What is Full text of Act No. 409 / 2004 Coll.?

Full text of Act No. 409 / 2004 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. 409 / 2004 Coll. effectiveness?

Full text of Act No. 409 / 2004 Coll. became effective date not available.

Is Full text of Act No. 409 / 2004 Coll. still valid?

Yes, Full text of Act No. 409 / 2004 Coll. is still valid and effective.

Full text of Act No. 409 / 2004 Coll. - Full text of Act No. 363 / 1999 Coll., o...

409

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 amendments made by Act No. 159 / 2000 Coll., Act No. 316 / 2001 Coll., Act No. 12 / 2002 Coll., Act No. 126 / 2002 Coll. and Act No. 39 / 2004 Coll.

THE LAW

on insurance

Parliament has decided on this law of the Czech Republic:

ČÁST PRVNÍ

ACTIVITIES IN INSURANCE, CONDITIONS OF THEIR OPERATIONS AND PERFORMANCE OF STATE SUPERVISORY

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 the State supervision of the operation of insurance and reinsurance activities and supplementary pension insurance carried out by the Ministry of Finance (hereinafter "the Ministry").

(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 state supervision in the insurance sector;

(e) the exercise of intermediary activities 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 legislation. (1a)

(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 Ministry 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 relating thereto. 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, brokering activities carried out in connection with insurance or reinsurance activities, consultancy activities related to the insurance of natural and legal persons and investigations into insurance events carried out by separate claims liquidators under contract with the insurance undertaking and other activities with the agreement of the Ministry;

(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) State supervision in the insurance sector and control activity in this law or by a specific law of a specified scope by the Ministry of Private Insurance, activities related thereto and a set of instruments intended for its execution;

(bb) the control activities of the Ministry 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 undertaking 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, the investments under this law, compliance with specific legislation laid down by administrative and accounting procedures and the reliability of internal control systems;

(dd) by supervising the activities of an insurance undertaking within the group, the monitoring of the facts relating to the related undertaking of the insurance undertaking, its partner and its related company 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 substantially affects its business;

(ff) brokering activities in the insurance sector professional activities for the conclusion of insurance or reinsurance contracts and related activities;

(gg) the insurance agent is a legal or natural person who carries out an intermediary business in the insurance sector under contract with the insurance undertaking;

(hh) by an insurance or reinsurance broker, a legal or natural person who carries out an intermediary business in the insurance sector under contract with a person who is interested in concluding an insurance or reinsurance contract;

(ii) by a separate liquidator of claims, a natural or legal person who, under a contract concluded with, on his behalf and on behalf of the insurance undertaking, carries out the investigation necessary to establish the extent of his obligation to comply with the insurance contract.

(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) the pursuit of an insurance activity on the basis of the right to establish branches of 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 the insurance undertaking has its registered office; 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 head 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 head office, to the extent that the authorisation granted to it by the competent authority of the country of its registered office is not such as to have 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 competent authority, the authority supervising the business of the insurance undertaking;

(k) a close link between two or more persons in which one person has a direct or indirect share of the capital or voting rights, which represents 20% or more, or controls that person or group;

(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.

(3) For the purposes of this Act, for the purpose of exercising State supervision over insurance groups:

(a) any participation in another company, or direct or indirect holding of 20% or more of the voting rights or capital of the company;

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

(c) the associated company of the company in which a person has a participation;

(d) an insurance holding company controlling a company whose main activity is to acquire and hold shares in controlled companies which are exclusively or principally insurance undertakings, insurance undertakings from third States or reinsurance undertakings, at least one of those controlled companies being an insurance undertaking;

(e) an insurance holding company with a mixed activity controlled by a company other than an insurance undertaking, an insurance undertaking of a third State, a reinsurance undertaking or an insurance holding company of which at least one controlled company is 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 Ministry, 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. This law does not apply to the operation of reinsurance activities in the Czech Republic by a reinsurance undertaking or insurance undertaking established abroad, except for § 35a (2) (d).

(4) The local insurance undertaking may only carry out an insurance or reinsurance business and related activities to the extent of the authorisation granted to it by the Ministry. 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 activities and related activities to the extent of the authorisation granted to it by the Ministry.

(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.

§ 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

Insurance companies located abroad

(1) An insurance company established abroad (hereinafter referred to as the "foreign insurance company") may, under the conditions laid down by this Act, operate insurance activities through its organisational component.

(2) When granting authorisation to conduct insurance activities to a foreign insurance company, the Ministry is entitled to require the necessary information directly from the authority of the state supervision of the country of the head office of that insurance company and, at the request of this supervisory authority, to provide data on the activities of the foreign insurance company in the Czech Republic through its organisational component. If the exchange of information does not result from international agreements between the national supervisory authorities, the foreign insurance company shall, at the request of the Ministry, ensure that the necessary information is obtained from the national supervisory authority of the country of the head office of the insurance undertaking.

(3) The insurer community known as Lloyd's (hereinafter referred to as the insurer community) is considered to be a foreign insurance undertaking for the purposes of this Act. At the same time, the head of the organisational body of that insurance undertaking must be entitled to bind individual Community insurers.

