Guidelines for Insurance and Reinsurance Companies to Strengthen the Financial Literacy of Croatian Citizens

REPUBLIKA HRVATSKA
HRVATSKA AGENCIJA ZA NADZOR FINANCIJSKIH USLUGA Hrvatska agencija za nadzor financijskih usluga, 10000 Zagreb, Franje Račkoga 6, p.p. 164, Hrvatska t: 01 6173 200, f: 01 4811 507, e: info@hanfa.hr, OIB: 49376181407, MB: 02016419, w: www.hanfa.hr

GUIDELINES for insurance and reinsurance companies to strengthen the financial literacy of citizens of the Republic of Croatia

Namjera, cilj i opseg (Purpose, Objective and Scope) Hrvatska agencija za nadzor financijskih usluga (HANFA), pursuant to Article 15(4) of the Act on Hrvatska agencija za nadzor financijskih usluga (Official Gazette nos. 140/05, 121/12), Article 204(10) and Article 55(8) of the Insurance Act (Official Gazette nos. 30/15, 112/18, 63/20, 133/20, 151/22, 152/24), at the meeting of its Management Board held on September 26, 2025, adopts the GUIDELINES for insurance and reinsurance companies to strengthen the financial literacy of citizens of the Republic of Croatia (hereinafter: Guidelines).

With the intention of clarifying Article 55(8) of the Insurance Act, harmonizing practices, and improving the operations of insurance and reinsurance companies (hereinafter: companies), as well as enhancing the awareness of existing and future policyholders, insured persons, or insurance beneficiaries, HANFA adopts these Guidelines.

The objective of the Guidelines is to improve, develop, and harmonize existing procedures and business practices of companies regarding informing and financially educating existing and future policyholders, insured persons, insurance beneficiaries, and the wider public, in connection with insurance products and the insurance industry. Furthermore, the Guidelines aim to ensure greater public presence and recognizability of companies and terms related to their operations and products, which is essential for effectively strengthening financial literacy. Given that the wider public largely perceives companies as insufficiently open financial institutions and insurance-related terms are not sufficiently known, companies should strive through their financial literacy strengthening activities for greater public recognizability, improved visibility, and clear, comprehensive communication of their operations. Therefore, companies should not view their financial literacy strengthening activities merely as fulfilling a legal formality but rather as contributing to better visibility and recognition of their work, strengthening the trust of existing and future policyholders, insured persons, or insurance beneficiaries in the insurance industry, which ultimately contributes to its long-term sustainability.

The Guidelines cover the following areas:
. separation of activities aimed at strengthening financial literacy from promotional activities . strategy for implementing activities aimed at strengthening financial literacy . content scope of activities aimed at strengthening financial literacy . segmentation of activities aimed at strengthening financial literacy according to identified target groups . outsourcing of services for implementing activities aimed at strengthening financial literacy . financing the implementation of activities aimed at strengthening financial literacy . reporting on the implementation of activities aimed at strengthening financial literacy

Sadržaj Smjernica (Content of the Guidelines)
Article 55(8) of the Insurance Act stipulates that members of the management board of an insurance company must ensure that the insurance company allocates a portion of its revenue each year for activities supporting the strengthening of financial literacy of citizens of the Republic of Croatia and reports this to HANFA by the end of January for the preceding year.

These Guidelines indicate possible standards, desirable practices, and principles that companies should apply when fulfilling the aforementioned legal obligation to improve, develop, and harmonize existing procedures and business practices of companies related to informing and financially educating the public.

1. Razdvajanje aktivnosti usmjerenih osnaživanju financijske pismenosti od promidžbenih i informativnih aktivnosti (Separation of activities aimed at strengthening financial literacy from promotional and informational activities)
   The Insurance Act contains provisions on advertising and promotion, so companies are expected to separate their financial literacy strengthening activities from promotional efforts, which implies separating these business activities both formally and procedurally within the companies' organizations.

