Insurance Act – Unofficial Consolidated Text (Official Gazette Nos. 30/15, 112/18, 63/20, 133/20, 151/22, 152/24, 151/25)

1
Unofficial Consolidated Text
Insurance Act
(Official Gazette Nos. 30/2015, 112/2018, 63/2020, 133/2020, 151/2022, 152/2024, 151/2025)
CHAPTER I.
INTRODUCTORY PROVISIONS
Subject of the Act
Article 1.
This Act regulates:

1. conditions for the establishment, operation and cessation of insurance companies, reinsurance undertakings and mutual insurance societies
2. conditions under which insurance and reinsurance companies from other Member States and third countries may carry out insurance or reinsurance business in the Republic of Croatia
3. supervision of insurance and reinsurance companies within a group
4. supervision over supervisory subjects
5. commissioner, reorganisation, special administration, liquidation and bankruptcy of insurance companies, reinsurance undertakings and mutual insurance societies
6. reporting to EIOPA and the European Commission and cooperation with other competent authorities
7. consumer protection
8. operation of insurance and/or reinsurance pools (associations) and the national insurance office
9. conditions for the establishment, operation and cessation of insurance distribution business and/or reinsurance distribution business
10. penalty provisions.

Transposition and Implementation of European Union Legal Acts and International Treaties
Article 2.
(1) This Act transposes the following European Union acts into Croatian legislation:

1. Council Directive 91/371/EEC of 20 June 1991 on the implementation of the Agreement between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance (OJ L 205, 27. 7. 1991.)
2. Council Directive 91/674/EEC of 19 December 1991 on the annual financial statements and consolidated financial statements of insurance companies (OJ L 374, 31. 12. 1991.) as last amended by Directive 2006/46/EC of the European Parliament and of the Council of 14 June 2006 amending Council Directives 78/660/EEC on the annual accounts of certain types of companies, 83/349/EEC on consolidated accounts, 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions and 91/674/EEC on the annual accounts and consolidated accounts of insurance companies (Text with EEA relevance) (OJ L 224, 16. 8. 2006.)
3. Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) (Text with EEA relevance) (OJ L 26, 2. 2. 2016.) as last amended by Directive (EU) 2023/2864 of the European Parliament and of the Council of 13 December 2023 amending certain Directives as regards the establishment and functioning of a single European access point (OJ L, 2023/2864, 20. 12. 2023.)
4. Council Directive 2004/113/EC of 13 December 2004 on implementing the principle of equal treatment between men and women in access to and supply of goods and services (OJ L 373, 21. 12. 2004.)
5. Directive 2009/138/EU of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) (Text with EEA relevance) (OJ L 335, 17. 12. 2009.) as last amended by Directive (EU) 2023/2864 of the European Parliament and of the Council of 13 December 2023 amending certain Directives as regards the establishment and functioning of a single European access point (OJ L, 2023/2864, 20. 12. 2023.).
   (2) This Act ensures the implementation of the following European Union acts:
6. Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on macro-prudential oversight of the financial system in the Union and establishing a European Systemic Risk Board (OJ L 331, 15. 12. 2010.) as last amended by Regulation (EU) 2019/2176 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1092/2010 on macro-prudential oversight of the financial system in the Union and establishing a European Systemic Risk Board (Text with EEA relevance) (OJ L 334, 27. 12. 2019.)
7. Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EZ and repealing Commission Decision 2009/78/EZ (OJ L 331, 15. 12. 2010.) as last amended by Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (Text with EEA relevance) (OJ L 150, 9. 6. 2023.)
8. Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EZ and repealing Commission Decision 2009/79/EZ (OJ L 331, 15. 12. 2010.) as last amended by Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority), Regulation (EU) No 1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority), Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) 2016/1011 on indices used as reference values in financial instruments and financial contracts or for measuring the performance of investment funds and Regulation (EU) 2015/847 on information accompanying transfers of funds (Text with EEA relevance) (OJ L 334, 27. 12. 2019.)
9. Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EZ and repealing Commission Decision 2009/77/EZ (OJ L 331, 15. 12. 2010.) as last amended by Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (Text with EEA relevance) (OJ L 150, 9. 6. 2023.)
10. Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EU of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (Text with EEA relevance) (OJ L 12, 17. 1. 2015.) as last amended by Commission Delegated Regulation (EU) No 2021/1256 of 21 April 2021 amending Delegated Regulation (EU) 2015/35 as regards the inclusion of sustainability risks in the management of insurance and reinsurance undertakings (Text with EEA relevance) (OJ L 277, 2. 8. 2021.)
11. Commission Delegated Regulation (EU) 2019/1935 of 13 May 2019 amending Directive (EU) 2016/97 of the European Parliament and of the Council as regards regulatory technical standards adapting the basic amounts in euros for professional liability insurance and for the financial soundness of insurance and reinsurance intermediaries (Text with EEA relevance) (OJ L 301, 22. 11. 2019.)
12. Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (Text with EEA relevance) (OJ L 333, 27. 12. 2022.) (hereinafter: Regulation (EU) 2022/2554).
    (3) This Act ensures the implementation of international treaties concluded and ratified in accordance with the Constitution of the Republic of Croatia, to the extent they relate to the distribution of insurance and reinsurance business in the Republic of Croatia.

