An insurance intermediary means a natural or legal person who, on the basis of a Czech national bank (CNB) license, is authorized to provide services on the financial market.
Categories of insurance intermediaries
Due to the amendment to the Act of the Distribution of Insurance and Reinsurance, the categorization of intermediaries has been changed and simplified. Now we distinguish three basic categories:
- independent intermediary – has the broadest authorization, based on one license from the CNB, can act as an agent if it represents an insurance company or as a broker if it represents a client.
- tied agent – on the basis of the entry in the register, may represent only one insurance company or an independent intermediary. He must have a written agreement with the represented person.
- supplementary insurance intermediary – on the basis of registration, may only provide insurance which is ancillary to the service provided or the goods supplied and only as an ancillary activity. This can be done for the more represented parties with whom the contract was concluded.
Terms for obtaining the licence of independent intermediary
The Czech National Bank shall grant an authorization to act as an independent intermediary to the applicant if:
- has its registered office in the Czech Republic,
- is credible; if the applicant is a legal person, the credibility is demonstrated by a member of the statutory body or by another person with a similar competence; the condition of credibility must also be met by the controlling entity of the applicant who is a legal entity. The credibility of a person means his integrity and professional and business integrity.
- is professionally qualified; if the applicant is a legal person, the professional qualification is demonstrated by a member of the statutory body or another person with a similar competence if these persons actually manage the distribution of insurance or reinsurance or are responsible for this activity. Qualified person is considered to be a person who has sufficient knowledge, experience in financial market and sufficient management experience,
- the data on the applicant's person listed in the application allows the applicant to be identified in the relevant register,
- is not an independent intermediary, a tied agent or a supplementary insurance intermediary with a home Member State other than the Czech Republic,
- the close connection of the applicant with another person or the direct or indirect share of another person who exceeds 10% of the applicant's voting rights or basic capital, does not prevent or hinder the effective exercise of supervision of the independent intermediary; in close connection with a person who has its registered office or a registered office in a State which is not a Member State, or the direct or indirect holding of such a person in excess of 10% of the applicant's voting rights or basic capital, the law of that State and the method of its enforcement, impede the effective exercise of supervision over an independent intermediary.
Process, duration of the authorization and its renewal
An application for authorization to act as an independent intermediary may be submitted only electronically. In addition to the requirements established by the Administrative Procedure Code, the application contains information on the fulfilment of the conditions of operation of an independent intermediaries’ activities provided for in this Act and the communication of persons who are closely interconnected with the applicant or have a direct or indirect share exceeding 10% of the applicant’s voting rights or capital of the applicant such share. The application shall be accompanied by documents certifying compliance with these conditions.
If the Czech National Bank fully complies with the request, it shall put the individual intermediary into the register. In such a case, the decision is not made in writing. The decision becomes legally enforceable at the time of the inserting independent intermediary into the register. The Czech National Bank shall immediately inform the applicant about registration as an independent intermediary.
Authorization to operate as independent intermediary continues until the end of the calendar year following the calendar year in which the independent intermediary was entered into the register.
The Czech National Bank shall extend the authorization to an independent intermediary for an additional 12 months after the payment of an administrative fee of 5,000 CZK.
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