What is Full text of Act No. 349 / 2006 Coll.?

Full text of Act No. 349 / 2006 Coll., Act No. 363 / 1999 Coll., on Insurance and on the amendment of certain related laws (Insurance Act), as resulting from subsequent amendments — Full text of Act No. 363 / 1999 Coll., on Insurance and on the amendment of certain related laws (Insurance Act), as resulting from subsequent amendments.

When it became Full text of Act No. 349 / 2006 Coll. effectiveness?

Full text of Act No. 349 / 2006 Coll. became effective date not available.

Is Full text of Act No. 349 / 2006 Coll. still valid?

Yes, Full text of Act No. 349 / 2006 Coll. is still valid and effective.

Full text of Act No. 349 / 2006 Coll. - Full text of Act No. 363 / 1999 Coll., o...

349

PRESIDENT OF THE GOVERNMENT

Announces

full text of Act No. 363 / 1999 Coll., on Insurance and on the amendment of certain related laws (Insurance Act), as follows from the amendments made by Act No. 159 / 2000 Coll., Act No. 316 / 2001 Coll., Act No. 12 / 2002 Coll., Act No. 126 / 2002 Coll., Act No. 39 / 2004 Coll., Act No. 257 / 2004 Coll., Act No. 377 / 2005 Coll., Act No. 381 / 2005 Coll., Act No. 413 / 2005 Coll., Act No. 444 / 2005 Coll., Act No. 57 / 2006 Coll.

THE LAW

on insurance

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

INSURANCE ACTIVITIES, CONDITIONS OF THEIR OPERATIONS AND SUPERVISORY PERFORMANCE

HLAVA I

BASIC PROVISIONS

§ 1

(1) This Act regulates, in accordance with the law of the European Communities (1), the conditions for the operation of insurance and reinsurance activities and supervision of the operation of insurance and reinsurance activities and supplementary pension insurance carried out by the Czech National Bank.

(2) This Act is governed by:

(a) the operation of insurance and reinsurance activities by an insurance or reinsurance undertaking established in the Czech Republic;

(b) the pursuit of an insurance activity in the territory of the Czech Republic by an insurance undertaking established in the territory of another Member State of the European Union and in the territory of the States of the European Economic Area;

(c) the pursuit of an insurance activity within the territory of the Czech Republic by an insurance undertaking established in a State other than that referred to in points (a) and (b); and

(d) the exercise of supervision in the insurance sector.

(3) Save as otherwise provided in specific legislation, this law shall not apply to the implementation of sickness insurance, pension insurance, social security, supplementary pension insurance with a State contribution and public health insurance under special legislation1a).

(4) Furthermore, this law does not apply to:

(a) the activities of mutual support associations and cooperatives whose performance varies according to the resources available and which require each of their members to pay the same contribution;

(b) an activity involving the conclusion of obligations to provide performance only in the event of death, if it does not exceed the average cost of the funeral or if non-monetary performance is provided;

(c) an activity consisting in providing assistance in the event of a failure or accident in a road vehicle, the performance of a service which occurs in the territory of a Member State [Paragraph 2 (2) (a)], in which the provider of that service has his establishment and where that provider is not an insurance undertaking and is involved in:

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 and, 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 their destination in the same State.

§ 2

Definition of terms

(1) For the purposes of this Act:

(a) insurance undertaking domestic insurance undertaking, insurance undertaking from another Member State or insurance undertaking from a third State;

(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 registered office in the territory of a Member State of the European Union or in the territory of another State constituting the European Economic Area which has been granted official authorisation to pursue an insurance activity;

(d) by an insurance undertaking from a third State, a legal person having its registered office in a State other than that referred to in (b) or (c) which has been granted official authorisation to pursue an insurance business;

(e) insurance activities for the conclusion of insurance contracts under special legislation2) insurance undertakings, insurance management and performance of insurance contracts, the provision of assistance services and the processing of personal data, including birth numbers, related to such activities. Part of the insurance business is the management of assets the source of which is the technical provisions of the insurance undertaking (hereinafter referred to as "investments'), the conclusion of contracts with reinsurance undertakings to ensure the insurance undertaking's obligations under its insurance contracts (passive reinsurance) and the action to prevent and mitigate damage to the damage caused by the undertaking (captive activity),