Strengthening financial literacy implies adhering to the principles of transparency, impartiality, comprehensiveness, and accuracy in information provision based on facts rather than specific value positions and the presentation of preferences for certain services or service providers. Consequently, during financial literacy strengthening activities, content containing marketing messages directed towards the use of a specific service or favoring a specific financial service must not be used.

In this regard, companies are expected to consider and present their promotional activities, as the implementation of legal obligations for publication, not as activities within the financial literacy strengthening process.

Furthermore, investments in strengthening financial literacy cannot be considered as investments in the development and maintenance of IT platforms and websites where existing and future policyholders, insured persons, or insurance beneficiaries are provided with access to data on available or contracted insurance products, or where calculators for informative calculations are available.

2. Strategija provođenja aktivnosti usmjerenih na osnaŽivanje financijske pismenosti (Strategy for implementing activities aimed at strengthening financial literacy)
   Companies are expected to consider when planning financial literacy strengthening activities that appropriate financial education is not a one-off or short-term process, but a long-term investment aimed at achieving positive results for the entire community. Therefore, companies are expected to develop their own financial education strategy and update it as necessary, taking into account all relevant factors (which may include amendments to relevant regulations, periodic results of financial literacy research, technology development, etc.).

HANFA recommends that the strategy be:
. adopted for a period of at least 3 years,
. approved at the management level of the company, . with the company's management appointing a person responsible for its implementation, . continuously available to all employees of the companies.

For successful strategy implementation, it should contain at least:
. analysis of the current situation,
. strategy objectives divided into main and specific ones, . target groups of existing and future policyholders, . activities with defined and measurable performance indicators, . activity schedule, . communication plan for activities, resources necessary for strategy implementation (financial, professional, and others), . evaluation.

It is advisable to conduct the strategy evaluation once a year (by December 1) for activities performed in the preceding year, and to modify the relevant part of the implementation strategy accordingly based on the evaluation. The management board should approve the evaluation results and strategy modifications.

Evaluation includes, but is not limited to: a) analysis of performed activities compared to planned ones and explanations of deviations from the plan, b) cost analysis for performed activities, c) percentage spent on strengthening financial literacy in the previous calendar year relative to the company's total revenue in that year, d) analysis of cooperation with other stakeholders (if applicable), e) analysis of public opinion and media publications, f) impact of undertaken activities on the company's operations (e.g., whether there is a correlation between performed activities and the number of new policyholders, whether activities influenced the number of inquiries about insurance products, the number of complaints and appeals, the understandability of industry-specific terms, etc.).

3. Sadržajni obuhvat aktivnosti usmjerenih osnaŽivanju financijske pismenosti (Content scope of activities aimed at strengthening financial literacy)
   Given that part of the responsibility for the efficiency and sustainability of the insurance industry lies with companies, they should view financial literacy strengthening activities in the context of fulfilling their socially beneficial role.

When planning educational activities for financial literacy strengthening, it is useful to pay attention to the importance of maintaining and improving wider public trust in the Croatian insurance industry, and that companies must act in accordance with the best interests of existing and future policyholders, insured persons, or insurance beneficiaries. Financial literacy strengthening procedures conducted by companies should primarily focus on general information about the characteristics of insurance financial services, without differentiating in any way between services provided by individual companies.

Consequently, some general topics that can be explained through educational activities conducted by companies during financial literacy strengthening include, but are not limited to:
. familiarizing the target population with the nature of company operations, risk management, and basic insurance-related terms (distinguishing risk from uncertainty, risk transfer, functions and characteristics of insurance, groups and types of insurance, types of risks, rights and obligations under insurance contracts, incentive and sanction systems (bonus/malus), self-insurance, waiting period, deductible (including types), and other relevant terms), . the right to choose a company with which an individual wishes to conclude an insurance contract, . explaining the advantages of insurance as a risk transfer method, . familiarizing the target population with the complaint, appeal, and petition procedures related to rights and obligations arising from insurance contracts, as well as the obligation regarding received complaints, appeals, and petitions, . explaining the claims settlement procedure in case of a loss event (timeframes for company action and procedures, possible legal instruments and proceedings in case of dissatisfaction with the claims decision).

