Act No. 304 / 2016 Coll.

Act amending Act No. 277 / 2009 Coll., on Insurance, as amended, and other related laws

Valid Effective from 23.09.2016
Text versions: 01.04.2024 23.09.2016
Contents
ČÁST PRVNÍ Čl. I „§ 7 „§ 7a § 7b § 7c § 7d § 7e § 7f § 7g § 7h § 7i § 7j „§ 15 „§ 19 „§ 31a „§ 34 „§ 34a „§ 37 „§ 48 „§ 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 „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 „§ 94a § 94b „§ 95a § 95b „§ 98a § 98b „§ 105 „§ 105a § 105b „§ 108 „§ 108a „§ 109a § 109b § 109c „§ 111a „§ 129b § 129c „§ 131a „§ 136 „§ 136a Čl. II Čl. III ČÁST DRUHÁ Čl. IV ČÁST TŘETÍ Čl. V Čl. VI ČÁST PÁTÁ Čl. VIII ČÁST ŠESTÁ Čl. IX § 10ga § 10gb § 10gc § 10gd § 10ge ČÁST SEDMÁ Čl. X
304
THE LAW
of 24 August 2016
amending Act No. 277 / 2009 Coll., on Insurance, as amended, and other related laws
Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

Amendment of the Insurance Act
Čl. I
Act No. 277 / 2009 Coll., on Insurance, as amended by Act No. 409 / 2010 Coll., Act No. 188 / 2011 Coll., Act No. 420 / 2011 Coll., Act No. 428 / 2011 Coll., Act No. 458 / 2011 Coll., Act No. 18 / 2012 Coll., Act No. 399 / 2012 Coll., Act No. 99 / 2013 Coll., Act No. 228 / 2013 Coll., Act No. 241 / 2013 Coll., Act No. 303 / 2013 Coll. and Act No. 375 / 2015 Coll., is amended as follows:
1. The heading "Subject matter of adaptation 'is inserted above Section 1 and the heading under Section 1 is deleted.
2. In Article 1 (1), the words "European Community1) 'are replaced by the words" European Union1)' and the words "European Union 40 'are replaced by the words" European Union 40'.
footnotes 1 and 40 are as follows:
"(1) Council Directive 91 / 371 / EEC of 20 June 1991 on the implementation of the Agreement between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance. Directive 95 / 26 / EC of the European Parliament and of the Council of 29 June 1995 amending Directives 77 / 780 / EEC and 89 / 646 / EEC relating to credit institutions, Directives 73 / 239 / EEC and 92 / 49 / EEC concerning non-life insurance, Directives 79 / 267 / EEC and 92 / 96 / EEC concerning life assurance, Directive 93 / 22 / EEC on investment firms and Directive 85 / 611 / EEC on undertakings for collective investment in transferable securities (UCITS), as amended by Directives 2000 / 12 / EC, 2002 / 83 / EC and 2009 / 65 / EC of the European Parliament and of the Council. Directive 2002 / 47 / EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements, as amended by Directive 2009 / 44 / EC of the European Parliament and of the Council. Directive 2002 / 87 / EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73 / 239 / EEC, 79 / 267 / EEC, 92 / 49 / EEC, 92 / 96 / EEC, 93 / 6 / EEC and 93 / 22 / EEC and Directives 98 / 78 / EC and 2000 / 12 / EC of the European Parliament and of the Council, as amended by Directives 2005 / 1 / EC, 2008 / 25 / EC and 2010 / 78 / EU of the European Parliament and of the Council of 9 December 2002 relating to insurance mediation. Council Directive 2004 / 113 / EC of 13 December 2004 establishing the principle of equal treatment between men and women in access to and supply of goods and services. Directive 2005 / 1 / EC of the European Parliament and of the Council of 9 March 2005 amending Council Directives 73 / 239 / EEC, 85 / 611 / EEC, 91 / 675 / EEC, 92 / 49 / EEC and 93 / 6 / EEC and Directives 94 / 19 / EC, 98 / 78 / EC, 2000 / 12 / EC, 2001 / 34 / EC, 2002 / 83 / EC and 2002 / 87 / EC of the European Parliament and of the Council, as amended by Directive 2009 / 65 / EC. Directive 2007 / 44 / EC of the European Parliament and of the Council of 5 September 2007 amending Council Directives 92 / 49 / EEC and 2002 / 83 / EC, 2004 / 39 / EC, 2005 / 68 / EC and 2006 / 48 / EC as regards procedural rules and evaluation criteria for the prudential assessment of acquisitions and increases of holdings in the financial sector. Directive 2009 / 103 / EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles and the control of the obligation to conclude insurance in the event of such liability (codified version). Directive 2009 / 138 / EC of the European Parliament and of the Council of 25 November 2009 on the taking up and pursuit of the business of Insurance and Reinsurance (Solvency II), as amended by Directives 2011 / 89 / EU, 2012 / 23 / EU, 2013 / 58 / EU and 2014 / 51 / EU of the European Parliament and of the Council.