(f) a reinsurance legal person whose business is to take over insurance risks transferred by an insurance undertaking or another reinsurance undertaking, established in the territory of the Czech Republic, operating a reinsurance activity under this law, or a legal person having its registered office abroad, operating a reinsurance activity in accordance with the legislation of the country of its registered office;

(g) the reinsurance activity of concluding contracts whereby the reinsurance undertaking undertakes to provide the insurance undertaking within the agreed range of performance, if the accident is specified in the contract, and the insurance undertaking undertakes to pay the reinsurance undertaking in the contract a specified part of the premiums on the insurance contracts concluded by the insurance undertaking which are the subject of the contract (hereinafter referred to as the reinsurance contract), the conclusion of reinsurance contracts between reinsurance undertakings, the management of reinsurance and the provision of performance of reinsurance contracts. The reinsurance activity involves the management of assets the source of which is the reinsurance undertaking's technical reserves,

(h) activities related to insurance or reinsurance activities, brokerage activities carried out in connection with insurance or reinsurance activities, advisory activities related to the insurance of natural and legal persons and investigations into claims carried out by separate claims liquidators under a contract with an insurance undertaking and other activities with the approval of the Czech National Bank;

(i) the solvency capacity of the insurance or reinsurance undertaking to ensure, by its own resources, the payment of insurance or reinsurance obligations;

(j) the management of insurance, a set of activities aimed at maintaining and updating the state of insurance contracts;

(k) insurance risk the degree of probability of occurrence of an insurance event caused by an insurance risk;

(l) the policyholder is the person who has concluded an insurance contract with the insurance undertaking;

(m) a set of insurance contracts concluded by the insurance group;

(n) the rights and obligations arising out of these insurance contracts and the investments appropriate to that insurance group;

(o) the earned part of the premiums written under the contract concluded, which is related in time to the current accounting year, irrespective of whether the premiums have been paid;

(p) the unearned part of the premiums written under the insurance contract that is related to the following financial year, regardless of whether the premiums have been paid;

(r) the feasibility of the commitments evidenced by the ability of the insurance or reinsurance undertaking to cover all liabilities arising from the insurance or reinsurance business carried on, including liabilities due in subsequent financial years;

(s) the winding-up of an insurance event, a set of insurance-related activities which starts with the initiation of the investigation necessary to establish the insurance undertaking's obligation to comply with this obligation and end with the setting of the level of the insurance performance;

(t) assistance services provided to persons who are in difficulty during travel or when they are away from their place of residence; is an undertaking by an undertaking of an insurance undertaking operating an insurance business under the insurance sector No 18 of Part B of Annex 1 to this Act to provide immediate assistance to the person entitled under the insurance contract on the basis of the advance payment of the premium, if the person is in difficulty as a result of the insurance event,

(u) the terms and conditions applied by the insurer to the conclusion of insurance contracts for each insurance sector, for groups of those sectors or for individual types of insurance covered by the insurance sector, in particular general insurance conditions, special or supplementary insurance conditions;

(v) life insurance: a set of insurance sectors listed in Part A of Annex 1 to this Act;

(w) non-life insurance: a set of insurance sectors listed in Part B of Annex 1 to this Act;

(x) the technical interest rate guaranteed by the share of investment income in life insurance;

(y) an internal control system for mechanisms and instruments aimed in particular at assessing the trueness, integrity and storyline of information on the business of the insurance or reinsurance undertaking; the search and documentation of the risks associated with the activities of the insurance or reinsurance undertaking and the determination of the likelihood of negative effects of those risks; to establish working procedures to ensure the substantive accuracy of the data reported in the insurance or reinsurance undertaking's accounts and to test their correctness; to verify compliance of the insurance or reinsurance undertaking's activities with the legislation; assessing the economy, efficiency and effectiveness of the management of the insurance or reinsurance undertaking, using in particular its financial, property and personnel resources;

(z) the address of the natural person's place of residence or place of residence; if the natural person is resident in several places, the address of the residence where the natural person is resident with the intention of staying there permanently;

