Regulatory Alerts2020-01-01
Official Position on the Application of the Insurance Act (Official Gazette Nos. 30/15, 112/18, 63/20, 133/20) Regarding the Authorization to Perform Insurance Distribution Activities
The Croatian Financial Services Supervisory Agency (Hanfa) issued an official position interpreting the Insurance Act to clarify that leasing companies constitute a distinct category of insurance intermediaries authorized to perform distribution activities independently of their core leasing operations, either on behalf of insurers or upon client instruction. Hanfa will register qualifying leasing companies in its official register upon license issuance and fulfillment of statutory conditions, thereby harmonizing supervisory practices across financial markets. This clarification ensures that leasing companies may conduct insurance distribution without being restricted to activities directly linked to their primary leasing business.
1 The Croatian Financial Services Supervisory Agency (hereinafter: Hanfa) received on April 29, 2022, a request regarding the interpretation of provisions of the Insurance Act (Official Gazette Nos. 30/15, 112/18, 63/20, 133/20, hereinafter: ZOS), specifically Article 401(1), Article 402(1)(11), and Article 407. Given that the aforementioned request points to the necessity of promoting, organizing, and supervising measures for the effective functioning of financial markets in terms of harmonizing the actions of supervisory authorities under Article 2(2) of the Act on the Croatian Financial Services Supervisory Agency (Official Gazette Nos. 140/05 and 12/12), Hanfa proceeds as follows. Based on Article 15(4) of the Act on the Croatian Financial Services Supervisory Agency, Hanfa adopted at its Management Board meeting held on August 31, 2022, the OFFICIAL POSITION
I. Paragraph 1 of Article 401 of the ZOS stipulates that insurance distribution activities within the Republic of Croatia may be performed by insurance distributors registered in the Agency's register, namely insurance intermediaries, ancillary insurance intermediaries, and insurance companies. Point 11 of Paragraph 1 of Article 402 of the ZOS establishes leasing companies as a category of insurance intermediaries, which perform insurance distribution activities in the name and on behalf of one or more insurance companies or upon instruction of a client, and are established in accordance with the law governing the establishment of leasing companies (Leasing Act, Official Gazette No. 141/2013; hereinafter: ZOL). This confirms that a leasing company is a special category of insurance intermediary which, like other categories of insurance intermediaries and in accordance with the conditions stipulated by the ZOS, may perform insurance distribution activities independently of any other registered activities, meaning that these activities may or may not be linked to leasing operations.
II. Paragraph 1 of Articles 407 of the ZOS stipulates that credit institutions, investment companies, leasing companies, HP – Hrvatska Pošta d. d., and the Financial Agency are authorized to perform insurance distribution activities based on a license for performing insurance distribution activities, exclusively in the name and on behalf of one or more insurance companies or exclusively upon instruction of a client, in accordance with the provisions of the ZOS. In the case of a leasing company, the application for issuance of a license for performing insurance distribution activities is submitted to Hanfa (ZOS; Paragraph 3, Article 407), and upon fulfillment of the conditions stipulated in Article 407 of the ZOS, Hanfa registers the leasing company in the register of leasing companies that perform insurance distribution exclusively for insurance companies or exclusively upon instruction of a client (ZOS; Point 9, Paragraph 1, Article 411). This confirms that Hanfa will register a leasing company in the leasing companies' register upon issuance of the license for performing insurance distribution activities and fulfillment of other conditions stipulated by the ZOS.
2 III. This official position is published on Hanfa's website. CLASS: 008-02/21-03/01 REFERENCE NUMBER: 326-01-70-72-22-9 Zagreb, August 31, 2022. CHAIRMAN OF THE MANAGEMENT BOARD Dr. sc. Ante Žigman