40) 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. '
3. In Paragraph 2 (1), the words "Unless otherwise provided for by other law, this law shall not apply 'shall be replaced by" This law shall not apply' and the words "Pension savings, supplementary pension savings' shall be inserted after the words" State contribution '.
4. In footnote 2, the first sentence is deleted and at the end of footnote 2, the following sentence is added to the separate rows: "Act No. 426 / 2011 Coll., on Pension Savings, as amended. Act No. 427 / 2011 Coll., on Supplementary Pension Savings, as amended. '
5. in Article 2 (2) (d):
"(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;"
6. in Article 2 (2) (e), the words "the Directive of the European Parliament and of the Council governing life assurance and the Council Directive governing non-life insure3)" shall be replaced by the words "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."
footnote 3 is deleted.
7. in Article 2 (2) (g):
"(g) a group without a legal personality consisting of providing mutual security for its members, without any obligation to pay insurance premiums or create technical provisions,";
8. In Article 2, the following paragraph 4 is added:
"(4) This law also does not apply to reinsurance activities carried out or fully guaranteed by the Czech Republic 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. '
9. In Paragraph 3 (1), the words "except for an insurance undertaking which is excluded from the scope of the European Union Directive governing the taking up and pursuit of the business of insurance and reinsurance 'shall be added at the end of the text in point (a).
10. in Article 3 (1) (f), the words "insurance management" are replaced by the words "activities directly arising from authorised insurance activities, in particular activities related to the formation and management of insurance," and the words "the management of assets whose source is the insurance technical reserves" are replaced by the words "investment."
11. in Article 3 (1), the words "except for a reinsurance undertaking which is excluded from the scope of the European Union Directive governing the taking up and pursuit of the business of insurance and reinsurance" shall be added at the end of the text in point (g).
12. In Article 3 (1) (l), the words "the management of reinsurance, the management of assets whose source is the technical reserves of reinsurance undertakings" are replaced by the words "the activities directly resulting from the authorised reinsurance activity, in particular the activities related to the formation of reinsurance and its management, investment, the provision of statistical or actuarial advice in insurance, the analysis and examination of insurance risks, the activities of the holding person and the activities of the financial sector under the law governing the supplementary supervision of financial conglomerates."
13. in Article 3 (1) (m) to (o):
"(m) by investing in the disposal 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, '.
14. in Article 3 (1), point (p) is deleted;
Points (r) to (v) shall be renumbered as points (p) to (u).
15. in Paragraph 3 (1), the words "in the case of life insurance, in the case of the Member State in which the insurance undertaking provides services," shall be added at the end of the text in point (p); in the case of life insurance, the Member State in which the undertaking provides services, and in the case of non-life insurance, the Member State in which the insurance undertaking or its subsidiary is located in another Member State shall be added; "
16. in Paragraph 3 (1), the words "where the branch of an insurance or reinsurance undertaking from a third State established in the Czech Republic is a branch of the insurance or reinsurance undertaking established in the territory of the Czech Republic," shall be added at the end of the text in point (r). "
17. In § 3 (1) (s) and (t), § 24 (2), § 29 (1), § 30 (2), § 33 (1), § 35 (2) and (3), § 42 (2), § 50 (4), § 94 (5) and (6), § 112 (3), § 113 (1), § 114 (2), § 122 (1) and in § 133 (1), the word "relevant" shall be deleted.
18. in Paragraph 3 (1), the following point (u) is inserted after point (t):
"(u) European Supervisory Authority European Insurance and Occupational Pensions Authority,"
Point (u) shall be renumbered as point (v).
19. in Article 3 (2), points (e) to (g) are deleted;
Points (h) to (r) shall be renumbered as points (e) to (o).
20. in Article 3 (2), point (f) is deleted;
Points (g) to (o) shall be renumbered as points (f) to (n).
21. in Article 3 (2) (f), the words "security" are replaced by the words "security."
22. in § 3 (2) (h) and (j), "investment" is replaced by "assets."