(aa) supervision in the insurance sector and control activity in this law or by a specific law of the specified scope carried out by the Czech National Bank in the private insurance sector, activities related thereto and a set of instruments intended for its execution;

(bb) the control activities of the Czech National Bank to check compliance with this law or with specific legislation laid down by the rules governing the operation of private insurance activities, including financial supervision and supervision of the activities of the insurance company in the group;

(cc) financial supervision of the management of the insurance undertaking, in particular its solvency, the creation of technical provisions, including mathematical provisions, investments under this law, compliance with specific legislation laid down by administrative and accounting procedures and the reliability of internal control systems;

(dd) supervision of the activities of an insurance undertaking within the group by checking the facts relating to the related party of the insurance undertaking, its partner and its associate of the member of the insurance undertaking and affecting or likely to affect the financial situation of the insurance undertaking;

(ee) a person participating in the management of an insurance or reinsurance undertaking, a person who is not a member of the insurance or reinsurance undertaking's statutory or supervisory body, a procuring entity or a representative of its branch and who, by agreement, participation in an insurance or reinsurance undertaking or otherwise, has a significant influence on its activities.

(2) For the purposes of this Act:

(a) by a Member State, a Member State of the European Union or another State constituting the European Economic Area;

(b) the home Member State of the Member State in which the head office of the insurance undertaking is situated;

(c) the Member State of the branch, the Member State in which the insurance undertaking from the Member State operates on the basis of the right to establish branches;

(d) carrying out insurance activities on the basis of the right to establish branches, any permanent presence (establishment) of an insurance undertaking from a Member State in the territory of a Member State other than the Member State in which that insurance undertaking is situated; such presence may take the form of an organisational component of an undertaking, such as an agency, or may be an office managed by an insurance undertaking's own staff or by a person who is independent but has a permanent right to act on behalf of an insurance undertaking in the same way as if the Agency had acted;

(e) the freedom to provide temporary services to the right of an insurance undertaking having its registered office in a Member State to carry out an insurance activity on a temporary basis in the territory of a Member State other than that in which the insurance undertaking has its registered office, to the extent that the authorisation granted to it by the competent supervisory authority of the country of its registered office is not a permanent presence in the territory of that other Member State;

(f) the Member State of commitment, the Member State in which the policyholder is domiciled as a natural person or the policyholder as a legal person has its registered office or branch of the company, in the case of a life insurance obligation, or the Member State where the insurance risk is situated, in the case of a non-life insurance obligation;

(g) the Member State where the insurance risk is situated;

1. in which the property is situated if the insurance covers either the buildings or the buildings and their content, if the content is covered by the same insurance contract,

2. where the vehicle is registered if the insurance covers vehicles of any type;

3. where the policy holder has entered into an insurance contract if it is an insurance contract with a duration of 4 months or less, which is covered by insurance risks during travel or on leave, irrespective of the non-life insurance sector in which those risks fall,

4. in which the policy holder as a natural person has his residence or the policy holder as a legal person has its business unit to which the insurance contract relates;

(h) the Member State of provision of services, the Member State of commitment, where the undertaking is insured by an insurance undertaking from a Member State or its branch located in a Member State other than that of the undertaking;

(i) a qualifying holding, directly or indirectly, or their sum, in the capital or voting rights of a legal person representing at least 10% or giving rise to a significant influence on the management of that legal person;

(j) the supervisory authority responsible for overseeing the business of the insurance undertaking;

(k) close links

1. a relationship between two or more persons in which one person has a direct or indirect share of the capital, the sum of which is at least 20%;

2. a relationship between two or more persons in which one person has a direct or indirect interest in voting rights, the sum of which shall be at least 20%;

3. the relationship between two or more persons in which one person controls the other person; or

4. the relationship between two or more persons controlled by the same person;

(l) a regulated market for financial instruments located in a Member State and regulated in accordance with the laws of that State or a financial market situated in a country which is not a Member State, provided that it has been recognised by the insurance undertaking's home Member State and meets comparable requirements to that of a Member State, in particular any financial instruments traded on that market, shall have a quality comparable to that of the instruments traded on a regulated market or on regulated markets of that Member State;

