Regulation on Conditions for Management and Supervisory Board Members of a Pension Insurance Company – Unofficial Consolidated Text (NN 121/19, 121/24 and 153/25)

Croatian Financial Services Supervisory Agency, 10000 Zagreb, Franje Račkoga 6, P.O. Box 164, Croatia t: 01 6173 200, f: 01 4811 507, e: info@hanfa.hr, OIB: 49376181407, MB: 02016419, w: www.hanfa.hr PRAVILNIK ON CONDITIONS FOR THE PERFORMANCE OF THE FUNCTION OF A MANAGEMENT BOARD MEMBER AND A SUPERVISORY BOARD MEMBER OF A PENSION INSURANCE COMPANY (Official Gazette Nos. 121/19, 121/24 and 153/25 – unofficial consolidated text) Introductory Provisions
Article 1.
(1) By this Regulation, the Croatian Financial Services Supervisory Agency (hereinafter: HANFA) specifies in detail:
1. the conditions under Article 38 of the Act on Pension Insurance Companies (hereinafter: the Act) for
performing the function of a management board member of a pension insurance company (hereinafter: the Company), or for issuing approval for performing the function of a management board member of the Company, as well as the documentation submitted with the application for issuing approval for performing the function of a management board member of the Company,
2. the content of the application under Article 41(2) of the Act and the documentation proving compliance
with the conditions under Article 38 of the Act, the content of the Company’s business management program, and the criteria for assessing the program and candidates for a management board member who presents the program,
3. the conditions under Article 45 of the Act for performing the function of a supervisory board member of the Company, or
for issuing approval for performing the function of a supervisory board member of the Company, the content of the application under
Article 45a of the Act, and the documentation submitted with the application for issuing approval for performing
the function of a supervisory board member of the Company,
4. justified grounds on which HANFA may issue approval for performing the function of a management board member
of the Company for a period shorter than that specified in the application.
(2) The terms used in this Regulation have the same meaning as in the Act.
Conditions for Performing the Function of a Management Board Member
Article 2.
(1) A management board member of the Company may be a person who meets the conditions prescribed by Article 38, Article 39 and Article 41(1) of the Act and this Regulation.
(2) A candidate for a management board member of the Company must, among other prescribed conditions, meet the requirement of professional competence, i.e., have appropriate professional qualifications, knowledge and experience necessary for managing the Company, and meet the requirement of fitness, i.e., have a good reputation and integrity. Professional Competence
Article 3.
(1) A candidate for a management board member is considered professionally competent, i.e., possesses appropriate professional qualifications, knowledge and experience under Article 38(1) point 1 and (4) of the same Act for appropriately managing and conducting the Company’s business with the care of a competent professional, if they have:
1. completed an appropriate level of education:
a) pre-graduate and graduate university studies, or b) integrated pre-graduate and graduate university studies, or c) professional study and specialist graduate professional study, having acquired at least 300 ECTS credits upon completion, or d) university undergraduate study, having acquired a high level of professional qualification upon completion, or e) professional undergraduate study, lasting at least four years, having acquired a high level of professional qualification upon completion,
2. appropriate experience which implies:
a) at least three years of experience in managerial positions in the Company, a pension company, an investment fund management company, an insurance company or a reinsurance company, or b) five years of experience in managing business activities comparable to those of the Company or activities for which HANFA considers that, by performing such activities, the person could have acquired experience for performing the function of a management board member of the Company. (2) The provision under paragraph (1) point 1 subpoint b of this Article applies to persons who completed their studies under the regulations in force prior to the entry into force of the law governing scientific activities and higher education, and have the right to use an appropriate academic or professional title or academic degree established by the law governing academic and professional titles and degrees. (3) In assessing the duration of experience, HANFA may take into account several short-term or temporary positions if it establishes that, together with other previous activities performed by the candidate, they have acquired at least three or five years of experience in the activities under paragraph (1) point 2 of this Article. (4) In addition to the condition prescribed in paragraph (1) of this Article, the person must have passed an exam to verify knowledge and acquire qualifications for managing the Company or another professional exam in the field of investment management that HANFA considers acceptable. Fitness and Properness
Article 4.
