Obligations of Persons Conducting Insurance/Reinsurance Distribution

Zagreb, July 2023. Obligations of License Holders for Insurance/Reinsurance Distribution to HANFA:  submission of reports  submission of professional liability insurance policies  calculation and payment of fees to HANFA

Contents

1. Data Submission Obligation – Legal Basis

2. Financial and Statistical Reports

3. Changes in Data Submission Obligations from 1 January 2023.

4. Instructions for Submitting Data to HANFA

5. LEI Code

6. Digital Certificate

7. Qualified Electronic Signature

8. Access Form

9. Instructions for Preparing and Submitting Reports → FSI-PO

10. Auxiliary Interface for Preparing the FSI-PO Report

11. Obligation to Submit Professional Liability Insurance Policies

12. Payment of Fees to HANFA 2

13. Data Submission Obligation Subordinate legal obligation for data submission – Regulations published on the HANFA website https://www.hanfa.hr/ Path www.hanfa.hr → Insurance Market → Regulation → Laws and other regulations and general guidelines → Regulations under the Law on Insurance (https://www.hanfa.hr/trziste-osiguranja/regulativa/zakoni-i-drugi-propisi-te-op%C4%87e-smjernice/)

14. Regulation on the form and content of financial and statistical reports of persons licensed to conduct insurance and/or reinsurance distribution (NN 142/22), Annex I, Annex II

15. Regulation on reporting significant changes and reporting upon request of the Croatian Financial Services Supervisory Agency (NN 20/23) 3

Annex I. Regulation 4 Financial Report Forms: Balance Sheet and Profit and Loss Statement Filled by:

1. Insurance Agency Company

2. Insurance/Reinsurance Brokerage Company and/or reinsurance Annex II. Regulation Statistical Report on Invoiced Commission/Fee Amount Forms: SP-1, SP-1 additional Filled by all reporting obligors:

3. Insurance Agency Company

4. Insurance/Reinsurance Brokerage Company

5. Sole Trader Insurance Agency

6. Sole Trader Insurance/Reinsurance Broker

7. Secondary Insurance Intermediary

8. Credit Institutions

9. Investment Companies

10. all legal entities licensed to conduct distribution activities Semi-annual Report Filled for the period 1.1. - 30.6. Submission deadline 31.7. (latest by the end of the month following the half-year for which the report is prepared) Filled by all reporting obligors Annual Report Filled for the period 1.1. - 31.12. Submission deadline 31.3. (latest within three months after the end of the calendar year for which the report is prepared) Filled by all reporting obligors Regulation on the form and content of financial and statistical reports of persons licensed to conduct insurance/and/or reinsurance distribution (NN 142/22) Reporting schedule:

11. Changes in Data Submission Obligations from 1 January 2023. Regulation on the form and content of financial and statistical reports of persons licensed to conduct insurance/and/or reinsurance distribution (NN 142/22) • Financial reports – Balance Sheet, P&L • Statistical reports – SP-1, SP-1 additional • Submission in electronic form signed with a qualified electronic signature, all reporting obligors: Basis: Art. 67 of the Regulation on Office Administration (NN 75/21) • Changes: → Presentation in EUR currency → Presentation of LEI code in financial and statistical reports, obligors:

12. insurance agency companies if: a) they provide cross-border distribution services or b) they achieve annual commission exceeding 132,800 EUR

13. every insurance/reinsurance brokerage company ! other persons licensed to conduct insurance/reinsurance distribution? → NO ! → Presentation of commission by insurance type → HR / FOS / FOE Reports are submitted to HANFA electronically in XML format created according to the prescribed HANFA XML scheme. 5 2023 Report 1.1.-30.6.2023. - deadline 31.7.2023 Report 1.1.-31.12.2023. - deadline 31.3.2024

14. Instructions for Submitting Data to HANFA Data submission is defined by technical instructions 6 Technical instruction for using the electronic data submission system of the Croatian Financial Services Supervisory Agency reports.hanfa.hr Path www.hanfa.hr → Insurance Market → Technical Instructions and Forms (https://www.hanfa.hr/trziste-osiguranja/tehnicke-upute-i-obraci/) Technical instruction for applying electronic signature in the reporting procedure of the Croatian Financial Services Supervisory Agency – 1.1.2023. When signing a file with a qualified electronic signature, the option for separate storage of the original document from the file is used. For more detailed instructions on working with the electronic signing system, contact the certificate issuer. Several prerequisites must be met for successful use of the system:

15. Possession of an authentication certificate (identity verification)

16. Installation according to the issuer's instructions

17. Computer with internet access

18. Registration of reporting obligors

Access Form

5. LEI Code 7 What is an LEI code? • identification code for legal entities participating in the global financial market • unique 20-character alphanumeric code assigned by Zagreb Stock Exchange d.d. For more information visit the Zagreb Stock Exchange pages: zseLEI Service - https://lei.zse.hr/ Who are the obligors for presenting the LEI code in financial and statistical reports?
6. insurance agency companies if: a) they provide cross-border distribution services or b) they achieve annual commission exceeding 132,800 EUR
7. every insurance/reinsurance brokerage company Other persons licensed to conduct insurance or reinsurance distribution are not obliged to present the LEI code.