Ensuring Implementation of EU Regulations, Regulatory and Implementing Technical Standards, and Guidelines of European Supervisory Authorities and Powers of the Croatian Financial Services Agency
Article 2.a
(1) The Croatian Financial Services Agency (hereinafter: the Agency) is responsible and competent for implementing and supervising the application of EU regulations under Article 2 of this Act and for supervising the subjects under points 3 and 4 of Article 1.
(2) The Agency shall publish on its website the texts of guidelines to which the Agency and/or supervisory subjects fully or partially comply, or with which they intend to align by a certain deadline, together with notices containing:
a) the supervisory subjects to which the guideline applies b) whether the guideline is applied fully or partially c) the start date of application of the guideline, with relevant transitional periods, if applicable.
(3) Guidelines issued by European supervisory authorities within their competences are binding on the Agency and persons whose obligations are defined by this Act and relevant regulations, provided that:
a) the Agency has clearly declared, in accordance with the procedure prescribed by the regulations establishing European supervisory authorities, that it commits to fully or partially comply with a specific guideline or intends to align with it by a certain deadline b) the Agency has published on its website a notice of the declaration under point a), specifying when the guideline enters into force and begins to apply. (4) The Agency and supervisory subjects are obliged to take all necessary actions to align with the guidelines under paragraph 2 of this Article. (5) The Agency informs the European Commission, EIOPA and competent authorities of Member States about its tasks and responsibilities assigned by this Act. (6) The provisions of this Article regarding guidelines apply mutatis mutandis to EIOPA recommendations. (7) If the European Commission changes the amounts specified in Articles 3, 6, 158, 400 and 424 of this Act, the amounts amended and published by the European Commission in the Official Journal of the European Union shall apply from their effective date. (8) When this Act grants the Agency the power to adopt regulations, such regulations shall be adopted by the Agency's Management Board.

Definitions
Article 3.
For the purposes of this Act, certain terms have the following meanings:

