance with European Union law,
(m) investing in the management of all assets held by an insurance or reinsurance undertaking;
(n) the liquidation of an insurance claim, a set of activities beginning with an investigation to determine the insurance undertaking's obligation to comply with an event caused by an insurance risk, to determine the amount of such performance and to end with its payment to the beneficiary or to the injured party, or by notifying that no such obligation has arisen;
(o) the home Member State of the Member State in which the registered office is situated;
1. insurance undertakings with non-life insurance risk,
2. insurance undertakings with a life insurance obligation;
3. reinsurance undertakings, in the case of reinsurance,
(p) the host Member State shall be the Member State in which the insurance or reinsurance undertaking has a branch or in which it temporarily provides services; in the case of life insurance, the Member State in which the insurance undertaking provides services shall mean the Member State of the undertaking and in the case of non-life insurance such Member State shall mean the Member State in which the insurance risk is situated where such an undertaking or risk is insured by the insurance undertaking or its branch located in another Member State;
(r) by branch, any permanent presence of an insurance or reinsurance undertaking in the territory of a Member State other than the home Member State, whether that presence takes the form of an insurance or reinsurance undertaking's organisational component or a representation of that insurance or reinsurance undertaking by a third party who has a permanent mandate to act as an insurance or reinsurance undertaking as its organisational component would have been; in the case of a branch of an insurance or reinsurance undertaking from a third State established in the territory of the Czech Republic, it is understood to be a fissile plant under the Civil Code;
(s) the freedom to temporarily provide services with the right to pursue an insurance or reinsurance activity in the territory of the host Member State, to the extent authorised by the supervisory authority of the home Member State, where such activity does not have the character of permanent presence in the territory of the host Member State;
(t) the supervisory authority of the authority supervising the insurance or reinsurance business of the insurance or reinsurance undertaking;
(u) European Supervisory Authority European Insurance and Occupational Pensions Authority,
(v) an indication of the person's name, name, surname, date of birth and address of the natural person's place of residence, in the case of a natural person who is also engaged in the place of his business, or a commercial firm or the name and address of the legal person.
(2) For the purposes of this Act:
(a) life insurance cover for the insurance sectors listed in Part A of Annex 1 to this Act;
(b) non-life insurance of the insurance sectors listed in Part B of Annex 1 to this Act;
(c) life assurance by taking risks arising from life insurance policies;
(d) non-life reinsurance of risks arising from non-life insurance contracts;
(e) the solvency capacity of the insurance or reinsurance undertaking to ensure, by its own resources, the sustainability of insurance or reinsurance obligations;
(f) management of insurance or reinsurance activities ensuring the duration and updating of insurance or reinsurance contracts;
(g) a summary of insurance undertakings' obligations arising from insurance contracts, including obligations arising from unjustified enrichment or from unlawful acts relating to such contracts;
(h) the related rights and obligations arising from the insurance contracts concluded and the assets corresponding to that group;
(i) a set of reinsurance contracts, a summary of the reinsurance undertaking's obligations arising from reinsurance contracts, including those arising from unfounded enrichment or from the unlawful acts relating to those contracts;
(j) the rights and obligations arising out of the contracts concluded and the assets corresponding to that group,
(k) the terms and conditions of the contract established by the insurance undertaking for the conclusion of insurance contracts for each insurance sector, for groups of those sectors or for each type of insurance agreed within the insurance sector, in particular general insurance conditions, special or supplementary insurance conditions;
(l) assistance services provided to persons who are in difficulties during travel or outside their place of residence, consisting of an undertaking by an insurance undertaking operating an insurance business under the insurance sector referred to in point (18) of Part B of Annex No 1 to this Act, to provide immediately available assistance to a person authorised under an insurance contract on the basis of a prior payment of the insurance premiums, provided that such person is in difficulty as a result of an insurance event, the assistance may take the form of cash or in kind and the performance may be provided on the basis of a contractual relationship between a person other than an insurance undertaking; neither service nor maintenance of the vehicle nor information on the provision of the service or brokering of the service shall be regarded as an assistance service;
(m) the Member State in which the insurance risk covered by the non-life insurance policy is situated,
1. in the territory of which the insured buildings, their components, accessories and items are located, provided that they are covered by the same insurance contract;
2. where the insured means of transport is registered irrespective of the type of vehicle; if it is a vehicle dispatched from one Member State to another, the Member State in which the risk is situated, depending on the decision of the vehicle operator, either the Member State of registration or the target Member State immediately from the receipt of the vehicle by the purchaser for a period of 30 days, although the vehicle has not been registered in the target Member State,
3. where the policyholder has concluded an insurance contract for a period of 4 months or less relating to insurance risks related to travel, irrespective of the insurance sector; or
4. in which the policy holder is resident as a natural person or as a legal person in the case of cases not listed in points 1 to 3,
(n) the Member State of commitment is the Member State in which the policyholder who has concluded a life insurance contract, residence or, where the policyholder is a legal person, the Member State in which the head office or branch of that legal person to which the contract relates is situated;
(o) by outsourcing the activities of the insurance or reinsurance undertaking's arrangements with the service provider, process or activity through which, either directly or through their further outsourcing, regardless of whether the activity of the provider is supervised, the insurance or reinsurance undertaking shall ensure the performance of the service, process or activity it would otherwise carry out itself.