(m) the corresponding assets to cover insurance liabilities for which the option of performance of insurance in a particular currency has been agreed through assets expressed or realised in that currency (the Conversion Rule);

(n) risk capital the amount due in the event of death minus the mathematical reserve;

(o) the mathematical reserve of life insurance,

(p) a claim from an insurance undertaking for all amounts owed by the insurance undertaking to insured persons, policyholders, beneficiaries or any injured party with a direct right to claim a claim against the insurance undertaking and incurred in direct insurance, including amounts deferred by the party to the abovementioned persons, unless certain parts of the debt are known. The insurance premiums payable by the insurance undertaking as a result of the non-conclusion or cancellation of such insurance contracts or direct insurance operations in accordance with the applicable law of those contracts or operations before the start of the winding-up procedure shall also be considered as an insurance claim.

(3) For the purposes of this Act, the following definitions shall apply:

(a) participation in the exercise of a material influence which is such a significant influence on the management or operation of an undertaking which is not under control is not only temporary and whose purpose is to participate in the operation of the undertaking; the direct or indirect share assessed separately or their sum representing at least 20% of the capital or voting rights shall always be considered as a material influence, unless control is involved;

(b) a member of the person who has a participation;

(c) an associate person in which another person participates or is associated with another person by such a relationship that the statutory, management or supervisory authorities or the majority of their members constitute, for most of the financial year, persons who are statutory, management or supervisory authorities, or other persons who are not in charge of the associated person;

(d) an insurance holding person controlling a person who is not a mixed financial holding person under the Financial Conglomerates Act and whose main activity is to acquire and hold shares in controlled persons who are exclusively or principally insurance undertakings, insurance undertakings from third States or reinsurance undertakings, at least one of those controlled persons being an insurance undertaking;

(e) an insurance holding person with a mixed activity controlled by a person other than an insurance undertaking, an insurance undertaking from a third State, a reinsurance undertaking or an insurance holding company or a mixed financial holding person under the Financial Conglomerates Act, at least one controlled person being an insurance undertaking;

(f) a group of 2 or more persons with close links.

Operation of insurance activities

§ 3

(1) Insurance or reinsurance activities within the territory of the Czech Republic may only be carried out by an insurance or reinsurance undertaking under this Act, which has been authorised by the Czech National Bank, unless otherwise provided for in this Act.

(2) An insurance company with its registered office in the Czech Republic may, under the conditions laid down by this Act, operate an insurance business if it was established as a public limited company or cooperative.

(3) An insurance or reinsurance undertaking with its registered office in the Czech Republic established only as a public limited company may operate a reinsurance activity under the conditions laid down by this Act. The law does not apply to the operation of reinsurance activities within the territory of the Czech Republic by a reinsurance undertaking or an insurance undertaking established abroad, with the exception of paragraph 5, second sentence and § 35a (2) (c).

(4) The local insurance undertaking may only carry out insurance or reinsurance activities and related activities to the extent of the authorisation granted to it by the Czech National Bank. The insurance undertaking which has been authorised to pursue the reinsurance business may not take over the insurance risks which are covered by the insurance contract itself. The reinsurance undertaking may only carry out reinsurance and related activities to the extent of the authorisation granted to it by the Czech National Bank.

(5) The intermediary business in the insurance industry in the Czech Republic can be operated only for insurance activities operated by an insurance company under this law or for a reinsurance undertaking. The insurance or reinsurance undertaking may only use the services of an insurance intermediary or a separate insurance event liquidator, which is registered under special legislation2a).

§ 4

(1) Unless otherwise provided for in this law, the legal status of the insurance and reinsurance undertaking shall be governed by the Commercial Code.

(2) A local insurance undertaking established as a public limited liability company or reinsurance undertaking is only entitled to issue shares with which a voting right is attached in a book-entry form.

(3) A local insurance undertaking or reinsurance undertaking is required to act with caution in the performance of its activities, in particular not to carry out such activities in a way that damages assets entrusted to it by third parties or threatens their security, stability, and stability, and stability of persons with an insurance undertaking linked to them. To this end, the domestic insurance and reinsurance undertaking shall establish and maintain internal control systems throughout its activities, regularly evaluate information from them and take appropriate measures in due time.