For more on digital certificates visit the issuer's pages https://www.fina.hr/sto-je-to-digitalni-certifikati 8 Digital certificate is an electronic confirmation representing the electronic identity in electronic transactions and enabling secure and confidential internet communication. The certificate actually represents an electronic identification card containing the key and information about the owner, its validity period, issuer, and certification/signature of the issuer, while simultaneously linking the certificate owner with his public key.

1. Users log in to the HANFA computer system using digital certificates via the appropriate interface on the HANFA website.

2. The digital certificate that uniquely determines the user's identity is located on a chip embedded in a USB stick or so-called smart card.

3. Authentication digital certificates can be obtained at Financial Agency (FINA) branches.

4. Upon receiving the USB stick or smart card with a digital certificate, the user must register their digital certificate using the appropriate interface on the HANFA website.

5. Users whose certificates are already registered in HANFA do not need to register them again.

6. Digital Certificate To submit financial or statistical reports, a digital certificate must be held.

7. Qualified Electronic Signature  obligation: establishment of an office administration information system, defined by Regulation (EU) No 910/2014 of the European Parliament and Council of 23.7.2014.  application: from 1 January 2023.  basis: Art. 67 of the Regulation on Office Administration (NN 75/21)  obligors: all reporting obligors for financial and/or statistical reports: • The office administration information system enables complete electronic office administration. • Submission of documents to parties in electronic form implies the obligation to sign them with a qualified electronic signature. • Electronic communication rules apply to all documents (administrative and non-administrative). • The issuer of the digital certificate is the Financial Agency (phone 0800 0080) 9 Technical instruction for applying electronic signature in the reporting procedure of the Croatian Financial Services Supervisory Agency – 1.1.2023. Path www.hanfa.hr → Insurance Market → Technical Instructions and Forms (https://www.hanfa.hr/trziste-osiguranja/tehnicke-upute-i-obraci/)

8. Access Form Application for using the financial and statistical report submission service of intermediaries and secondary intermediaries in insurance/and/or reinsurance 10 Path www.hanfa.hr → Insurance Market → Technical Instructions and Forms → Technical Instructions (https://www.hanfa.hr/trziste-osiguranja/tehnicke-upute-i-obraci/) Submitted in accordance with point 4. Technical Instruction for using the electronic data submission system of the Croatian Financial Services Supervisory Agency – reports.hanfa.hr Meaning, signed with a qualified signature to pisarnica@hanfa.hr. Or in original, hand-signed to the address: HANFA, Franje Račkog 6, 10000 Zagreb. To obtain authorization for submitting certain types of reports, a completed and signed HANFA access form must be submitted, the template for which can be downloaded from the HANFA website. In case that a financial and statistical report of an intermediary or secondary intermediary in insurance/and/or reinsurance is not signed by the authorized person of the intermediary or secondary intermediary, but by an external service provider using their own qualified electronic signature, a power of attorney authorizing them to submit the prescribed reports on behalf and for the account of the intermediary or secondary intermediary in insurance/and/or reinsurance must be submitted along with this access form.

9. Instructions for Preparing and Submitting FSI Report 11 Full name: Instructions for preparing and submitting financial and statistical reports of persons licensed to conduct insurance/and/or reinsurance distribution. Path www.hanfa.hr → Insurance Market → Technical Instructions and Forms → Technical Instructions (https://www.hanfa.hr/trziste-osiguranja/tehnicke-upute-i-obraci/) Shortened report name: FSI-PO Full name: FSI-PO - Financial and Statistical Report of Intermediaries and Secondary Intermediaries in Insurance/and/or Reinsurance Login to reports.hanfa.hr Select FSI-PO from the menu

12 After logging into the report submission system, select the FSI-PO XML scheme and enter or select from the dropdown menu: • Year for which the report is submitted (e.g., “2023” for 2023) • Period 1 (semi-annual reports for the period 1.1.-30.6.20xx) or 2 (annual reports for the period 1.1.-31.12.20xx) • Institution code / name of reporting obligor (select from dropdown menu) 10. Auxiliary Interface for Preparing FSI-PO Report

Auxiliary interface for preparing FSI-PO report 13 Data is entered directly into the auxiliary interface! The “Export to Excel” option serves for local download of entered data in Excel format, for record-keeping, preparation of own transfer to .xml format, etc. If the reporting obligor decides to independently convert report data into the specified form (XML format), or chooses not to use the auxiliary interface for preparing FSI-PO reports, they independently determine the conversion procedure into the specified form.

General data – filling 14 All data marked with an asterisk (*) must be filled in. Display in Excel

Balance Sheet and P&L – filling 15 Data is entered according to serial numbers, names, and positions of the Balance Sheet and Profit and Loss Statement, which are Annex I of the Regulation, prepared in accordance with the Accounting Act, business accounting policies, and other applicable regulations. Extract from auxiliary interface display Extract from tabular display

SP-1 – filling 16 Form SP-1 is an open-type form into which all insurance/and/or reinsurance companies and clients for whom commission or fee has been invoiced based on activities under the Law on Insurance are entered. Each company/client is entered in one row; if entered through the auxiliary interface, a new row is added by selecting the “Add” button. If there is no commission or fee, the number 0 (zero) must be entered. Extract from tabular display Extract from auxiliary interface display Decimals in the auxiliary interface are separated by a period.

SP-1 additional – filling 17 Form SP-1 additional contains data for each company/client for whom data on invoiced commission is presented in form SP-1:

1. presentation of commission by insurance types for each company/client
2. amount of commission in HR, FOS, FOE, TOTAL If no invoiced commission was achieved for a specific insurance type, it does not need to be presented, i.e., insurance types with invoiced commission of 0 (zero) are not entered. Extract from tabular display Select from dropdown menu

Independent conversion to XML format FSI-PO report 18 Important note in case of independent conversion to XML format: Data on “Insurance Group” or “Insurance Type”, which are entered in the auxiliary interface by selecting from the dropdown menu, are converted into XML format as follows: Insurance Group: Non-life insurance 1 Life insurance 2 Insurance Type: (examples) 01 Accident insurance 1 02 Health insurance 2 10 Motor vehicle liability insurance 10 19 Life insurance 19 20 Annuity insurance 20 and so on.

Submission of FSI Report 19 When entering the report in the auxiliary interface – data can be Validated to correct entry errors. The completed report is signed in accordance with the Technical Instruction for applying electronic signature in HANFA's reporting procedure. The completed report is downloaded through the auxiliary interface and saved as .xml format for submission.

Reminder of other obligations of intermediaries and secondary intermediaries to HANFA

11. Obligation to Submit Professional Liability Insurance Policies • Law on Insurance, Art. 424 prescribes the obligation for professional liability insurance or corresponding guarantee covering professional liability from conducting insurance/reinsurance distribution activities in an amount of at least 1,300,380 EUR per each claim and a total of 1,924,560 EUR for all claims in one year (new amounts are proposed by the European Commission). • Obligators with full insured amounts: intermediaries that are legal entities, sole trader insurance agents, and sole trader brokers in insurance or reinsurance – at 100% of the amount. • Obligators with lower insured amounts:

12. secondary intermediaries in insurance that are travel agencies, car dealerships, and other vehicle rental companies (if registered in the HANFA registry) – at 50% of the amount.

13. other secondary intermediaries in insurance (if registered in the HANFA registry) – at 30% of the amount. Regulation on reporting significant changes and reporting upon request of the Croatian Financial Services Supervisory Agency prescribes the obligation to submit professional liability insurance policies or corresponding guarantees. • For 2023, the valid policy is submitted to the email address pisarnica@hanfa.hr. 21

14. Payment of Fees to HANFA The obligation to pay supervision fees is prescribed by Art. 218 of the Law on Insurance. Fees to HANFA are paid within 15 days after the deadline for submitting the annual financial or statistical report (by 15 April of the current year). Obligors: insurance agency company, sole trader insurance agent, sole trader broker in insurance/and/or reinsurance, insurance/reinsurance brokerage company, credit institution, investment company, and any other legal entity licensed to conduct distribution in insurance/and/or reinsurance. The fee amount is calculated independently by intermediaries in accordance with Art. 5 of the Regulation on calculation, amount, and collection of fees paid to the Croatian Financial Services Supervisory Agency. Path www.hanfa.hr → About Us → Fees (https://www.hanfa.hr/o-nama/naknade/) For 2023, the fee amounts to 0.8 ‰ (per mille) of achieved revenue or invoiced insurance/reinsurance commission amount. Payment details: • MODEL HR 67 • POZIV NA BROJ OIB-3110 • IBAN HR91 2390001 1100329373 22

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1. Regulation on the form and content of financial and statistical reports of persons licensed to conduct insurance/and/or reinsurance distribution (NN 142/22), Annex I, Annex II
2. Regulation on reporting significant changes and reporting upon request of the Croatian Financial Services Supervisory Agency (NN 20/2023)
3. Instructions for preparing and submitting financial and statistical reports of persons licensed to conduct insurance/and/or reinsurance distribution
4. Technical instruction for applying electronic signature in the reporting procedure of the Croatian Financial Services Supervisory Agency - 01.01.2023.
5. Technical instruction for using the electronic data submission system of the Croatian Financial Services Supervisory Agency reports.hanfa.hr Subordinate Acts