(3) For the purposes of this Act, the controlling person shall be the person who:
(a) it has the voting rights of members or members in another commercial corporation by a majority; If it is not demonstrated that another person has equal or greater voting rights, a person who has at least 40% of the voting rights in a particular person shall be deemed to be the controlling person and that persons acting in agreement who have at least 40% of the voting rights in a particular person shall be the controlling person;
(b) has the right to appoint, elect or revoke a majority of the members of a statutory or supervisory body of another commercial corporation and is also a member of such a corporation;
(c) has the right to exercise decisive influence in any other commercial corporation of which it is a member or member, under a contract which it has concluded with it, or under its statutes, a social or founding agreement, in so far as the law governing such a corporation allows such contracts or statutes to be subordinate to social or founding contracts;
(d) is a member of any other commercial corporation; and
1. the majority of the members of the statutory or supervisory body of that corporation have been appointed solely through the exercise of its voting rights, unless another person has the rights to that controlled person referred to in points (a), (b) or (c); or
2. exercise, by agreement with other members of the corporation, a majority of the voting rights of the members of the corporation; or
(e) otherwise than those referred to in (a) to (d), it actually exercises decisive influence in another person.
(4) For the purposes of paragraph 3:
(a) points (a), (b) and (d) shall be added to the voting, appointment and appeal rights of the controlling person to the rights of all other controlled persons and rights belonging to any person acting in his own name but on behalf of the controlling person or other controlled person;
(b) points (a), (b) and (d) shall be deducted from the rights referred to in paragraph 3;
1. belonging to shares or shares held on behalf of any person other than the controlling person or any controlled person; or
2. belonging to shares or shares held as a guarantee, provided that those rights are exercised in accordance with the instructions adopted or that the holding of those shares or shares for a commercial establishment is part of a normal business activity in connection with the provision of loans, provided that the voting rights are exercised in the interest of the person providing the guarantee;
(c) points (a) and (d) shall be deducted from the total of the voting rights of the members of the controlled person from the voting rights attached to the shares or shares held by that person by the controlled person or persons acting in their own name but on behalf of those persons.
(5) The assessment of direct or indirect holdings shall not take into account voting rights or shares held by banks, savings and credit cooperatives or securities dealers as a result of the subscription or placement of financial instruments on the basis of a firm commitment to take over (7), provided that the rights associated with such holdings are neither exercised nor otherwise used to intervene in the management of the issuer and that their owner changes within one year of their acquisition.