Operating insurance business by insurance company located outside the Czech Republic

§ 5

repealed

§ 5a

Operating insurance business by an insurance undertaking from another Member State

(1) An insurance undertaking from another Member State is entitled to pursue an insurance activity within the territory of the Czech Republic on the basis of the right to establish its branches (establishment) or on the basis of the freedom to provide temporary services, to the extent that it has been authorised to pursue an insurance activity in the country of its registered office.

(2) Before establishing a branch of an insurance undertaking from another Member State within the territory of the Czech Republic, the Czech National Bank must be informed by the competent supervisory authority of the home Member State at least of:

(a) the plan of activity, the list of insurance sectors of insurance activities carried out in the Czech Republic and the internal organisational structure of the branch;

(b) the address of the location of the branch in the territory of the Czech Republic to which all communications are sent by representatives of an insurance undertaking from another Member State;

(c) the name of the head of the branch, which must be entitled to bind and represent the insurance undertaking when dealing with third parties and courts in the Czech Republic; and

(d) that the undertaking has the required solvency margin.

(3) Before starting the business of a branch of an insurance undertaking from another Member State, the Czech National Bank shall inform the insurance undertaking and the competent supervisory authority of the home Member State within 2 months of the date of receipt of the information referred to in paragraph 2 of this Article of the conditions under which the business of the branch may be carried out in the Czech Republic.

(4) The branch of an insurance company from another Member State may be set up and commence business as soon as an insurance company from another Member State which intends to establish its branch in the Czech Republic has received information from the Czech National Bank on the terms of the branch's activities in the Czech Republic or by a futile expiry of a period of 2 months from the date of receipt of the notification pursuant to paragraph 2 of the Czech National Bank. This is without prejudice to the obligation to register under Section 28 (4) of the Commercial Code.

(5) An insurance undertaking from another Member State shall be entitled to operate on the territory of the Czech Republic on the basis of the freedom to provide temporary services on condition that:

(a) inform the competent supervisory authority of the home Member State before commencing this activity and inform it of the extent of the insurance that it intends to carry out in the Czech Republic;

(b) The Czech National Bank shall receive the information referred to in paragraph 6 in accordance with European Community law.

(6) Before starting an activity in the territory of the Czech Republic by an insurance undertaking from another Member State under the freedom to provide services temporarily, the following information shall be communicated to the Czech National Bank by the competent supervisory authority of the home Member State in accordance with the law of the European Communities:

(a) confirmation that an insurance undertaking from another Member State owns assets at least equal to the required solvency margin under Paragraph 22;

(b) the extent of insurance by insurance sector which an insurance undertaking from another Member State is authorised to offer in accordance with an authorisation granted to it by the competent supervisory authority of the home Member State;

(c) the extent of insurance by insurance sector which an insurance undertaking from another Member State intends to offer in the Czech Republic;

(d) the name, surname and date of birth and the address of the residence of the claims representative in the Czech Republic appointed for the treatment of insurance claims if insurance is to be carried out according to the insurance sector No 10 (a) listed in Part B of Annex No 1 to this Act.

§ 5b

Other obligations of insurance undertakings from another Member State operating an insurance business in the Czech Republic under the right to establish branches or under the freedom to provide temporary services and to supervise such activities

(1) An insurance undertaking from another Member State which operates in the territory of the Czech Republic its insurance activity on the basis of the right to establish branches or on the basis of the freedom to provide temporary services is required to provide the Czech National Bank with evidence of its activities requested by the Czech National Bank.

(2) If the Czech National Bank finds that an insurance undertaking from another Member State does not fulfil the obligations applicable to this activity in the Czech Republic, it shall require the insurance undertaking to remedy the deficiencies identified.

(3) If an insurance undertaking from another Member State does not bring its business into compliance, the Czech National Bank shall inform the competent supervisory authority of the home Member State accordingly.