(1) A good reputation and integrity prescribed by Article 38(1) points 2 to 10 of the Act is possessed by a candidate in relation to whom there are no circumstances casting doubt on their good reputation and who:
1. has not been finally convicted of an offence or criminal act under Article 24(1) point 7 of the Act
2. is not a collaborator of a person finally convicted of a criminal act under Article 24(1) point 7 of the Act
3. is not in a conflict of interest with regard to the Company, shareholders, supervisory board members, holders
of key functions and senior management of the Company.
(2) When assessing reputation and integrity under Article 38(1) point 2, HANFA will particularly take into account the following circumstances that may cast doubt on a candidate’s good reputation:
1. if the candidate was a supervisory board member, management board member or person in another managerial
position in the Company, or a commercial company, when insolvency proceedings or pre-insolvency proceedings were opened against them, a decision on compulsory liquidation was made, or their operating license was revoked, unless HANFA considers that the candidate did not influence the opening of insolvency, initiation of pre-insolvency proceedings, compulsory liquidation or revocation of the operating license through their dishonest or unprofessional work and conduct
2. if HANFA, the Croatian National Bank or a related supervisory authority from the Republic of Croatia, an EU Member State and third countries refused to issue approval for performing the function of a management board member, or
less than one year has passed since the date of finality of the decision refusing the application for issuing approval for performing the function of a management board member
3. if, based on the candidate’s past behavior, it is not possible to reasonably conclude that they will
honestly and diligently perform the functions of a management board member of the Company
4. if proceedings have been initiated against the candidate, or criminal or misdemeanor proceedings are being conducted for
criminal acts or misdemeanors under Article 24(1) point 7 of the Act
5. Deleted.
6. if a measure has been imposed on the candidate or competent courts or authorities are conducting proceedings due to irregularities
or non-compliance with any regulations governing banking, financial or insurance activities. the capital market, provision of financial services, investment and pension funds, in particular regulations governing the prevention of money laundering and terrorist financing, corruption, abuse of the capital market, insider dealing, usury or any other regulations governing the operation of financial institutions,
7. Deleted.
8. if business results in past work and/or financial stability endanger the candidate’s reputation,
9. if there are other reasons for doubting the candidate’s good reputation.
(3) Establishing the existence of circumstances under paragraph (2) of this Article does not affect the application of the presumption of innocence principle from regulations governing criminal proceedings.
(4) When determining whether circumstances under paragraph (2) points 4 and 5 of this Article affect a candidate’s good reputation and integrity, HANFA takes into account all available data related to the type of criminal sanctions, the stage at which the proceedings are located, legal remedies lodged, imposed penalty or other criminal sanction, effects of rehabilitative measures, existing aggravating and mitigating circumstances, significance of the criminal act or misdemeanor, period elapsed since the commission of the act and the person’s behavior during that time. HANFA will also take into account a larger number of minor acts which individually do not impair, but together may impair the good reputation and integrity of the person. (5) When determining whether circumstances under paragraph (2) point 3 of this Article affect a candidate’s good reputation and integrity, HANFA will analyze data indicating the person’s uncorrect behavior in past professional work, such as non-transparent conduct, for example, irregular or incomplete reporting to competent authorities about material information, lack of cooperation with competent authorities and, if available, will also analyze the reasons for termination of employment contracts, as well as the reasons for dismissals from key or similar functions and prohibitions on conducting business or representing legal entities imposed by the competent authority or non-compliance with measures imposed by HANFA or other competent authorities. (6) When determining circumstances under paragraph (2) points 6 and 7 of this Article, HANFA will take into account the person’s financial stability and its possible impact on good reputation and integrity. In doing so, it will analyze:
1. whether the candidate’s assets call into question the fulfillment of their financial obligations in the future,
2. whether the candidate is on the list of irregular debtors (e.g., HROK, tax debtor list of the Ministry of Finance,
credit registries, etc.),
3. whether no insolvency proceedings have been opened, are being conducted, or have been completed regarding the candidate’s assets as an individual debtor (sole trader or craftsman), and whether no pre-insolvency proceedings have been initiated and are being conducted, except
if HANFA considers that the person did not influence the opening of insolvency or initiation of pre-insolvency proceedings through their dishonest or unprofessional work and conduct,
4. whether the candidate has been finally convicted and whether criminal or misdemeanor proceedings are being conducted against the candidate for any of the criminal or misdemeanor acts not listed in paragraph (1) of this Article,
5. investments representing a material share in the candidate’s assets, exposure and indebtedness of
the candidate.