(6) For the purposes of this Act:
(a) the person controlled by the person against whom the other person is in the position of the controlling person; all controlled persons of controlled persons are also considered to be controlled persons of the controlling person leading those persons,
(b) a person participating in another person
1. controlling person,
2. a non-controlling person who holds a participation in another person;
3. a person connected to another person by a single management relationship; or
4. a person who, during the accounting year, has the same person as a member of a statutory or supervisory body, with no control or single management relationship between them;
(c) an associate
1. controlled person,
2. other than the controlled person in which another person holds a participation;
3. a controlled person linked to another person by a single management relationship; or
4. a person who, during the accounting year, has the same person as a member of a statutory or supervisory body or who is involved in their management, without having a control or uniform management relationship between them;
(d) by participating in a direct or indirect holding assessed separately or their sum representing at least 20% of the capital or voting rights of another person;
(e) by qualifying holdings, a direct or indirect holding in the capital or voting rights of a legal person, or a sum thereof, representing at least 10% or allowing a significant influence on the management of that legal person; the share is treated in a similar manner to that of the voting rights of the issuer under the law governing the capital market business,
(f) an indirect share held through a controlled person or group of persons acting in agreement, including a share of the voting rights of securities;
(g) an insurance holding person controlling a person who is not a mixed financial holding person under a law governing the supplementary supervision of financial conglomerates and whose main activity is to acquire and hold shares in controlled persons who are exclusively or mainly insurance or reinsurance undertakings, at least one of those controlled persons being a domestic insurance or domestic reinsurance undertaking;
(h) an insurance holding person with a mixed activity controlled by a person other than an insurance or reinsurance undertaking, an insurance holding person or a mixed financial holding person under the law governing financial conglomerates, at least one controlled person being a domestic insurance undertaking or a domestic reinsurance undertaking;
(i) a group of 2 or more persons with close links;
(j) a close link between a relationship where two or more persons are connected in such a way that
1. one person is an associate of another person, directly or through another person or persons;
2. 2 persons are controlled persons of the same controlling person, directly or through another person or persons; or
3. The majority of the members of the statutory or supervisory bodies of one person shall, for the majority of the financial year, consist of persons who are in the statutory or supervisory bodies of another person or persons who are closely linked to another person as referred to in points 1 to 3, unless they are persons who perform such functions in their business on a professional basis and are not the purpose of performing their functions of interconnecting the activities of the persons in which the function of a member of the statutory, management or supervisory body is exercised;
(k) a person with a key function who effectively manages an insurance or reinsurance undertaking or controls the business of an insurance or reinsurance undertaking or the person responsible for risk management, checking compliance with the rules, internal audit or actuarial activity, or the person responsible for carrying out other business designated by the insurance or reinsurance undertaking as key; if it is a monastic system of the internal structure of a domestic insurance or reinsurance undertaking, it is also a member of its Management Board;
(l) intra-group transactions whereby an insurance or reinsurance undertaking becomes dependent, directly or indirectly, on the decision of other persons in the same group or on the decision of another person closely linked to those in that group, on the repayment of its debt or on the fulfilment of the debt.
(7) For the purposes of this Act:
(a) underwriting risk risk of loss or change causing loss of the value of the insurance or reinsurance obligation due to undue assumptions in determining the amount of premiums, premiums or technical provisions;
(b) a market risk risk of loss or adverse changes in the financial situation arising directly or indirectly from fluctuations in the level and volatility of market prices of assets, liabilities and financial instruments;
(c) credit risk risk of loss or adverse changes in the financial situation resulting from fluctuations in the credit assessment of issuers of securities, counterparties and any debtors to which insurance and reinsurance undertakings are exposed, in the form of counterparty default risk or credit spread risk or market risk concentration;
(d) operational risk risk the risk of loss arising from the inadequacy or failure of internal processes, employees or persons acting for an insurance or reinsurance undertaking, systems or external events;
(e) the liquidity risk of the insurance or reinsurance undertaking's inability to monetize its investments and other assets intended to cover its debts at the time they become due;
(f) the risk of concentration all exposure to potential losses which are sufficiently large to jeopardise the solvency or financial situation of the insurance or reinsurance undertaking;
(g) risk mitigation techniques all techniques enabling the insurance or reinsurance undertaking to transfer part or all of its risks to another Contracting Party;
(h) the level of risk of a mathematical function which assigns the monetary amount of a given probability distribution forecast and increases monotonically with the exposure level of the risks underlying that probability distribution forecast;
(i) an ECAI legal entity issuing credit assessments on the basis of an authorisation granted in accordance with the directly applicable European Union regulation governing credit rating agencies (41) or a central bank issuing credit assessments not covered by this directly applicable regulation.
OPERATING ACTIVITIES IN INSURANCE
BASIC PROVISIONS
Basic conditions for the operation of insurance activities
(1) Only a domestic insurance company and an insurance company from a third State authorised by the Czech National Bank to carry on such business or an insurance company from another Member State may operate in the territory of the Czech Republic on the basis of the right to establish branches or on the basis of the freedom to provide temporary services.
(2) Only a domestic reinsurance undertaking may operate in the territory of the Czech Republic and, unless otherwise provided for in this Act, a third-State reinsurance undertaking authorised by the Czech National Bank to carry on such business or a reinsurance undertaking from another Member State, on the basis of the right to establish branches or on the basis of the freedom to provide temporary services.