(4) If the measures taken by the competent supervisory authority of the home Member State do not lead to the removal of the identified deficiencies in the activities of an insurance undertaking from another Member State, the Czech National Bank shall take such measures to prevent that insurance undertaking from continuing to breach its obligations. The Czech National Bank shall inform the competent supervisory authorities of the home Member State of these measures. If necessary in the interests of consumer protection, the Czech National Bank will prohibit such an insurance company from entering into new insurance contracts in the Czech Republic or from extending its obligations under already agreed insurance contracts.

(5) For control purposes, an insurance company from another Member State that carries on an insurance activity in the territory of the Czech Republic under the right to establish branches or under the freedom to provide temporary services is obliged to inform the Czech National Bank of the terms and conditions of insurance used in the conclusion of insurance contracts and their changes.

§ 5c

Operating insurance activities by an insurance undertaking from a third State

(1) An insurance undertaking from a third State may only operate in the territory of the Czech Republic through a branch under the conditions laid down by this Act and by special legislation, on the basis of an authorisation granted by the Czech National Bank (§ 8 (4)).

(2) When granting authorisation to conduct insurance activities to an insurance undertaking from a third State, the Czech National Bank may request the necessary information directly from the competent supervisory authority of the country of the head office of that insurance undertaking and, upon request of that supervisory authority, provide information on the insurance undertaking's activities in the Czech Republic through its branch. If the exchange of information between the competent supervisory authorities does not result from international agreements, an insurance company from a third State is required, at the request of the Czech National Bank, to obtain the necessary information from the competent supervisory authority of the country of the head office of the insurance company.

(3) Authorisation to conduct insurance activities on the territory of the Czech Republic through a branch may be granted if the following conditions are met:

(a) an insurance undertaking from a third State is entitled, under the legislation in force in its country of residence, to pursue insurance activities according to the insurance sectors of life or non-life insurance;

(b) the insurance company from a third State shall establish its branch in the Czech Republic,

(c) an insurance undertaking from a third State undertakes to establish and maintain at the place of the branch of accounting specifically for an activity it operates in the Czech Republic and to keep all documents relating to that activity;

d) an insurance company from a third State shall appoint its authorised representative in the Czech Republic, which must be approved before the start of its activities by the Czech National Bank,

e) an insurance company from a third State has its property in the territory of the Czech Republic, the value of which is equal to at least one half of the minimum guarantee fund provided for in Paragraph 22 (2) and places at least one quarter of that minimum as a principal in an account separately established with a bank located in the Czech Republic or with a branch of a foreign bank which cannot be treated without the consent of the Czech National Bank,

(f) an insurance undertaking from a third State undertakes to maintain the required solvency margin pursuant to Paragraph 22;

(g) an insurance undertaking from a third State shall submit a business plan pursuant to Article 8 (2);

(h) a third-country insurance company shall appoint a claims representative in the Czech Republic for the treatment of insurance claims if insurance is to be carried out according to the insurance sector No 10 (a) listed in Part B of Annex No 1 to this Act.

(4) Where an insurance undertaking from a third State in its country of residence has been authorised to carry out an insurance activity under the insurance sectors of life and non-life insurance, the insurance undertaking may not offer life and non-life insurance at the same time through one of its branches in the Czech Republic. However, at the same time as life insurance, accident and illness insurance under insurance sectors 1 and 2 listed in Part B of Annex 1 to this Act may be offered, provided that such co-operation has been authorised by the competent supervisory authority of the home Member State.

(5) Save as otherwise provided in this Act, the provisions of this Act relating to the pursuit of an insurance business by a domestic insurance undertaking and the exercise of supervision of such business shall apply mutatis mutandis to the pursuit of an insurance activity by an insurance undertaking from a third State through its branch established in the Czech Republic.

(6) Any insurance undertaking from a third State which has applied in more than one Member State for authorisation to pursue an insurance business through its branches or has already obtained such authorisation from more than one Member State may apply for the following advantages:

(a) the required solvency margin referred to in Article 22 shall be calculated in relation to the full extent of the business carried out within the Member States; in this case, only activities carried out by all branches established within Member States shall be taken into account for the purposes of this calculation;

(b) the deposit required under paragraph 3 (e) shall be deposited in only one of those Member States;

(c) the property which is intended to cover the requirements of the guarantee fund may be situated in any Member State in which the insurance undertaking of a third State carries on its insurance business.