Application for Issuing Approval for Performing the Function of a Management Board Member
Article 5. (NN 153/25)
(1) The application for issuing a decision on approval for performing the function of a management board member of the Company is submitted to HANFA by the Company’s supervisory board, on the form in Annex 1 of this Regulation, in writing or electronically, for a term that may not exceed five years. (2) The application under paragraph (1) of this Article must contain:
– key reasons that influenced the submission of the application and objectives to be achieved by appointing the candidate to the management board of the Company, – function and competencies for which the candidate intends to be appointed, as well as an explanation of the decision on selecting the candidate which contains criteria and procedures by which the Company guided itself during the assessment of the candidate’s fitness, (3) Along with the application form (Annex 1.), the following attachments are submitted, where applicable:
1. decision on appointing the selected candidate as a management board member conditional upon obtaining HANFA’s approval, or decision on selecting the candidate as a management board member,
2. results of the fitness assessment conducted by the Company with an explanation and data on persons who conducted the professional competence and fitness assessment,
3. copy of personal ID or passport, or for a foreign national, a certified copy of personal ID or travel document issued in accordance with the provisions of the law governing the status of foreigners,
4. certified copy of proof of completed prescribed level of education, and in the case of a foreign qualification (diploma), a document on recognition of foreign higher education qualification for employment or continuation of studies issued by the competent authority in the Republic of Croatia,
5. proof of passing a professional exam in the field of investment management, if no exam for verifying knowledge and acquiring qualifications for managing the Company has been passed,
6. appropriate document proving their working experience,
7. employer certificates on relevant work experience for a candidate who does not hold the function of management board member at the time of submitting the application (company name, period of work, description of duties and functions, title/position, number of subordinate employees),
8. in initial appointments within that Company, data on the recommendation given by the direct superior, or for management board members, a supervisory board member or company member, at the employer where the candidate worked in the last three years if available, or, if not available, an explanation of reasons for unavailability,
9. list of the candidate’s collaborators within the meaning of Article 3 point 35 of the Act containing data on the first and last name, OIB (tax identification number), maiden name, gender, nationality, father’s and mother’s names, date of birth, place and country of birth, address of residence and copy of the collaborator’s personal ID or passport, as well as proof for each foreign national collaborator that they have not been finally convicted of criminal acts under Article 24(1) point 7 of the Act,
10. statement by the Company on the existence of circumstances that may lead to a conflict of interest and measures taken
to reduce or eliminate it,
11. completed Questionnaire in Annex 2 of this Regulation, with the candidate’s signature for a management board member of the Company
certified by a notary public, not older than one month from the date of submitting the application for issuing approval for performing the function of a management board member,
12. Candidate’s Statement in Annex 3 of this Regulation, with the candidate’s signature for a management board member of the Company
certified by a notary public, not older than one month from the date of submitting the application for issuing approval for performing the function of a management board member,
13. business management program of the Company’s candidate for the term period,
14. certificate that no criminal or misdemeanor proceedings are being conducted against the candidate, not older than 3 months, where applicable,
15. proof of payment of the fee payable with the application for issuing approval for performing the function of a management board member of the Company prescribed by HANFA’s act on the type and amount of fees,
16. other documentation proving compliance with the conditions under the Act and this Regulation.