Taking into account the specificities of financial services provided by companies and their connection to other segments of the financial market (e.g., capital markets), other related topics involving:
. explanation of the distinction between savings, investing, and insurance . importance of prudent investment . importance of understanding personal responsibility when concluding insurance contracts . need for general financial education

When defining company activities, various information sources (such as results of surveys and research from reliable and legitimate sources, publicly available data, relevant databases, inquiries, complaints and appeals, information available in the media) or internal resources (e.g., for research purposes to collect data and information relevant to defining activities) may be used.

4. Segmentacija aktivnosti usmjerenih na osnaŽivanje financijske pismenosti sukladno identificiranim ciljnim skupinama (Segmentation of activities aimed at strengthening financial literacy according to identified target groups)
   Existing and future policyholders, insured persons, and insurance beneficiaries come from different and heterogeneous groups according to their socio-economic characteristics and therefore have different interests, needs, but often also levels of prior information and pre-knowledge related to insurance. For the purpose of developing strategy and planning educational activities, it is advisable to segment existing as well as potential policyholders and insured persons according to their fundamental socio-economic characteristics, and plan adequate financial literacy activities for each identified group. Thus, it is realistic to expect that an activity aimed at the younger population should not be equated with activities directed at older age groups. The conducted stratification should align with recent socio-economic characteristics of the population in the Republic of Croatia. Importantly, activities conducted by companies in one calendar year for financial literacy purposes should not be entirely directed at a single target group, but should be balanced according to a combination of criteria representing the share of each group in the total population and the established level of financial literacy of specific population groups.

Regarding company operations and the financial services they provide, for strategy development and planning educational activities, it is advisable to segment activities for raising financial literacy levels primarily in relation to informed approach to concluding insurance contracts and exercising rights under insurance contracts.

Importantly, activities conducted by companies in one calendar year for financial literacy purposes should be balanced and not directed solely or exclusively at one business segment or specific types of insurance products.

Furthermore, when implementing financial literacy strengthening activities, appropriate geographical diversification should be considered for direct activities not conducted indirectly through any media channel.

Regarding geographical diversification, to achieve optimal effect of implemented activities, it is advisable to select appropriate communication channels depending on the target social group or business segment of companies. This may include, but is not limited to:
. social networks and Internet,
. advertising (e.g., print, social networks, Internet, radio, television, jumbo billboards, etc.)
. radio,
. television,
. print media,
. forums, conferences, panels, exhibitions, cooperation and direct meetings, and other forms of education with various associations, educational institutions, or trade unions, . public events in cooperation with other stakeholders such as educational institutions, associations, or local and regional (regional) self-governments across the entire Republic of Croatia, etc.

5. Eksternalizacija usluga provođenja aktivnosti usmjerenih na osnaŽivanje financijske pismenosti (Outsourcing of services for implementing activities aimed at strengthening financial literacy)
   Given the specific knowledge, skills, and experience required to implement certain educational activities, a company may, at a certain stage of preparation, implementation, or analysis of educational activities, use services of other professional stakeholders, i.e., natural or legal persons.

Companies are expected to pay special attention when selecting these stakeholders to the possibility of conflicts of interest and to take all measures to adequately manage or avoid them. An example of a potential conflict of interest relates to the case where an insurance company, for market research or operational assistance in implementing educational activities, uses services of natural or legal persons that are owners or otherwise connected to it. Besides potential conflicts of interest, special attention should be paid to other risks that may arise in the financial literacy strengthening process, such as reputational risk if services of persons or media with poor integrity and reputation are used.