(7) Benefits referred to in paragraph 6 may be granted only simultaneously. An application for an advantage shall be submitted by an insurance undertaking from a third State to the competent supervisory authorities of the Member States in which the insurance business is to be carried out. The application shall indicate the competent supervisory authority of the Member State which will in future supervise compliance with the solvency conditions of the insurance undertaking through its branches established within the Member States. The choice of the supervisory authority must be justified by the insurance undertaking. The deposit referred to in paragraph 3 (e) shall be made in that Member State.

(8) Advantages may be granted only if the competent supervisory authorities of all the Member States in which the application has been lodged agree with them. The advantage shall apply from the date of dispatch to the other competent supervisory authorities that the selected competent supervisory authority referred to in paragraph 7 shall supervise the solvency situation for all insurance activities carried out through branches of an insurance undertaking from a third State established in the Member States.

(9) The selected competent supervisory authority referred to in paragraph 7 shall receive from the other Member States the information necessary to carry out the control activities over the overall solvency of branches of an insurance undertaking from a third State established in their territory. At the request of one or more participating Member States, the advantages granted by all participating Member States shall be withdrawn.

§ 6

Insurance supervision

(1) Insurance supervision is carried out in particular in the interests of consumer protection by the Czech National Bank.

(2) Insurance supervision is subject to insurance undertakings engaged in insurance activities in the Czech Republic, domestic insurance undertakings and reinsurance undertakings engaged in reinsurance activities and legal and natural persons engaged in insurance intermediation activities in that territory, to the activity of separate claims liquidators and other activities related to insurance and reinsurance activities, and to other natural and legal persons, to the extent provided for by this law or by specific legislation.

(3) In the exercise of supervision in insurance, the Czech National Bank cooperates with international organisations, with the supervisory authorities of other States, with central administrative authorities and insurance organisations.

(4) Any person involved in the exercise of supervision in the insurance sector must fulfil the conditions of credibility laid down in Paragraph 10a and must have the appropriate professional and qualification qualifications to perform the activity.

§ 6a

Scope of the Czech National Bank

Czech National Bank

(a) exercise supervision in insurance and pension insurance to the extent provided for by this Act and by specific legislation2b);

(b) decide on the rights and obligations of legal and natural persons, where provided for by this law or by specific legislation2b);

(c) keep lists of responsible actuaries, forced managers, liquidators authorised to dispose of insurance or reinsurance undertakings and register of insurance intermediaries and individual liquidators and publish them in the form of an official communication from the Czech National Bank in the Bulletin of the Czech National Bank ("Bulletin");

(d) cooperate with international organisations and foreign authorities within its competence;

(e) inform the public of the insurance services to the extent and in the manner laid down by this law and by specific legislation.

§ 6b

repealed

§ 6c

Information to be provided to the Commission of the European Communities

(1) The Czech National Bank shall communicate to the Commission of the European Communities and to the competent supervisory authorities of the Member States which, in accordance with the provisions of Paragraph 39a, may obtain information which is subject to the obligation of confidentiality under this law.

(2) The Czech National Bank shall communicate to the Commission of the European Communities information relating to private insurance in accordance with the relevant provisions of European Community law or upon request.

HLAVA II

CONDITIONS FOR OPERATING INSURANCE AND INSURANCE ACTIVITIES

§ 7

Authorisation to conduct insurance or reinsurance activities

(1) An insurance or reinsurance activity is only authorised by the Czech National Bank and subject to its statutory and real residence in the Czech Republic. The authorisation issued by the Czech National Bank under the conditions laid down by this Act shall be valid for all Member States and shall entitle the domestic insurance or reinsurance undertaking to carry out insurance or reinsurance activities on the territory of another Member State either through a branch established in a Member State or through the freedom to provide temporary services.

(2) The authorisation of the Czech National Bank is required by a national insurance or insurance undertaking from a third State to apply for prior to the extension or change of insurance or reinsurance business, unless such changes are subject to a notification obligation only.

(3) The authorisation of a national insurance undertaking or insurance undertaking from a third State to pursue an insurance or reinsurance activity in the territory of the Czech Republic or to extend or alter that activity shall be granted by the Czech National Bank on a written request containing the particulars provided for in this Act. The Czech National Bank shall decide on this request no later than 6 months after the date of its delivery to the Czech National Bank.