§ 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 Ministry shall, in accordance with the law of the European Communities, be informed by the competent 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 the branch of an insurance undertaking from another Member State, the Ministry shall inform the insurance undertaking and the competent 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 undertaking from another Member State may be set up and commence business as soon as an insurance undertaking from another Member State which intends to establish its branch in the Czech Republic has received information from the Ministry 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 referred to in paragraph 2 to the Ministry. 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 authority of the home Member State before starting this activity and inform it of the extent of the insurance that it intends to carry out in the Czech Republic;

(b) the Ministry 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 temporary services, the following information shall be communicated to the Ministry, in accordance with the law of the European Communities, by the competent authority of the home Member State:

(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 entitled to offer in accordance with an authorisation granted to it by the competent 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 an insurance undertaking from another Member State operating an insurance business within the territory of the Czech Republic under the right to establish branches or under the freedom to provide temporary services and the exercise of state supervision over that activity

(1) An insurance undertaking from another Member State which operates its insurance business within 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 is required to provide the Ministry with evidence of its activities requested by the Ministry.

(2) If the Ministry finds that an insurance undertaking from another Member State fails to comply with the obligations applicable to this activity in the Czech Republic, it shall be required to require that insurance undertaking to remedy the deficiencies identified.

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

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

(5) For the purposes of control, an insurance company from another Member State which carries out an insurance business in the Czech Republic on the basis of the right to establish branches or on the basis of the freedom to provide temporary services is required to inform the Ministry of the insurance conditions applied to 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 Ministry (Section 8 (4)).

(2) When granting authorisation to carry out insurance activities to an insurance undertaking from a third State, the Ministry is entitled to request the necessary information directly from the competent authority of the country of the head office of that insurance undertaking and to provide information on the insurance business of the insurance undertaking in the Czech Republic on request through its branch. If the exchange of information between competent authorities does not result from international agreements, an insurance undertaking from a third State shall, at the request of the Ministry, ensure that the necessary information is obtained from the competent authority of the country of residence of the insurance undertaking.

(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 Ministry;

(e) an insurance company from a third State has its assets 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 the account separately established with a bank established in the Czech Republic or with a branch of a foreign bank which cannot be treated without the consent of the Ministry;

(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, injury and disease 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 authority of the home Member State.

(5) Unless otherwise provided for 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 State supervision of that activity 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 authorities of the Member States in which the insurance business is to be carried out. The application shall specify the competent 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 Authority must be justified by the insurance undertaking. The deposit referred to in paragraph 3 (e) shall be made in that Member State.

(8) Benefits may be granted only if the competent 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 authorities that the selected competent authority referred to in paragraph 7 will 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 authority referred to in paragraph 7 shall receive from the other Member States the information necessary for carrying out the control activities above 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

State supervision in insurance

(1) State supervision in insurance is carried out in particular by the Ministry in the interests of consumer protection. It shall draw up an annual report on this activity, which shall include an assessment of the developments in the insurance market, in particular an overview of the insurance and reinsurance undertakings which have been granted or withdrawn an authorisation to carry out insurance or reinsurance activities, corrective and penalty measures adopted by the Ministry under this Act, an overview of the legislative changes adopted and prepared in the field of insurance and the overall results of the insurance developments offered in the insurance market and shall publish it in the Financial Rapporteur by 30 September of the calendar year at the latest.

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

(3) In the exercise of State supervision in insurance, the Ministry shall cooperate with international organisations, with the national supervisory authorities of other States, with central administrative authorities and insurance organisations.

(4) Any person involved in the exercise of State supervision in the insurance sector must fulfil the requirement of credibility in accordance with Paragraph 10a and must have the appropriate professional and qualification qualifications to perform the activity. Details of this activity shall be laid down in the Ministry's organisational rules.

§ 6a

Scope of the Ministry

Ministry

(a) exercise State supervision in insurance and pension insurance to the extent provided for by this law and by special legislation, 2a)

(b) decide on the rights and obligations of legal and natural persons, where provided for in this law or in specific legislation, 2a)

(c) keep lists of responsible actuaries, forced managers, liquidators authorised to liquidate an insurance or reinsurance undertaking and a register of insurance intermediaries and separate claims liquidators;

(d) cooperate with other administrative authorities and institutions to the extent at least laid down by this law and by specific legislation;

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

(f) inform the public about insurance services to the extent and in the manner laid down by this law and by specific legislation;

(g) once a year, it shall prepare a report on its activities submitted to the Government by the Minister for Finance.

§ 6b

Ministry staff

(1) The staff of the Ministry to carry out activities related to the exercise of State supervision in insurance and pension insurance or to provide similar activities in the course of other tasks must comply with the conditions of credibility (§ 10a) and must be fully competent to act.

(2) The qualifications of the staff member referred to in paragraph 1 shall always be at least full secondary (general or professional) education.

§ 6c

Information to be provided to the Commission of the European Communities

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

(2) The Ministry shall communicate to the Commission of the European Communities information relating to private insurance in accordance with the relevant provisions of European Community legislation or at its 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 Ministry and subject to its statutory and real residence in the Czech Republic. The authorisation granted by the Ministry under the conditions laid down in this Act shall be valid for all Member States and shall entitle the domestic insurance 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 Ministry shall be requested by a national insurance undertaking or insurance undertaking from a third State before 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 carry on an insurance or reinsurance activity in the Czech Republic or to extend or alter that activity shall be granted by the Ministry on the basis of a written request containing the particulars provided for in this Act. The Ministry shall decide on this request no later than 6 months after the date of its notification to the Ministry.

(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 insurance 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 demonstrate to the Ministry; 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 Ministry is entitled to 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 Ministry will not grant authorisation to commence insurance activities until it has been informed of the owners of the insurance or reinsurance undertaking and of the size of their shares. The Ministry 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:

Citation	Full text of Act No. 409 / 2004 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	13.07.2004
Effective from	-
Effective until	-
Status	Valid

Full text of Act No. 409 / 2004 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

Contents

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