1. "insurance company" means a legal entity with its registered office in the Republic of Croatia that carries out life or non-life insurance business, holds an Agency permit for insurance business and is registered in the court register of the competent commercial court
2. "own insurance company" means an insurance company owned by a financial entity that is not an insurance or reinsurance company, or a group of insurance/reinsurance companies as defined in Article 297 of this Act, or by a non-financial entity, with the aim of providing insurance coverage solely for the risks of the owning entity or its group; "own reinsurance undertaking" means a reinsurance company owned by a financial entity that is not an insurance or reinsurance company, or a group of insurance/reinsurance companies as defined in Article 297(1)(3) of this Act, or by a non-financial entity, with the aim of providing reinsurance coverage solely for the risks of the owning entity or its group
3. "insurance company from another Member State" means a legal entity with its registered office in another Member State that holds a permit from the competent supervisory authority for insurance business
4. "insurance company from a third country" means a legal entity with its registered office outside the Republic of Croatia or another Member State that holds an Agency permit to conduct insurance business in the Republic of Croatia through a branch
5. "insurance company from the Swiss Confederation" means a legal entity with its registered office in Switzerland that holds an Agency permit to conduct insurance business in the Republic of Croatia through a branch
6. "reinsurance undertaking" means a legal entity with its registered office in the Republic of Croatia that holds an Agency permit for reinsurance business and is registered in the court register of the competent commercial court
7. "reinsurance undertaking from another Member State" means a legal entity with its registered office in another Member State that holds a permit from the competent supervisory authority for reinsurance business
8. "reinsurance undertaking from a third country" means a legal entity with its registered office outside the Republic of Croatia or another Member State that holds a permit from the competent supervisory authority for reinsurance business
9. "reinsurance undertaking from the Swiss Confederation" means a legal entity with its registered office in Switzerland that holds a permit from the competent supervisory authority for reinsurance business
10. "mutual insurance society" means a legal entity with its registered office in the Republic of Croatia that holds an Agency permit for insurance business and is registered in the court register of the competent commercial court
11. "reinsurance" means:

• business consisting of accepting risks ceded by an insurance company, insurance company from another Member State, insurance company from the Swiss Confederation or insurance company from a third country, or by another reinsurance undertaking, reinsurance undertaking from another Member State, reinsurance undertaking from the Swiss Confederation or reinsurance undertaking from a third country; or
• in the case of an insurance association and underwriting societies known as Lloyd's, business consisting of accepting risks ceded by any member of the Lloyd's association, an insurance company or a reinsurance undertaking that is not a Lloyd's association;
• insurance provided by a reinsurance undertaking to an institution subject to regulations on occupational pension institutions.

12. "limited risk reinsurance" means reinsurance where the maximum possible loss, expressed as the maximum transferred economic risk arising from the transfer of significant insurance risk and time value of money, exceeds the premium during the contract term by a limited but significant amount, and has at least one of the following characteristics:

• explicitly and significantly takes into account the time value of money
• contractual provisions allow for economic result equalization between contracting parties over time to achieve the targeted risk transfer

13. "Member State" means a state that is a member of the European Union and a signatory to the Agreement on the European Economic Area
14. "third country" means a state that is not the Republic of Croatia or another Member State
15. "home Member State" means:

• for non-life insurance, the Member State where the registered office of the insurance company covering the risk is located
• for life insurance, the Member State where the registered office of the insurance company covering the obligation is located
• for reinsurance, the Member State where the registered office of the reinsurance undertaking is located

16. "host Member State" means a Member State that is not the home Member State, in which an insurance or reinsurance company has a branch or provides services
17. "Member State where services are provided" means the Member State of obligation, or the Member State where the risk is located, if that obligation or risk is covered by an insurance company or branch located in another Member State
18. "Member State where the risk is located" means:
    a) the Member State where the asset is located, when insurance relates to buildings or buildings and their contents, provided that the contents are covered by the same policy b) when insurance relates to any type of means of transport (vehicle, aircraft, boat or yacht), the Member State where the means of transport is registered c) when insurance relates to any type of travel or annual holiday risk for policies lasting four months or less, the Member State where the policyholder concluded the insurance contract d) in all other cases not explicitly stated in a), b) or c), the Member State where:

• the policyholder's residence or habitual abode is located, if the policyholder is a natural person; or
• the policyholder's registered office is located, if the policyholder is a legal entity.

19. "Member State where the obligation is assumed" means the Member State where:

• the policyholder's residence or habitual abode is located; or
• if the policyholder is a legal entity, the policyholder's registered office to which the contract relates.