(4) The authorisation referred to in paragraph 1 may not be granted if:

(a) the conditions laid down by this law are not fulfilled;

(b) members of the statutory or supervisory bodies of an insurance or reinsurance undertaking or a representative of a branch of an insurance undertaking, do not fulfil the conditions of credibility or do not give assurance of the prudential management of the insurance or reinsurance undertaking, taking into account their qualifications and experience;

(c) close links between the insurance undertaking and other natural or legal persons prevent the effective exercise of supervision in the insurance sector under this law;

(d) the effective exercise of supervision in the insurance sector under this law is hindered by the legislation of a State which is not a Member State governed by one or more natural or legal persons with whom an insurance undertaking from a third State has close links, or by the difficulty of enforcing the obligations imposed by that legislation;

(e) there are reasonable grounds for suspecting that the capital and other financial resources of the insurance or reinsurance undertaking come from criminal activity or come from unidentified sources; the origin of the capital and other financial resources of the applicant is required to prove to the Czech National Bank; or

(f) the granting of an authorisation would be contrary to the international treaties by which the Czech Republic is bound and which were published in the Collection of International Treaties.

(5) An authorisation to pursue an insurance business shall be granted according to the life insurance sector or non-life insurance sector or to the non-life insurance groups listed in Part C of Annex 1 to this Act; In the case of an extension of an activity under Paragraph 10 (1), an authorisation may also be granted to an insurance sector which is not listed in Annex 1 to this Act but which can be operated in accordance with the legislation of the State in which the activity is to be extended. The Czech National Bank may limit the required scope of activity if the applicant's ability to operate safely within the scope specified in the application is not sufficiently demonstrated.

(6) An insurance undertaking may not be authorised to carry out an insurance activity simultaneously under the life insurance and non-life insurance sectors, except for an insurance undertaking applying for an insurance authorisation under the life insurance sector which may be authorised to carry out an insurance activity simultaneously under insurance sectors 1 and 2 of non-life insurance.

(7) The Czech National Bank will not grant authorisation to commence insurance activities until it is informed of the owners of the insurance or reinsurance undertaking and of the size of their shares. The Czech National Bank shall not grant authorisation unless the proper and prudent management of the insurance or reinsurance undertaking is ensured or, taking into account the required scope and nature of the business of the insurance or reinsurance undertaking, a guarantee of its financial stability is given.

(8) An insurance undertaking which has been authorised to pursue an insurance activity under one or more non-life insurance sectors may enter into an insurance contract also for an insurance risk falling within the sector for which it has not been authorised, provided that such risk:

(a) it is linked to an insurance risk falling within the sector for which it has been authorised; and

(b) relates to an article which is insured against the insurance risk referred to in (a); and

(c) is covered by an insurance contract which covers the insurance risk referred to in (a);

("supplementary insurance ').

(9) Additional insurance may not be an insurance risk covered by the non-life insurance sector No 14, 15 or 17.

(10) An insurance undertaking, a third-country insurance undertaking and a domestic reinsurance undertaking are required to establish a list of assets in accordance with § 21c and keep it up to date on the date on which the decision granting them authorisation to pursue insurance or reinsurance activities takes effect.

Citation	Full text of Act No. 349 / 2006 Coll., Act No. 363 / 1999 Coll., on Insurance and on the amendment of certain related laws (Insurance Act), as resulting from subsequent amendments
Regulation Type	Declared full text
Author	-
Collection	Code of Laws

Date of Promulgation	12.07.2006
Effective from	-
Effective until	-
Status	Valid

Full text of Act No. 349 / 2006 Coll.

Full text of Act No. 363 / 1999 Coll., on Insurance and on the amendment of certain related laws (Insurance Act), as resulting from subsequent amendments

Contents

ČÁST PRVNÍ

HLAVA I

§ 1

§ 2

§ 3

§ 4

§ 5

§ 5a

§ 5b

§ 5c

§ 6

§ 6a

§ 6b

§ 6c

HLAVA II

§ 7

§ 8

Contents

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