(3) A domestic insurance company may also operate in the territory of the Czech Republic and, unless otherwise provided for by this law, an insurance company from a third State which has been granted authorisation by the Czech National Bank to carry on such business or an insurance company from another Member State, on the basis of the right to establish branches or on the basis of the freedom to provide temporary services.
(4) The application for authorisation or acquisition of a holding governed by this Act may not be assessed by the Czech National Bank in the light of the economic needs of the market. The Czech National Bank shall grant authorisation if the conditions laid down in this Act are fulfilled.
(5) Only an insurance or reinsurance undertaking whose head office and registered office in a public or similar register is located in the same State as its home supervisory authority may operate under paragraphs 1 and 2.
Protection of the company
(1) The local insurance company shall state the word "insurance company" in its commercial firm. The local reinsurance undertaking shall state in its business the word "reinsurance undertaking."
(2) The word "insurance undertaking," its translation or the words on the basis of which these words or their forms occur, is entitled to use only a legal person who is entitled to pursue an insurance business in a trading firm, except for an insurance undertaking whose business is regulated by another legislation and with the exception of an insurance intermediary and a separate liquidator of claims. The word "reinsurance undertaking ', its translation or the words on the basis of which the word or its shape occurs, shall be entitled to use only the legal person authorised to carry out the reinsurance activity in a trading firm, except for the insurance intermediary authorised to carry out the reinsurance mediation.
Additional requirements for the performance of insurance activities
(1) An insurance or reinsurance undertaking is only entitled to conduct insurance or reinsurance activities within the scope of the authorisation granted by its supervisory authority. This activity shall be carried out with professional care and prudence by the insurance or reinsurance undertaking.
(2) In particular, the operation of an activity with professional care means that the insurance or reinsurance undertaking acts in a qualified, fair and fair manner and the insurance undertaking also takes into account the best interests of policy holders, insured and entitled persons; This is without prejudice to insurance obligations under the law governing insurance and reinsurance distribution.
(3) In particular, the operation of an activity shall mean, prudently, that the insurance or reinsurance undertaking does not carry out that activity in a way that damages its property or property entrusted to it by third parties or threatens the safety or stability or stability of the persons associated with it.
(4) In order to fulfil the obligations referred to in paragraphs 1 to 3, a national insurance undertaking, a third-State insurance undertaking, a national reinsurance undertaking and a third-State reinsurance undertaking shall establish and maintain a functioning and effective management and control system throughout their activities, regularly evaluate the information thereof and take appropriate measures in due time.
(5) Domestic insurance and reinsurance undertakings must not be an unlimited member of a commercial corporation, including a corporation established in a State other than the Czech Republic.
(6) A local insurance undertaking or a domestic reinsurance undertaking established as a public limited liability company issues shares with which the right to vote only in book-entry form.
(7) Insurance and reinsurance undertakings are engaged in their activities in such a way as not to make it difficult or impossible to exercise supervision under this law.
(8) The insurance and reinsurance undertaking processes personal data, including birth numbers, when carrying out insurance or reinsurance activities; Such processing of personal data shall be considered as necessary for compliance with the legal obligation of the controller under the law governing the protection of personal data (11).
Basic provisions on the management and control system
(1) The local insurance undertaking and the national reinsurance undertaking shall establish, maintain and apply an effective management and control system which ensures proper and prudent management of its business and compliance with the requirements set out in paragraphs 7 to 7i. This system shall include at least:
(a) an adequate and clearly defined organisational structure with a clear identification and appropriate separation of responsibilities;
(b) an effective way of transmitting information;
(c) risk management, compliance control, internal audit and actuarial activities;
(d) procedures for the approval of each insurance product and its significant changes before its distribution to customers under the law governing the distribution of insurance and reinsurance; and
(e) the remuneration system provided for in Section 8.
(2) The management and control system is proportionate to the nature, scale and complexity of the activities of the domestic insurance or reinsurance undertaking and is subject to regular internal review.
(3) The local insurance undertaking and the domestic reinsurance undertaking must have a written concept approved by their statutory body with regard to at least risk management, internal control, internal audit, as well as, where appropriate, external business reinsurance, and ensure that this concept is implemented; For the purposes of this Act, the statutory body shall be the governing board if it is a monastic system of the internal structure of the insurance or reinsurance undertaking. It shall review its functionality regularly, but at least once a year. It shall be adapted in the context of any significant change in its management and control system or in any area of its activity.
