Instructions for Insurance Companies Intending to Conduct Insurance Business in Another Member State on the Basis of Freedom of Establishment – FOE

INSTRUCTIONS FOR INSURANCE COMPANIES INTENDING TO CONDUCT INSURANCE BUSINESS IN ANOTHER MEMBER STATE ON THE BASIS OF FREEDOM OF ESTABLISHMENT – FOE

An insurance company may conduct its authorized insurance or reinsurance business in another Member State:

• on the basis of freedom of establishment, or
• in accordance with the freedom to provide services,
  if it meets the conditions set by the laws of the service-providing Member State or the Member State where obligations are assumed.

An insurance company intending to conduct insurance business in another Member State on the basis of freedom of establishment must beforehand:

• notify Hanfa in writing pursuant to Article 62(1) of the Insurance Act (Official Gazette Nos. 30/2015, 112/2018, 63/2020, 133/2020) using the form published on its website,
• submit the insurance company's business plan specifying at least the types of planned business and the branch's organizational structure,
• submit proof of payment of the notification fee to the competent supervisory authority of the Member State and the Croatian insurance/reinsurance company operating through a branch in that Member State, pursuant to Article 12(15) and (16) of the Regulation on the Type and Amount of Fees of the Croatian Financial Services Supervisory Agency (Official Gazette No. 26/2019), in the amount of HRK 6,500.00 or HRK 2,000.00 depending on whether it is an initial notification or business extension.

Instructions for completing the form:

1. The form must be completed exclusively in English.
2. The form must indicate whether it is an initial notification or a modification of the notification.
3. For business extension, the form must indicate a modification of notification and under point 4 select only the new insurance types the company intends to cover in the host Member State.
4. Under point 1, provide the name and address (street, postal code, city, country) of the insurance company's registered office. If available, also provide the electronic mail address of the registered office. If not available, enter N/A (non applicable).
5. Under point 2, state the name of the country where the insurance company intends to conduct business on the basis of freedom of establishment.
6. Under point 3, provide the address (street, postal code, city, country) of the branch in the host Member State from which documents, including all communications with the authorized representative, can be obtained or sent.
7. Under point 4, indicate the insurance types according to Annexes I and II of the Solvency II Directive covering the company's planned business.
8. Under point 5, provide the full name and, if available, electronic mail address of the person with sufficient authority to bind the insurance company or, in the case of Lloyd's syndicate, the relevant insurers towards third parties and to represent them before the authorities and courts of the host Member State (authorized representative), along with a description of that person's powers.
9. Under point 6, if the company intends to cover risks under insurance type 10 in Part A of Annex I of Solvency II Directive (excluding carrier's liability), it must declare that the company has become a member of the host Member State's national office and national guarantee fund. If not covering type 10 risks, enter N/A (non applicable) in these fields.
10. Under point 7, if the company intends to cover legal costs insurance risks, select the applicable option described in Article 200 of Solvency II Directive. If not, enter N/A (non applicable).
11. Under point 8, provide the Legal Entity Identifier (LEI) of the notifying company (or, if unavailable, the local market identification code assigned by Hanfa1).
12. Under point 9, provide the identification of persons effectively managing or responsible for key branch functions2, if available – full name, home/registered address in the host Member State, and electronic mail address. Also attach a copy of that person's ID/passport or appointment decision to the form.
13. Under point 10, if the company belongs to a cross-border group, state the name of the group supervisory authority and the group structure as set out in the coordination agreement annex, along with the latest reported group solvency status. If not applicable, enter N/A (non applicable).
14. Under point 11, provide all available information regarding planned distribution channels, relevant outsourcing agreements, and partners to be used in the host Member State.
15. Under point 12, provide the results of the company's compliance assessment regarding product oversight and governance requirements, if available: e.g., material findings related to product design, distributor monitoring, target market identification, and product testing. If not available, enter N/A (non applicable).
16. Under point 13, describe the relevant guarantee funds for policyholders in the home Member State, where applicable. If not applicable, enter N/A (non applicable).
17. Under point 14, provide the full name, phone number, and electronic mail address of the contact person for Hanfa regarding the notification.
18. The completed form, together with proof of fee payment and other documentation, may be submitted electronically to Passport.Insurance@hanfa.hr, by post, or in person at Hanfa's Registry on working days from 9 a.m. to 2 p.m.

The insurance company's business plan must contain at least:

1. the nature of risks or obligations the company intends to cover through the branch,
2. if available, the guiding principles regarding reinsurance and retrocession concerning branch operations,
3. if available, cost estimates for administrative services and organization to insure branch business, financial resources allocated for this purpose, and, if the risks to be covered are type 18 in Part A of Annex I of Solvency II Directive, the company providing assistance services or resources available to the insurance company for delivering promised assistance,
4. the organizational structure of the branch,
5. if available, for the first three financial years of the branch:
   • management cost estimates excluding start-up costs, specifically general expenses and commissions,
   • estimates of premiums or contributions and claims.

The business plan must be submitted in both Croatian and English.

Note:
Pursuant to Article 62(7) of the Insurance Act, if any data submitted in the form changes, the insurance company must notify Hanfa and the competent supervisory authority of the host Member State in writing at least one month before the intended implementation date, allowing those authorities to fulfill mutual reporting obligations. If the change relates to business extension, it is permitted only after one month has elapsed since the insurance company notified Hanfa. In this case, the insurance company must complete the form according to the above instructions, indicate that it is a modification of notification, and submit the form to Hanfa.

Fee payment instructions:
Initial notification
Amount: HRK 6,500.00
Model: 67
Reference number: OIB-118-013
IBAN for payment: HR91 2390 0011 1003 29373.
Purpose of payment: Initial notification FOE – Party name

Business extension
Amount: HRK 2,000.00
Model: 67
Reference number: OIB-118-047
IBAN for payment: HR91 2390 0011 1003 29373.
Purpose of payment: Business extension FOE – Party name

Note:
For notifications regarding changes to form data (except business extension), the company is not required to pay Hanfa any fee.
If an insurance company intends to conduct insurance distribution on the basis of freedom of establishment in multiple Member States, it may list several Member States in point 2 of the form during initial notification. In such case, the insurance company must pay a single fee for the initial notification.

1 Registration number assigned by Hanfa.
2 Persons responsible for branch activities within the company (home Member State).