Regulatory Alerts2008-06-27
FMA Circular on Insurance Undertakings Acting as Tied Agents under Article 28 WAG 2007
The Financial Market Authority (FMA) clarifies that insurance undertakings are prohibited from acting as tied agents for legal entities under Article 28 of the 2007 Securities Supervision Act (WAG 2007). This restriction derives from Article 3(3) of the Insurance Supervision Act (VAG), which limits insurers to core insurance activities and non-insurance businesses directly connected thereto, thereby preventing abstract solvency risks. Consequently, despite statutory recourse liability mechanisms, the potential impairment of insurer solvency and insured parties' interests renders such tied agency activities unlawful for insurance undertakings.
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