(4) Copies of documents and statements from this Article are submitted certified by a notary public, foreign documents and statements from this Article are submitted translated into Croatian by an authorized court interpreter, and foreign documents are also authenticated in accordance with the law governing legalisation of documents in international traffic and international regulations (Apostille – Hague Convention on abolishing the requirement of legalisation for foreign public documents, dated 5 October 1961) or in accordance with EU regulations governing exemption from legalisation of public documents issued by Member States or simplifying the procedure for accepting documents issued by Member States. Submitted documentation is not returned. (5) When the same person is a candidate for a management board member of the Company again, the application does not need to include documents listed under points 4., 5. and 7. of paragraph (3) of this Article. (6) In addition to the documents under paragraph (1) of this Article, other documents may be attached to the application which can confirm the candidate’s professional competence and fitness. (7) HANFA may request additional documents, data and information from the applicant to prove that the candidate meets the conditions prescribed by the Act and this Regulation for performing the function of a management board member of the Company. Content of the Company’s Business Management Program
Article 6. (NN 153/25)
(1) The Company’s business management program for the term period (prescribed by Article 41(6) of the Act) is submitted to HANFA in both written and electronic form in accordance with technical instructions which HANFA will publish on its website, and must contain:
a) a brief description of the situation in the Company and the Company’s organizational chart with the number of employees by organizational units (to the extent that relevant data are available to the candidate), b) description of the environment in which the Company operates and its position relative to the entire sector in which it operates, as well as in relation to competitors (it is desirable to mention identified advantages, but also identified weaknesses in comparison with comparable groups), c) detailed description of planned activities during the term period (preferably mentioning planned implementation dynamics), including planned significant changes relative to the existing situation, d) projections of financial statements (statement of financial position and statement of comprehensive income) of the Company and reports on capital adequacy (calculation of capital amount, guaranteed capital and solvency margins) for the term period, which must be prepared on prescribed forms in accordance with the regulation governing the structure and content of the Company’s financial statements and the regulation governing capital adequacy of the Company, and submitted with the program in both written and electronic form in accordance with technical instructions which HANFA will publish on its website, e) description of assumptions and facts taken into account when preparing the program, f) detailed description of activities that will support planned activities, all with the aim of quality identification, measurement, monitoring and management of all risks that may arise from undertaken activities, description of the risk management system (strategies, policies, procedures, risk management measures, risk measurement techniques and division of responsibilities regarding risk management), as well as description of activities that will improve the existing situation in the Company, g) description of risks to which the Company is exposed and may be exposed through implementation of planned activities, with a description of methods for identifying, measuring, monitoring and managing risks. h) description of the anticipated policy on preventing conflicts of interest, i) plan for anticipated procedures in case of Company insolvency, j) description of anticipated procedures when making decisions, and delimitation of powers among members of the management board of the Company with highlighted changes relative to the existing situation, k) description of the anticipated system of internal audit, actuarial function, and systems for internal controls and compliance monitoring of the Company’s conduct with statutory and subordinate regulations, l) review of supervisory measures that HANFA may have ordered and the Company’s compliance with them, m) description of the plan for outsourcing business activities to third parties, if such a plan exists, n) when the term period follows a previous term period in the same Company or the break between two terms is shorter
than 6 months, it is necessary to describe which plans from the previous candidate’s program have been achieved and which have not, and why, o) in conclusion, a summary of all the above under previous points. (2) When preparing the program under paragraph (1) of this Article, a candidate for a management board member of the Company is obliged to particularly elaborate in detail those points of the business management program that are material for the implementation and effects of planned activities within their future scope of work and responsibilities. (3) The Company’s business management program in written form must have a date and be hand-signed by the candidate for a management board member and the president or vice-president of the supervisory board of the Company whose candidate for a management board member it is. Projections of statements under paragraph (1) point d) of this Article must be signed by the candidate for a management board member and the president or vice-president of the supervisory board of the Company. Procedure and Criteria for Assessing Candidates for a Management Board Member
Article 7.
