carrying on their business in the Czech Republic on the basis of authorisation granted in the United Kingdom of Great Britain and Northern Ireland in view of the end of the transition period
The Czech National Bank hereby notifies foreign insurance companies carrying on their business in the Czech Republic on the basis of authorisation granted in the United Kingdom of Great Britain and Northern Ireland (“UK”) including Gibraltar (“foreign insurance companies”) that after the end of the transition period under Article 126 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (“transition period”), i.e. on 1 January 2021, the authorisation of foreign insurance companies to carry on insurance business in the Czech Republic (under the single European passport) will end.
Unless an agreement on mutual relations between the UK and the European Union includes provisions enabling the continuation of the single European passport for insurance, after the end of the transition period foreign insurance companies will only be authorised to carry on activities in the Czech Republic that are necessary to settle obligations arising from contracts concluded before the end of the transition period and to terminate their activities in the Czech Republic, or to obtain authorisation to continue their business under current Czech legislation. Foreign insurance companies will not be authorised to create new obligations or change the scope of existing ones in any way. A licence to carry on insurance activities pursuant to Act No. 277/2009 Coll., on Insurance, as amended, is necessary for the provision of insurance services.
The Czech National Bank expects foreign insurance companies to inform individual policyholders and beneficiaries of the legal consequences of the end of the transition period in respect of their rights and obligations arising from insurance contracts and also of the actions that will be taken by foreign insurance companies to settle all claims and debts arising from those insurance contracts. The Czech National Bank also expects foreign insurance companies to be able to give evidence of the abovementioned to the Czech National Bank on request.
The Czech National Bank hereby notes that unless the provision of services by foreign insurance companies is governed by an agreement on mutual relations between the UK and the European Union, further operations of foreign insurance companies in the Czech Republic from 1 January 2021 onwards beyond the activities mentioned above will be deemed a breach of Act No. 277/2009 Coll., on Insurance, as amended, unless foreign insurance companies comply with the requirements for carrying on insurance business under this Act. In such case, foreign insurance companies will be deleted from the national register of insurance companies as of the end of the transition period.
The Czech National Bank will supervise compliance with duties by foreign insurance companies in the Czech Republic (i.e. the prohibition to conclude new contracts and change the scope of existing obligations). The Czech National Bank will treat foreign insurance companies as institutions from third countries in line with Recommendation 8 in the EIOPA Recommendations for the insurance sector in light of the United Kingdom withdrawing from the European Union[1] published on 19 February 2019 and will proceed in accordance with this document in the area of regulation and supervision of these institutions.
[1] Recommendations for the insurance sector in light of the United Kingdom withdrawing from the European Union. Available at: https://www.eiopa.europa.eu/content/recommendations-insurance-sector-light-united-kingdom-withdrawing-european-union_en?source=search.