23. in Paragraph 3 (2) (l), the words "assistance activities" shall be replaced by "assistance services" and the words "activities" shall be replaced by "services."
24. in Article 3 (2) (m) (4), the words "or registered office" shall be deleted and the words "its registered office or branch" shall be replaced by the words "its split plant to which the insurance relates."
25. in Article 3 (2), the dot is replaced by a comma at the end of point (n) and the following point (o) is added:
"(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.";
26. in Article 3 (3) (d) of the introductory part of the provision, the word "commercial" shall be inserted after the word "other."
27. in Article 3 (6), the following point (b) is inserted after point (a):
"(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 relationship of control or single management, "
Points (b) to (j) shall be renumbered (c) to (k).
28. in Article 3 (6) (c) and (d):
"(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, ';
29. in Paragraph 3 (6), the words "; the share shall be treated in a similar manner to the share of the voting rights of the issuer under the law governing the capital market business" shall be added at the end of the text of point (e).
30. in Article 3 (6) (f), the word "other" is replaced by "controlled" and the terms "and the terms and conditions of their addition under the law governing the capital market business (8)," including footnote 8 and the reference thereto are deleted.
(31) footnote 9 shall be deleted, including the footnote reference.
32. in Article 3 (6) (h), the words "insurance or reinsurance undertaking from a third State," shall be deleted and the words "under the law governing financial conglomerates" shall be inserted after the words "mixed financial holding person."
33.In Article 3 (6) (j), point 2 is deleted.
Points 3 and 4 shall become points 2 and 3.
34. in Article 3 (6) (k):
"(k) a person with a key function who effectively manages an insurance or reinsurance undertaking or controls the business of the 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 activities designated by the insurance or reinsurance undertaking as key; where a monastic system of the internal structure of a domestic insurance or reinsurance undertaking is involved, the person managing it shall also be a member of its Management Board, '.
35. in Article 3, at the end of paragraph 6, the dot is replaced by a comma and the following point (l) is added:
"(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 payment of its debt or on the fulfilment of the debt."
36. In Article 3, the following paragraph 7 is added:
"(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.
(41) Regulation (EC) No 1060 / 2009 of the European Parliament and of the Council of 6 September 2009 on credit rating agencies. ';
37. In Article 4, the following paragraph 5 is added:
"(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. ';
38. In the first sentence of Article 6 (1), the words "and activities related thereto authorised by the competent supervisory authority 'are replaced by the words" within the scope of the authorisation granted by the supervisory authority'.
39. in Paragraph 6 (3):
"(3) Where an insurance or reinsurance undertaking uses the services of an insurance intermediary or a separate liquidator of insurance events in its activities in the Czech Republic, it may only use a person who carries out his business in accordance with the law governing the business of insurance intermediaries and individual insurance claims liquidators in the course of insurance or reinsurance intermediation and in the course of the liquidation of insurance claims. '
footnote 10 is deleted.
40. Paragraph 6 (4) is deleted.
Paragraphs 5 to 7 shall be renumbered paragraphs 4 to 6.
Article 41 (7), including the title, reads:
㤠7
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; and
(c) risk management, compliance control, internal audit and actuarial activities.
(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. ';
42. The following Sections 7a to 7j are inserted after Section 7, including the headings:
㤠7a
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.
§ 7b
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.
(7) The rules and frequency of the evaluation referred to in paragraph 6 shall be laid down in implementing legislation.
§ 7c
Own risk and solvency assessment
(1) As part of its risk management system, the local insurance and reinsurance undertaking carries out its own risk and solvency assessment. risk and solvency assessment shall include at least:
(a) any solvency requirements taking into account the individual risk profile, the approved risk margin limits and the overall strategy of the insurance or reinsurance undertaking;
(b) continued compliance with the requirements relating to technical provisions under Sections 52 to 57 and capital requirements under Sections 73 and 79; where a matching adjustment or volatility adjustment is applied, an assessment of compliance with capital requirements shall be carried out both with and without taking into account such adjustments; and
(c) the extent to which the risk profile of an insurance or reinsurance undertaking deviates from the assumptions to the Solvency Capital Requirement under § 73, calculated according to the standard formula under § 76 or through a partial or full internal model under § 77.
(2) For the purposes of paragraph 1 (a), a domestic insurance undertaking or a domestic reinsurance undertaking shall establish, maintain and apply procedures which are proportionate to the nature, scale and complexity of the risks associated with its activities and which enable it to detect and assess sufficiently reliably the risks to which it is or might be exposed in the short and long term. The legitimacy of the self-assessment methods used must be demonstrated.
