Transcript
Page 1: Regulation and Supervision of Intermediaries in Serbia Insurance Intermediaries Serbia.pdf · Other Insurance Intermediaries Insurance brokerage and agency activities may also be

Ljubljana, 6.11.2014. Aleksandra Miletić,

National bank of Serbia

Regulation and Supervision

of Intermediaries in Serbia

Page 2: Regulation and Supervision of Intermediaries in Serbia Insurance Intermediaries Serbia.pdf · Other Insurance Intermediaries Insurance brokerage and agency activities may also be

OUTLINE

Legal Framework,

Professional requirements,

Information presented by the

intermediaries,

Registration,

Supervisory challenges,

The new Insurance Law.

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1. LEGAL FRAMEWORK

The Insurance Law was adopted in 2004.

Licensed Insurance Agents and Brokers

(companies and natural persons), are

subjects of supervision by the National

bank of Serbia,

The Law is partially harmonized with

IMD1.

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Bylaws relating to insurance intermediaries

Decision on the content and manner of taking the

professional exam for insurance brokerage

and/or agency services and manner of proving

eligibility for obtaining the relevant certificates,

from 2006,

Decision on terms of granting approval to banks

to act as insurance agents, from 2006,

Decision оn the contents and manner of keeping

of a register of data on insurance companies and

other registers, from 2006.

Page 5: Regulation and Supervision of Intermediaries in Serbia Insurance Intermediaries Serbia.pdf · Other Insurance Intermediaries Insurance brokerage and agency activities may also be

Brokerage and Agency activities

Brokerage activities include activities related to

connecting the insured and/or policyholder with

an insurance company, in order to negotiate the

conclusion of an insurance contract,

Agency activities are performed in accordance

with an agent contract on representation on

behalf and for an insurance company .

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Types of Insurance Intermediaries

Insurance brokers: Licensed Insurance Brokerage Companies by the NBS, incorporated

as a joint stock company or a limited liability company,

Brokerage Companies cannot provide insurance agency services.

Exceptionally, the brokerage company can engage in insurance

agency activities for a certain types of risk,

Certified brokers authorized by the NBS (brokers natural persons

working in a Insurance Brokerage Company).

Insurance agents: Licensed Insurance Agencies, incorporated as a joint stock company

or a limited liability company or Licensed Contractors (insurance

agents/entrepreneurs) by the NBS,

Banks or tourist agencies may provide insurance agency services,

as additional activities to their principal professional activity, with an

NBS prior approval,

Certified agents authorized by the NBS (agents natural persons

engaged in insurance agency activities).

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2. PROFESSIONAL REQUIREMENTS -

BROKERAGE COMPANIES

The application for a NBS license to conduct insurance brokerage

activities includes, amongst others:

list of shareholders and business plan;

initial capital (financial capacity);

evidence that persons proposed for members of the management

and supervisory board meet the conditions prescribed;

evidence of adequate personnel and technical equipment capacity of

the company;

insurance against liability for damages arising from activities or

unconditional financial bank guarantee accepted by the National Bank

of Serbia for the insured sum and/or the sum not less than the RSD

equivalent of EUR 100,000;

evidence of relatedness based on capital or in another way with

insurance companies, insurance agency companies or insurance

brokerage companies.

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PROFESSIONAL REQUIREMENTS - AGENCY

COMPANIES/ INSURANCE AGENTS

The conditions for incorporation and performance of insurance

agency activities in an insurance agency company equal the

mentioned conditions for incorporation of an insurance brokerage

company.

The only difference is the non-submission of evidence of

insurance against liability along with the application for a license

to conduct insurance agency activities.

However, a preliminary agency contract or the agency contract

with the insurance company, with the provision of the insurance

company’s right to consistent monitoring of the execution of the

contract must be submitted instead.

The conditions for incorporation of an insurance

agents/entrepreneurs are less demanding (initial capital,

fit&proper requirements, preliminary agency contact and other

conditions)

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Responsibility for the activities of an Insurance

Agency/Insurance Agent

The insurance company shall be liable for the actions

performed within the insurance agency activities,

The insurance agency or agent is liable to the insured for

any damage caused by false representation or negligence

of the insurance agency or agent or for the damage caused

due to the fact that the insurance agency or agent did not

disclose their acting as an agency or agent,

The general manager of the insurance company and/or the

individual endowed with special authorizations who signed

the contract on agency is liable to the insurance company

for the damage to the company arising from such contract.

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Other Insurance Intermediaries

Insurance brokerage and agency activities may

also be performed by other legal entities based

on a special law and the approval of the National

Bank of Serbia (in terms of the fulfillment of

conditions on human resource and technical

capacity) (e.g. travel agencies, commercial banks

– bancassurance, etc).

Pursuant to Article 44 of the Law on Compulsory

Traffic Insurance, motor third party liability

insurance policies may also be sold by legal

entities authorised for motor vehicle inspection.

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Professional examination for the performance of

brokerage/agency activities

Insurance brokerage/agency activities in an insurance

brokerage/agency company or an insurance agent may be

performed only by employees of this company, who are

authorised by the National Bank of Serbia.