(4) In order to ensure continuity and proper and prudent performance of its activities, the domestic insurance undertaking and the domestic reinsurance undertaking will take appropriate measures, including the preparation of contingency plans. To this end, it shall use appropriate and proportionate systems, resources and procedures and shall establish and manage networks and information systems. The requirements for networks and information systems are governed by the directly applicable European Union regulation governing the digital operational resilience of the financial sector45).
Requirements for persons with key functions
(1) The local insurance undertaking and the national reinsurance undertaking shall ensure that all persons with key functions of the insurance or reinsurance undertaking are eligible and credible and are not in conflict of interest which would prejudice its sound and prudent management.
(2) The local insurance and domestic reinsurance undertaking shall, without undue delay, communicate to the Czech National Bank changes to the persons referred to in paragraph 1, together with all the information and documents necessary to assess whether they are eligible and credible.
(3) If the person referred to in paragraph 1 ceases to comply with the requirements referred to in paragraph 1, he shall notify the relevant national insurance or reinsurance undertaking without undue delay, which shall inform the Czech National Bank thereof.
(4) Any person proposing to change a member of a statutory body of a domestic insurance undertaking or a domestic reinsurance undertaking shall demonstrate to the person who decides to change it that he meets the requirements of paragraph 1.
Risk management
(1) An insurance undertaking and a domestic reinsurance undertaking must have an effective risk management system including the reporting strategies and procedures necessary for the systematic identification, measurement, monitoring, management and internal reporting of the risks to which it is or might be exposed. The risk management system shall allow risk assessment to be carried out individually and in a summary of the risks, including evaluation of their interdependence. The risk management system shall be appropriately integrated into the organisational structure of the insurance or reinsurance undertaking and shall be adequately respected by the persons referred to in Section 7a (1) of the decision-making process.
(2) The risk management system covers the risks included in the calculation of the Solvency Capital Requirement under Section 74 and risks not covered or fully covered by the calculation; the risk management system shall cover at least:
(a) underwriting insurance and the creation of technical provisions;
(b) asset and liability management;
(c) investments, in particular derivatives and similar liabilities;
(d) liquidity and concentration risk management;
(e) operational risk management; and
(f) reinsurance and other risk mitigation techniques.
(3) The written concept referred to in Article 7 (3) shall include the risk management procedures and techniques referred to in paragraphs 2 and 6 and, where the volatility adjustment is applied, the criteria for its application. Part of this concept is the liquidity plan taking into account cash flows in relation to assets and liabilities if they are subject to the adjustment under § 54b or the volatility adjustment under § 54c and 54d. In the case of investment risk, which includes in particular market risk, credit risk and liquidity risk, the domestic insurance undertaking and the domestic reinsurance undertaking are required to demonstrate compliance with the procedure laid down in Sections 60 and 61 to the Czech National Bank.
(4) Where a domestic insurance undertaking or a domestic reinsurance undertaking uses an ECAI for the calculation of technical provisions and the Solvency Capital Requirement, it shall not rely solely on such an assessment and shall use, where possible, any other appropriate method of assessment.
(5) If a domestic insurance undertaking or a domestic reinsurance undertaking uses or intends to use a partial or full internal model for the calculation of the Solvency Capital Requirement under Section 77, risk management shall also apply to the obligation to:
(a) design and implement the model;
(b) test and verify the validity of the model;
(c) keep documentation of the model and its changes;
(d) analyse the functionality of the model and prepare summary reports thereof; and
(e) inform the statutory or supervisory authority of the functioning of the internal model, of the areas in which improvements are to be made, and provide that authority with information on the procedure and results of the removal of identified deficiencies.
(6) The management of assets and liabilities referred to in paragraph 2 (b) includes a regular assessment of the sensitivity of the technical provisions and the eligible capital
(a) against the extrapolation assumptions of the relevant risk-free yield curve; and
(b) in the case of the application of the compensatory adjustment pursuant to § 54b
1. against the assumptions on which its calculation is based, including the calculation of the basic margin, and the possible impact of the forced sale of assets on the capital used;
2. in relation to changes in the composition of the Associated Asset Portfolio; and
3. to reduce the adjustment to zero; or
(c) in the case of the application of the volatility adjustment in accordance with § 54c also
1. against the assumptions for the calculation of the volatility adjustment, including the possible impact of the forced sale of assets on the capital used; and
2. to reduce the volatility adjustment to zero.