20. "Agency" means the Croatian Financial Services Agency established under the Act on the Croatian Financial Services Agency, responsible and competent for implementing and supervising this Act and EU regulations under Article 2.
21. "competent supervisory authority" means an authority from another Member State, third country or the Swiss Confederation authorized by law or regulation to supervise insurance and reinsurance business, as well as insurance/reinsurance distribution.
22. "branch" means a legally dependent part of an insurance or reinsurance company located in the territory of a Member State that is not its home Member State.
23. "establishment" of an insurance or reinsurance company means its registered office or any of its branches.
24. "parent undertaking" is an entity that, in relation to a subsidiary, meets one of the following conditions:

• holds the majority of voting rights in the subsidiary
• has the right to appoint or remove the majority of the management, supervisory board or executive directors of the subsidiary, while simultaneously being a shareholder or member in the subsidiary
• has the right to exercise dominant influence over the subsidiary based on a management contract, other agreement or arrangement
• holds a participating interest in the subsidiary and exercises dominant influence over it
• is a shareholder or member of the subsidiary based on an agreement with other shareholders or members, thereby controlling the majority of voting rights in that company
• holds a participating interest in the subsidiary and has concluded a management contract with another entity under which it manages the subsidiary's business; or
• in the opinion of the supervisory authority, exercises dominant influence over another company or manages it on a unified basis.

25. "subsidiary" means a legal entity over which the parent undertaking exercises dominant influence as described in point 24. All subsidiaries of subsidiaries are considered subsidiaries of the parent undertakings.
26. "close links" means a relationship where two or more natural or legal persons are connected by control or participation, or a position where two or more natural or legal persons are permanently linked to the same entity through a control relationship.
27. "control" means the relationship between a parent undertaking and a subsidiary as defined in points 24 and 25, or such or similar relationship between any natural or legal person and a company.
28. "intra-group transactions" are all transactions in which an insurance or reinsurance company directly or indirectly relies on another entity within the same group or any natural or legal person closely linked to the entities in that group, for fulfilling contractual or non-contractual obligations with or without payment.
29. "participation" means direct holding or holding through control of 20% or more of voting rights, or capital, of a company.
30. "qualified holding" means any indirect or direct share in a company representing 10% or more of the capital, or voting rights, or enabling significant influence over the management of that company.
    30.a "co-operator of a qualified holding acquirer in an insurance company" means:

• any natural person who is a member of the management or supervisory board in a legal entity where the intended acquirer of the qualified holding is a member of the management or supervisory board or actual owner;
• any natural person who is the actual owner of a legal entity where the intended acquirer of the qualified holding in an insurance company is a member of the management or supervisory board;
• any natural person who jointly with the intended acquirer of the qualified holding in an insurance company has joint actual ownership over a legal entity.
  30.b "co-operator of the person for whom the supervisory board has submitted a request to issue a permit to perform the function of a management member in an insurance company" means:
• any natural person who is a member of the management or supervisory board in a legal entity where the candidate for management member is a member of the management or supervisory board or actual owner;
• any natural person who is the actual owner of a legal entity where the candidate for management member in an insurance company is a member of the management or supervisory board;
• any natural person who jointly with the candidate for management member in an insurance company has joint actual ownership over a legal entity.
  30.c "actual owner of a legal entity" means the actual owner of a party in accordance with the law governing the prevention of money laundering and financing of terrorism.

31. "regulated market" means a market as regulated by the capital markets law, and in the case of a market located in a third country, a financial market meeting the following conditions:

• recognized by the home Member State of the insurance company and meets requirements comparable to those regulated by capital markets laws
• financial instruments traded on that market have quality comparable to instruments traded on regulated markets, or the home Member State's regulated markets.

32. "national insurance office" means a national office of insurers, a professional organization established in accordance with Recommendation No. 5 adopted on 25 January 1949 by the Road Transport Sub-Committee of the Inland Transport Committee of the United Nations Economic Commission for Europe, which brings together insurance companies authorized in one state to conduct motor vehicle civil liability insurance business; in the Republic of Croatia, the Croatian Insurance Office.
33. "national guarantee fund" means assets managed by the national insurance office; in the Republic of Croatia, the Guarantee Fund managed by the Croatian Insurance Office.
34. "financial entity" means any of the following subjects:
    a) credit institution, financial institution or ancillary services company as defined by the law governing credit institutions b) insurance or reinsurance company or insurance holding company as defined by this Act c) investment firm or financial institution as defined by the capital markets law d) mixed financial holding means a mixed financial holding in accordance with the law governing...