The National Bank of Serbia gives authorisation for the

performance of insurance brokerage/agency activities to a person

who has passed the professional examination for the performance

of brokerage/agency activities (ogranised by the NBS) and who

complies with other prescribed conditions by the Insurance law.

The Decision on the Content and Manner of Taking the

Professional Exam for Insurance Brokerage and/or Agency

Services and Manner of Proving Eligibility for Obtaining the

Relevant Certificates, prescribes the content and method of taking

the professional exam for insurance brokerage and/or agency

services.

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3. INFORMATION PRESENTED BY THE BROKERAGE

COMPANIES

Insurance brokerage company must explain to and advise the insured of the

circumstances relevant to the conclusion of the insurance contract and is

specially obliged to:

Draft an appropriate risks analysis;

Draft a solvency analysis of the insurance company;

Mediate in the execution of insurance contracts with the insurance company;

Inform the insurance company that the insured wants to conclude the insurance

contract, offer to the insured the insurance conditions and provide them with

information on the method for calculating the premium;

Check the wording of the insurance policy;

Offer assistance to the insured during the validity term of the insurance contract;

Monitor the execution of the insurance contract by the insured,

Draft proposal to amend the closed insurance contract for the purpose of ensuring a

higher level of safety to the insured.

The insurance brokerage company is obliged to inform the insured of all legal

and economic relationships with the insurance company affecting the

impartiality of the insurance brokerage company while fulfilling its obligations

to the insured.

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4. REGISTRATION OF INTERMEDIARIES

The National Bank of Serbia keeps registries of

licensed insurance brokerage and agency

companies and agents, records of licenses

granted to certified brokers and certified agents,

records of legal entities which perform the

activities of brokerage and agency according to a

separate law (banks),

Records are continuously updated to reflect all

changes in information.

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The insurance intermediaries market in Serbia is

comprised of:

-61 insurance brokerage companies,

-22 insurance agency companies,

-110 insurance/agents entrepreneurs,

-19 banks performing insurance agency,

-15,170 natural persons licensed to engage in

insurance agency/brokerage activities:

-166 certifies brokers,

-11,413 certified agents,

-3,591 certified brokers and agents.

Number of insurance intermediaries

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5. SUPERVISORY CHALLENGES

Provisions of the Insurance Law relating to the issuance of

licenses and to supervision of insurance companies apply

accordingly to insurance brokers and agents (licenses,

approvals, registration and off-site and on-site

supervision and supervisory measures),

According to the NBS By–Law, the NBS Council adopts the

Plan for on-site controls, on the proposal of the

Administration for supervision of financial institutions within

the NBS,

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SUPERVISION PROCESS - OFF-SITE

Analyses of annual financial statements and

other regular reports,

Identifying problems and determining potential

cause of problems,

Sending intermediary written notes about

observed problems, with a deadline to make

necessary corrections,

NBS undertakes specific action regarding every

intermediary, if the proposed requirements are

not fulfilled.

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SUPERVISION PROCESS - ON-SITE

Focused on compliance with law and by-laws,

Major fields: relationship with an insurance

company, records of policies and internal rules,

Performed as well through supervision of an

insurance company – distribution channels and

costs,

In specific situations extends to market conduct

and relationship with clients, especialy

information requirements.

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Supervisory challenges II

Due to the underdevelopment of the insurance market,

most licensed brokers and agents often do not possess

adequate knowledge,

Due to these reasons, the main focus of intermediaries is

singing of insurance contracts and gaining new clients, and

less attention is focused on the rights and obligations that

result from the conclusion of an insurance contract,

However significant progress has been achieved in

insurance intermediation from 2004: regulated sales

network has been adopted, only licensed agents and

brokers can operate in the market and better protection of

policyholders has been achieved.

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6. The new Insurance Law

The new Insurance Law, prepared by the NBS,

envisages further harmonisation with IMD1, as

intermediaries have a central role in the distribution of

insurance products, in order to enhance consumer

protection,

The main novelties are:

- reinsurance mediation has been introduced,

- the ability of intermediaries to conduct business activities directly

or indirectly related to insurance,

- exclusion of the possibility that the insurance broker may

perform insurance agency activities,

-

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The new Insurance Law (II)

- a bank, public post operator and a financial leasing company

may engage in insurance agency activities, as supplementary

activities, with prior approval of the National Bank of Serbia,

- the director of the insurance broker or insurance agency

company must be employed and have residence in the Republic

of Serbia,

- certified brokers/agents can be hired on the basis of

employment or other legal basis in accordance with the Labour

Law,

- introduction of the obligations of education and training of these

certified brokers/agents, in order to maintain better protection of

insurance clients,

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The new Insurance Law (III)

- the obligations of insurance intermediates on providing

information to clients is enhanced and detailed information

conditions have been prescribed,

- the right to register complaints about intermediaries is

regulated,

- exceptions for intermediaries has been introduced in

accordance with IMD1,

- freedom to provide (re)insurance mediation services and the

freedom of establishment has been introduced, that will apply

from the day of accession of RS to the EU.


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