(3) In the case referred to in paragraph 1 (c), where a domestic insurance undertaking or a domestic reinsurance undertaking uses an internal model, it shall carry out an assessment together with a recalibration that adapts the internal risk values to the level of risk and calibration of the Solvency Capital Requirement.
(4) The risk and solvency assessment itself forms an integral part of the overall strategy of the domestic insurance or reinsurance undertaking, which takes it into account in its strategic decisions. The insurance or reinsurance undertaking demonstrates to the Czech National Bank the appropriateness of the methods used for this assessment.
(5) The insurance and reinsurance undertaking shall carry out a risk and solvency assessment regularly and without delay after any significant change in its risk profile and inform the Czech National Bank of the results of each assessment. The risk and solvency assessment is not used to calculate the own funds requirement. The Solvency Capital Requirement may only be adjusted in accordance with Sections 90a, 91c, 95a and 95b.
§ 7d
Internal control
(1) An insurance undertaking and a national reinsurance undertaking shall establish, maintain and apply an effective internal control system covering at least the accounting and management procedures, the internal control framework, the appropriate information mechanisms at all levels of the insurance or reinsurance undertaking, and compliance with the legislation governing their business.
(2) The monitoring of compliance of the activities of a domestic insurance undertaking or a domestic reinsurance undertaking with the legislation referred to in paragraph 1 shall include the submission of proposals to the statutory and supervisory body of the insurance or reinsurance undertaking for the purpose of ensuring compliance, the submission of information on the assessment of the possible effects of any changes in the legal environment on the operation of the activities of a domestic insurance undertaking or a domestic reinsurance undertaking and the recognition and assessment of the risk of non-compliance.
§ 7e
Internal audit
(1) Domestic insurance and reinsurance undertakings shall establish, maintain and apply an effective internal audit which includes an assessment of the suitability and effectiveness of the internal control system and other elements of the management and control system.
(2) Internal audit is objective and independent of operational activities.
(3) The statutory or supervisory authority of the domestic insurance undertaking or domestic reinsurance undertaking shall take appropriate measures to ensure that all findings and recommendations made in carrying out the internal audit are implemented.
§ 7f
Actuarial activities
(1) Domestic insurance and domestic reinsurance undertakings shall establish and maintain an effective system ensuring the performance of actuarial activities, which shall include:
(a) coordination of the calculation of technical provisions;
(b) ensuring the adequacy of the methodologies, underlying models and assumptions applied in the calculation of technical provisions used;
(c) assessing the adequacy and quality of the data used in the calculation of technical provisions;
(d) comparing the value of best estimates with experience;
(e) informing the statutory or supervisory authority of the reliability and adequacy of the calculation of technical provisions;
(f) supervision of the calculation of technical provisions under Sections 52 to 57;
(g) assessing the overall concept of subscription, including the way in which the rates of premiums and their adequacy are determined;
(h) assessing the adequacy of the reinsurance arrangements;
(i) activities contributing to the effectiveness of the risk management system, in particular the design of risk models which are the basis for calculating capital requirements under § 73 to 79b and for self-assessment of risks and solvency under § 7c; and
(j) assessing the consistency of the distribution of investment income with the arrangement of the insurance contract.
(2) The performance of the activities referred to in paragraph 1 may be delegated by an insurance or reinsurance undertaking only to a person who can demonstrate knowledge of insurance and financial mathematics and of the expertise and experience of professional and other standards corresponding to the activities carried out so as to be carried out by persons with knowledge and experience appropriate to the nature, scale and complexity of the risks associated with the activities of the insurance or reinsurance undertaking.
§ 7g
Rules for outsourcing
(1) Where a domestic insurance undertaking or a domestic reinsurance undertaking outsources its activity, its responsibility for carrying out the obligations laid down by this law or by a directly applicable European Union provision is not affected.
(2) The insurance or reinsurance undertaking referred to in paragraph 1 shall introduce measures to prevent the occurrence of an undue risk arising from the failure of the service provider and shall ensure that:
(a) the interaction of the service provider with the insurance or reinsurance undertaking and the Czech National Bank; and
Zobrazit všechna ustanovení (1980)

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Regulation Information

CitationAct No. 304 / 2016 Coll., amending Act No. 277 / 2009 Coll., on Insurance, as amended, and other related laws
Regulation Type-
Author-
CollectionCode of Laws
Date of Promulgation23.09.2016
Effective from23.09.2016
Effective until-
Status Valid
The regulation text is for informational purposes only.

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