Contents
ČÁST PRVNÍ
§ 1
§ 2
§ 3
ČÁST DRUHÁ
HLAVA I
§ 4
§ 5
§ 6
§ 7
§ 7a
§ 7b
§ 7c
§ 7d
§ 7e
§ 7f
§ 7g
§ 7h
§ 7i
§ 7j
§ 8
§ 11
HLAVA II
Díl 1
§ 13
§ 14
§ 15
§ 16
§ 17
§ 18
Díl 2
§ 19
§ 20
§ 21
§ 22
§ 23
§ 24
§ 25
§ 26
§ 27
Díl 3
§ 28
§ 29
§ 30
§ 31
§ 31a
Díl 4
§ 32
§ 33
§ 34
§ 34a
§ 35
HLAVA III
Díl 1
§ 36
§ 37
§ 38
§ 39
§ 40
§ 42
§ 43
§ 44
§ 45
Díl 2
§ 46
§ 47
§ 48
Díl 3
§ 49
§ 50
§ 50a
HLAVA IV
Díl 1
§ 51
§ 52
§ 53
§ 54
§ 54a
§ 54b
§ 54c
§ 54d
§ 54e
§ 54f
§ 55
§ 56
§ 57
§ 58
§ 59
Díl 2
§ 60
§ 61
§ 62
Díl 3
Oddíl 1
§ 63
§ 64
§ 65
§ 66
§ 67
§ 68
§ 69
§ 70
§ 71
§ 72
Oddíl 2
§ 73
§ 74
§ 75
§ 76
§ 77
§ 78
§ 78a
§ 78b
Oddíl 3
§ 79
§ 79a
§ 79b
HLAVA V
§ 80
§ 80a
§ 81
§ 82
§ 82a
§ 83
§ 83a
§ 83b
ČÁST TŘETÍ
HLAVA I
Díl 1
§ 84
§ 85
§ 86
§ 86a
§ 86b
§ 86c
Díl 2
Oddíl 1
§ 87
§ 88
§ 88a
§ 89
§ 89a
Oddíl 2
§ 89b
§ 89c
§ 89d
§ 89e
§ 89f
§ 89g
Oddíl 3
§ 90
§ 90a
Oddíl 4
§ 91
Oddíl 5
§ 91a
§ 91b
§ 91c
§ 91d
§ 91e
§ 91f
§ 91g
§ 91h
§ 91i
§ 92
Oddíl 6
§ 92a
§ 92b
§ 92c
Oddíl 7
§ 92d
§ 92e
§ 92f
§ 92g
§ 92h
§ 92i
§ 92j
§ 92k
§ 92l
§ 92m
§ 92n
§ 92o
§ 92p
Díl 4
§ 94
§ 94a
§ 94b
HLAVA II
Díl 1
§ 95
§ 95a
§ 95b
§ 95c
§ 96
§ 97
§ 98
§ 98a
§ 98b
§ 99
§ 100
§ 101
§ 102
§ 103
§ 104
§ 105
§ 105a
§ 105b
§ 106
§ 107
§ 108
§ 108a
§ 109
§ 109a
§ 109aa
§ 109b
§ 109c
Díl 2
§ 110
§ 111
§ 111a
§ 112
Díl 3
§ 113
§ 114
Díl 4
§ 116
§ 117
§ 118
HLAVA III
§ 119
§ 120
§ 121
HLAVA IV
§ 122
§ 123
§ 124
§ 125
ČÁST ČTVRTÁ
§ 126
§ 127
§ 128
ČÁST PÁTÁ
§ 129
§ 129a
§ 129b
§ 129c
§ 130
§ 131
§ 131a
§ 132
§ 132a
§ 133
§ 134
§ 135
ČÁST ŠESTÁ
§ 136
§ 136a
§ 137
§ 138
§ 139
§ 140
§ 141
ČÁST SEDMÁ
§ 142
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Regulation Information
| Citation | Act No. 277 / 2009 Coll., on Insurance |
|---|---|
| Regulation Type | Law |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 31.08.2009 |
|---|---|
| Effective from | 01.01.2010 |
| Effective until | - |
| Status | Valid |
Legal Areas:
Banking, Money
Finance
Financial control
Economic (State)
Civil law
Civil law substantive
Commercial law
Commercial companies
Commercial liabilities
Businessman, Company
Labour law
Administrative offences
Administrative law
State (official) control
Accounting
Constitutional (state) law
Fundamental human rights
Eligibility for the pursuit of certain professions (activities)
The regulation text is for informational purposes only.
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