(1) HANFA will determine whether the candidate meets the statutory conditions for performing the function of a management board member prescribed by Article 38 of the Act and the conditions prescribed by this Regulation, and when assessing the candidate’s capability for performing the function of a management board member, it will particularly assess the candidate’s knowledge necessary for managing the Company and specific competencies, their business reputation and experience, clarity of visions and ideas, motivation and manner of achieving set goals, knowledge and assessment of risks and management thereof, decision-making, ability to organize business operations and manage the Company, and the candidate’s readiness for continuous learning and professional development. (2) When HANFA, in the procedure of deciding on issuing approval for performing the function of a management board member of the Company, requests that the candidate present the Company’s business management program, it will invite the candidate to a presentation of the program and will instruct the applicant that they may also participate in the candidate’s presentation of the program (3) HANFA assesses the Company’s business management program taking into account whether a clear vision and strategy for achieving set goals is established in the program, knowledge of the industry and overall economic context, errors in the program indicating lack of knowledge of the subject matter of the Company’s business and regulations governing the Company’s operations, and realism of assumptions on which the Program was prepared or adequacy of the proposed plan and planned activities during the term period, as well as:
– realism of program assumptions,
– set goals and strategies for achieving goals, – planned activities during the term period and – alignment of planned activities with set goals, regulations and best practices.
(4) HANFA will also take into account when assessing the capability and professional competence of a candidate who presents the business management program:
– knowledge and quality of presenting the program, – knowledge of regulations applicable to the Company’s operations, – knowledge of risks and methods of managing risks to which the Company is exposed, – knowledge of the vision, strategy and goals as well as business processes of the Company, – knowledge of the internal audit system, systems for internal controls of the Company’s operations and actuarial function. (5) HANFA may issue approval for performing the function of a management board member of the Company for a term shorter than requested in the case:
1. when the candidate applies for a management board member position for the first time, and during the presentation of the program did not sufficiently demonstrate how they possess professional knowledge of the Company’s business processes, but it is estimated that they will acquire it through experience in the near future,
2. when the candidate applies for a new term period in the same Company, and during the previous term supervisory measures were imposed on the Company which the Company has not fully complied with and deadlines for eliminating them have not yet expired, and compliance with past measures indicates a need for intensified monitoring of the Company,
3. when the candidate applies for a new term period in the same Company, and the Company repeatedly has difficulties maintaining capital adequacy,
4. if findings and information from supervisory procedures conducted by HANFA or another supervisory authority
indicate irregularities or inconsistencies affecting the stability and functioning of the Company, relating to the Company’s management structures, fulfillment of organizational requirements or establishment of control functions, for which intensified monitoring of the Company in fulfilling regulatory requirements is necessary,
5. if data available to HANFA indicate irregularity and inconsistency in fulfilling reporting obligations to HANFA by the Company,
6. when the candidate applies for a new term period in the same Company, and key points of the business management program for the previous term were not achieved for the previous term period, and objective reasons for their non-achievement are not presented,
7. if proceedings on issuing approval or consent under other statutory bases are pending in relation to the candidate or Company, which may influence the decision on the duration of the term,
8. if there are other circumstances in relation to the candidate or Company that may influence the decision on issuing approval for a term shorter than requested.
Article 8.
The provisions of this Regulation relating to a management board member of the Company apply mutatis mutandis to executive directors of the Company that has a management board and executive directors.
CONDITIONS FOR PERFORMING THE FUNCTION OF A SUPERVISORY BOARD MEMBER
Article 9.
Professional Competence and Fitness of a Supervisory Board Member of the Company The conditions under Article 45 of the Act apply mutatis mutandis to supervisory board members of the Company, along with the provisions of Article 3(1) point 1 and Article 4 of this Regulation. Application for the issuance of approval for performing the function