Regulation on Conditions for Performing Key Functions in a Pension Insurance Company

Croatian Financial Services Supervisory Agency, 10000 Zagreb, Franje Račkoga 6, p.p. 164, Croatia t: 01 6173 200, f: 01 4811 507, e: info@hanfa.hr, OIB: 49376181407, MB: 02016419, w: www.hanfa.hr

RULES ON THE CONDITIONS FOR PERFORMING KEY FUNCTIONS IN A PENSION INSURANCE COMPANY (Official Gazette Nos. 121/19, 121/24 and 153/25 – Unofficial Consolidated Text)

Introductory Provisions Article 1. By these Rules, the Croatian Financial Services Supervisory Agency (hereinafter: HANFA) specifies in detail the conditions that holders of key functions in a pension insurance company (hereinafter: the Company) must meet and the documentation by which compliance with these conditions is demonstrated.

Conditions for Performing a Key Function Article 2. (OG 121/24)

1. Holders of key functions prescribed by Article 49.a paragraph 1 of the Act on Pension Insurance Companies ("Official Gazette" Nos. 22/14, 29/18, 115/18 and 156/23, hereinafter: the Act) must, upon appointment to a key function and for the entire duration of performing that function, meet the conditions prescribed by Article 49.b of the Act and these Rules. (2) The Company is obliged to establish the existence of the conditions from Article 49.b of the Act before adopting a decision on the appointment of a holder of a key function, and in the event of the cessation of the existence of the aforementioned conditions, to dismiss the holder of the key function. (3) The holder of a key function must without delay inform the Company of the cessation of the existence of the conditions from Article 49.b of the Act.

Article 3. The holder of a key function meets the condition of knowledge of the Croatian language from Article 49.b paragraph 1 point 1 of the Act if they know the Croatian language in speech and writing for the unimpeded performance of that function.

Article 4. The holder of a key function meets the conditions from Article 49.b paragraph 1 point 2 of the Act necessary for the proper performance of entrusted tasks with the care of a good expert if they meet the conditions from the Act and have:

1. completed a pre-graduate and graduate university study or – integrated pre-graduate and graduate university studies or – a professional study and a specialist graduate professional study, by completing which they obtained at least 300 ECTS points or – a university undergraduate study by completing which they obtained a high professional qualification or – a professional undergraduate study of at least four years' duration by completing which they obtained a high professional qualification,
2. at least three years of experience in management or performing appropriate tasks from the activity of the Company or in another legal entity in appropriate tasks from the field of finance, banking, law, actuarial science, audit or risk management, including several short-term or temporary tasks for which it can be established that by performing such tasks they acquired that experience.

Article 5. (OG 121/24, 153/25) (1) Appropriateness or good reputation and integrity prescribed by Article 49.b paragraph 1 points 3 and 4 of the Act is possessed by a person in relation to whom there are no circumstances that cast doubt on good reputation and who has not been finally convicted of a criminal offense from Article 24 paragraph 1 point 7 of the Act nor is a collaborator of a person convicted of a criminal offense from Article 24 paragraph 1 point 7 of the Act. (2) When assessing appropriateness from Article 49.b paragraph 1 point 3 of the Act, the Company must in particular take into account the following circumstances that may cast doubt on the good reputation or integrity of the person:

1. whether that person has had appropriate consent or approval for performing tasks in accordance with regulations under the competence of HANFA or another competent body revoked or refused due to non-compliance with regulations,
2. whether an investigation has been initiated or criminal proceedings are being conducted against that person for criminal offenses from paragraph 1 of this Article,
3. whether a measure has been imposed on that person or whether competent courts or bodies are conducting proceedings against them for irregularities or non-compliance with any regulations governing banking, financial or insurance activities, the capital market, provision of financial services, investment and pension funds, and in particular regulations preventing money laundering, corruption, market abuse, usury, or any other relevant regulations,
4. whether that person has been finally convicted of an offense that constitutes a gross or permanent violation of regulations under the competence of HANFA, the Croatian National Bank or another competent body of the Republic of Croatia, a Member State or a third country,
5. whether that person manages or at the time of committing the criminal offense managed a company that has been finally convicted of one of the criminal offenses from this Article, against which measures have been imposed or proceedings and other actions from point 3 of this paragraph are being conducted,
6. whether there are data in the central database of administrative penalties of European supervisory authorities, including all permanent bans imposed for violation of requirements relating to work permits and requirements for consent to acquire a qualifying holding, and data on submitted legal remedies in connection with those measures and outcomes of those legal remedies,
7. the person's previous professional work and personal integrity,
8. whether business results and/or financial stability endanger the person's reputation, taking into account the financial and business results of the trading company in which the candidate had or has a significant share or was or is in a management function and
9. whether there are other reasons for doubt regarding the good reputation of that person. (3) Establishing the existence of circumstances from paragraph 1 of this Article does not call into question the application of the principle of presumption of innocence from regulations governing criminal procedure. (4) When determining whether circumstances from points 2 – 6 of paragraph 2 of this Article affect the good reputation or integrity of the person, the Company is obliged to take into account all available data related to the type of criminal sanctions, the stage at which the proceedings are, submitted legal remedies, imposed sentence or other criminal sanction, effects of rehabilitative measures, existing aggravating and mitigating circumstances, significance of the criminal offense or offense, period that has elapsed since the time of committing the act and the person's behavior during that time. The Company is obliged to take into account a larger number of lighter offenses that individually do not impair, but together may impair the good reputation or integrity of the person. (5) When determining circumstances from points 2 – 6 of paragraph 2 of this Article, the Company is obliged to take into account all data on all relevant previous measures, convictions and proceedings related to the person or company that the person manages or has managed, which were carried out or are being carried out by HANFA or another competent body. (6) When determining whether circumstances from point 7 of paragraph 2 of this Article affect the good reputation or integrity of the person, the Company is obliged to analyze data indicating improper behavior of the person in previous professional work, such as non-transparent conduct, non-cooperation with competent bodies, denial or revocation or confiscation of approval or license for performing management functions or performing professional occupations or activities, and, if available, will also analyze the reasons for termination of employment contracts, as well as reasons for dismissal from key or similar functions and bans on conducting business or representing a legal entity imposed by a competent body or non-compliance with measures imposed by HANFA or another competent body and all other information or evidence indicating that the actions of that person are not in line with high standards of professional behavior. (7) When determining circumstances from points 8 and 9 of paragraph 2 of this Article, the Company is obliged to take into account the financial and business results of the trading company in which that person has or has had a significant share and/or management function, and in particular in the trading company in which they have or have had a significant share and/or management function, before a pre-bankruptcy settlement was conducted over the company, bankruptcy proceedings were opened, a decision on forced liquidation was adopted or approval for work was confiscated or revoked, which could affect the reputation or integrity of the person. The Company is obliged to assess at the same time whether the conduct of that person influenced the occurrence of these events. (8) When determining circumstances from points 8 and 9 of paragraph 2 of this Article, the Company is obliged to take into account the financial stability of the person and the possible impact of financial stability on the reputation or integrity of the person. In doing so, it is obliged to analyze:
10. whether the person's assets call into question the fulfillment of their financial obligations in the future,
11. whether the person is on the list of irregular debtors (e.g. HROK, list of tax debtors of the Ministry of Finance, credit registries, etc.),
12. whether bankruptcy proceedings for consumers have been conducted or are being conducted over the person's assets,
13. whether the person has been finally convicted and whether criminal proceedings are being conducted against them for any of the criminal offenses not listed in paragraph 1 of this Article,
14. data on non-conviction for offenses and whether offense proceedings are being conducted against the person,
15. large investments, exposure and indebtedness of the candidate.

9. A person who holds the function of a member of the board of directors or procurist and a member of the supervisory board of the Company, or who indirectly or directly has a share in the Company greater than 1 per mille, cannot be appointed to a key function.

Documentation by Which Compliance with Conditions for Performing a Key Function is Demonstrated Article 6. (OG 121/24) (1) The Company is obliged to assess the conditions prescribed by Article 49.b paragraph 1 of the Act on the basis of credible documentation. (2) For the purpose of verifying compliance with conditions prescribed by Article 49.b paragraph 1 of the Act and these Rules, the Company is authorized to collect the following documentation from the person it considers for appointment as a holder of a key function:

1. a certified copy of proof of completed prescribed level of education of the candidate, and in the case of a foreign qualification (diploma) a copy of the document on recognition of foreign higher education qualification for the purpose of employment or continuation of education issued by the competent body in the Republic of Croatia, when applicable,
2. appropriate certificates from which the candidate's work experience is visible,
3. a copy of HANFA's authorization for performing tasks of an authorized actuary or on the basis of proof of compliance with conditions from Article 55 of the Act, when adopting a decision on the appointment of a holder of the actuarial function, as well as proof of compliance with conditions from Article 54 of the Act, when adopting a decision on the appointment of a holder of the actuarial function,
4. a copy of authorization for auditor or authorized internal auditor acquired in accordance with the law governing audit, or acquired in accordance with rules and programs of the competent professional organization for professional education of internal auditors, when adopting a decision on the appointment of a holder of the internal audit function,
5. certificates from the competent body that the person has not been finally convicted of criminal offenses from Article 24 paragraph 1 point 7 of the Act, when applicable or a certified statement of the person that they have not committed a criminal offense or offense or that no criminal or offense proceedings are being conducted against them,
6. certificates from the competent body that no bankruptcy proceedings for consumers have been opened over the person's assets,
7. written statements of the candidate regarding whether and in what way they meet the conditions from Article 5 of these Rules and Article 49.b paragraph 1 point 5 of the Act. (3) The Company may request other information and/or documentation to verify compliance with conditions prescribed by the Act and these Rules. (4) The Company is obliged to document in writing the assessment of appropriateness of the holder of a key function, with a note of the documentation on the basis of which the assessment was made.

Entry into Force Article 7. (1) These Rules enter into force on the eighth day from the date of publication in the "Official Gazette". (2) The pension insurance company is obliged to comply with the provisions of these Rules within 6 months from entry into force.

FINAL PROVISIONS Rules on Amendments and Supplements to the Rules on Conditions for Performing Key Functions in a Pension Insurance Company (Official Gazette, No. 121/24), entered into force on October 27, 2024. Article 4. These Rules enter into force on the eighth day from the date of publication in the "Official Gazette".

FINAL PROVISIONS Rules on Amendment to the Rules on Conditions for Performing Key Functions in a Pension Insurance Company (Official Gazette, No. 153/25), entered into force on December 25, 2025. Article 2. These Rules enter into force on the eighth day from the date of publication in the "Official Gazette".