HANFA cannot foresee all specific and individual examples of potential conflicts of interest that may arise during any stage of the financial literacy strengthening process. Companies are expected to effectively and consistently manage the aforementioned, as well as all other eventual risks during these activities, in the same manner as with their other relevant business processes.

There are no obstacles for companies to implement financial literacy strengthening activities through cooperation of two or more companies or via associations. Such an approach, considering certain common interests of these companies, may be understandable and expected, especially taking into account the possibility of lower costs for some activities and certain synergistic effects. Regardless of this form of cooperation in strengthening financial literacy, companies should primarily and predominantly conduct financial literacy strengthening activities independently. Such individualized approach may lead, among other things, to stronger recognizability of individual companies in the public sphere, contribute to dynamism and competitiveness in the market, and stimulate creativity in structuring and implementing activities while increasing their coverage and reach (population, geographical coverage, media channels used, etc.).

6. Financiranje provođenja aktivnosti usmjerenih na osnaŽivanje financijske pismenosti (Financing the implementation of activities aimed at strengthening financial literacy)
   Companies are expected to allocate an appropriate budget for strengthening financial literacy that aligns with their annual revenues and market share. The use of funds should be prudent and aimed at achieving optimal effect, all in accordance with the long-term strategy for implementing activities aimed at strengthening financial literacy.

7. Izvještavanje o provođenju aktivnosti usmjerenih na osnaŽivanje financijske pismenosti (Reporting on the implementation of activities aimed at strengthening financial literacy)
   Companies must report to HANFA each year by the end of January for the preceding year about activities they carried out in the previous calendar year with the aim of strengthening financial literacy. These reports include all information that companies consider relevant, and should contain at least the following:
   a) information on the financial literacy strengthening strategy, which implies all its elements recommended by these Guidelines, including its evaluation, b) detailed list of performed educational activities and related costs, which implies clear differentiation between data on activities performed independently and activities performed in cooperation with other stakeholders, including information on eventual cooperation with other insurance companies c) total amount invested by the company in strengthening financial literacy and what percentage it represents relative to the company's total revenue in the previous calendar year d) data on the number of participants or persons covered by financial literacy strengthening activities (if such coverage can be tracked) and data on the impact of undertaken activities on the specific company's operations (e.g., correlation between performed activities and number of new policyholders, impact of activities on the number of inquiries about insurance products, number of complaints and appeals, understanding of industry-specific terms).

HANFA will analyze the submitted reports and, if necessary, communicate feedback and observations to companies.

Companies are expected to use the form located in Appendix 1 of these Guidelines when recording and reporting to HANFA about implemented financial literacy activities.

Prijelazne i završne odredbe (Transitional and Final Provisions) Companies are obliged to take all necessary activities to align their operations with these Guidelines.

These Guidelines are published on the HANFA website and enter into force on the date of publication.

PREDSJEDNIK UPRAVNOG VIJEĆA (CHAIRMAN OF THE MANAGEMENT BOARD) dr.sc. Ante Žigman KLASA: 994-1 I 125-021 17 URBROJ: 326-01 -50-54-25-1 Zagreb, September 26, 2025.

Prilog 1. Obrazac izvještaja o provođenju aktivnosti usmjerenih na osnaŽivanje financijske pismenosti građana Republike Hrvatske (Appendix 1: Reporting Form for Implementing Activities Aimed at Strengthening Financial Literacy of Citizens of the Republic of Croatia) Responsible persons:
Date of form submission:
Amount spent (EUR, with VAT)
Achieved reach (number of individuals reached by the activity) Expected reach (number of individuals planned to be reached by the activity) Media (live, online platforms, print, radio, TV, other - please specify which media you used) Target audience (primary and secondary school students, students, retirees, other - please specify target audience) Partner (in case the activity was implemented in cooperation with another legal person/institution, specify which) Activity (please enter the name/description of the activity) Total funds allocated for financial education in the reporting year (EUR):
Total revenue in the reporting year (EUR):
Reporting year:
Company Name: