Guidelines for Insurance Distributors on Distributing Insurance Products with Statutory Insurance Contract Obligations

Pursuant to Article 15(4) of the Act on the Croatian Financial Services Supervisory Agency (Official Gazette, Nos. 140/05 and 12/12), the Croatian Financial Services Supervisory Agency, at a meeting of its Governing Board held on 14 February 2019, adopted the following

GUIDELINES FOR INSURANCE DISTRIBUTORS ON DISTRIBUTING INSURANCE PRODUCTS WITH STATUTORY INSURANCE CONTRACT OBLIGATIONS

I. Insurance distributors distributing insurance products for the purpose of concluding an insurance contract, where conclusion is prescribed as a party's obligation by a special law, are instructed to professionally inform their clients, in accordance with the best interests of the client and for the protection of persons using that client's services, about their obligation to conclude an insurance contract in the manner prescribed by the law governing the performance of that client's activity.

II. Insurance contracts from the previous point are, for example, contracts whose conclusion covers professional liability for acts, omissions, or errors made by insurance or reinsurance intermediaries, ancillary insurance intermediaries, auditors, architects, lawyers, tax advisors, experts, liquidators, etc., in the course of their professional activities, including insurance contracts that legal entities are obliged to conclude when performing their registered activities in accordance with regulations governing those activities, such as liability insurance and insolvency guarantee insurance that travel agencies are obliged to conclude under the law governing tourism services.

III. By acting in accordance with these guidelines, an insurance distributor does not assume the client's obligation to conclude an insurance contract as required by a special law under which the client must act in performing its professional or registered activity, since the client remains responsible for concluding the insurance contract as prescribed by that special law. These Guidelines instruct distributors to additionally alert the client to its obligation to conclude an insurance contract in a specific type of insurance in accordance with regulations governing that registered activity (for example, to the prescribed insured amount so that a lower insurance amount is not contracted than stipulated by those special regulations). The appendix to these guidelines contains a list of selected regulations containing provisions on the mandatory conclusion of insurance contracts, which lists insurance companies are instructed to regularly update with positive regulations for compliance with these guidelines.

IV. These guidelines enter into force on the date of their delivery to insurance companies holding a license for concluding insurance contracts covered by these guidelines, and which are instructed without delay to notify persons performing insurance distribution activities on their behalf.

CLASS: 011-02/19-04/04 REGISTRATION NO.: 326-01-50-51-19-1 Zagreb, 14 February 2019.

CHAIRMAN OF THE GOVERNING BOARD dr. sc. Ante Žigman

EXAMPLES OF MANDATORY INSURANCE

Type of mandatory insurance	Legal provision
Nuclear Liability	Act on Nuclear Damage Liability (Official Gazette No. 143/1998)
Article 2: "Operator" is a person to whom the competent state authority has issued a permit for construction or use of a nuclear facility.
Article 16: (1) The operator is obliged to conclude and maintain insurance or have a financial guarantee to cover its liability for nuclear damage, in an amount that may not be less than the amount specified