Information concerning general good requirements of Croatian law (mandatory provisions of Croatian law)
This Information concerns insurance undertakings and intermediaries from the EEA, which in accordance with Article 147 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) or Article 4 of the Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution have been authorized by home state supervision authority to carry out insurance operation in the territory of the Republic of Croatia.
Croatian insurance legislation in force
Provisions that regulate insurance business in the Republic of Croatia are laid down, inter alia, in the following acts:
- The Insurance Act (IA) - Official Gazette No. 30/15
- The Act on Compulsory Insurance within Transport Sector (ACITS) - Official Gazette No. 151/05, 36/09, 75/09,76/13, and 152/14
- Civil Obligations Act (COA) - Official Gazette No. 35/05, 41/08, 125/11, 78/15 and 29/18
- Act on Mandatory Health Insurance (Official Gazette No. 80/13 i 137/13).
This text summarizes only the general good requirements of the Insurance Act, the Act on Compulsory Insurance within Transport Sector, the Civil Obligations Act and Act on Mandatory Health Insurance.
Carrying on of insurance or reinsurance operations by insurance or reinsurance undertaking from a Member State in the Republic of Croatia either directly or through a branch is covered by provisions of Article 61-77 of the Insurance Act.
Policy and other insurance-related documents (Article 926 of the COA)
- The policy shall include the following particulars: parties to the contract, insured person or thing or another object of insurance, risk covered by the insurance, duration of the contract and duration of the insurance cover, the amount insured or indication that the insured amount is unlimited, premium or contribution (stake), date when the policy is issued and signature of the parties to the contract.
- The insurance policy may temporarily be replaced by the covering note or another insurance-related document where material provisions of the contract are entered.
- The insurer shall notify the policyholder that general and/or special insurance terms and conditions represent an integral part of the contract and shall provide the policyholder with the text of the terms and conditions, unless they are already printed on the policy.
- Fulfilment of the obligation referred to in paragraph 3 of this Article shall be indicated in the policy.
- In the case of disparity between any of the provisions of the general or special conditions and a provision of the policy, the latter shall apply; in the case of disparity between the printed and typed provision, the typed one shall apply, and in the case of disparity between the typed provisions and those that are handwritten, the handwritten provision shall apply.
- In accordance with the agreement between the parties, the policy may be registered in the name of a person, may be of the order or bearer type, or issued on behalf of whomever it may concern.
Life insurance policy (Article 967 of the COA)
- In addition to general particulars of any policy, a life insurance policy should contain the following: name of a person to whose life a policy relates, date of birth of that person or time limit on which enjoyment of right to the insured amount depends.
- Life insurance policy may be registered in the name of a person, or may be in a form of order, but may not be in a bearer form.
- For an endorsement of a policy in a form of order to be valid it should contain name of beneficiary, date of endorsement and signature of endorser.
Insurance undertaking from another Member State may advertise their services in the Republic of Croatia through all available means of communication, under the conditions that the advertising is in accordance with the provisions of IA which regulate advertising and other regulations governing the form and content of such advertising and that they have been adopted in the interest of the common good.
Information provided to policyholders (Articles 380-382 of the IA)
- Before the insurance contract is concluded, an insurance company shall communicate, in writing (by post or e-mail), to the policyholder:
- The name and address of the insurance undertaking by which the contract will be concluded;
- When the contract is concluded trough a branch, beside the information about the name and address of the insurance undertaking, the name and address of the branch by which the contract will be concluded;
- General terms and conditions of insurance to the insurance contract;
- Deadline within the offer obliges the bidder, the right to recall the offer for concluding insurance contract and the right to withdraw from the concluded insurance contract,
- right to cancellation of or withdrawal from the contract;
- Duration of the insurance contract;
- Level of insurance premium, method of payment of insurance premium, level of contributions, tax and other costs charged in addition to the insurance premium, and the total cost of insurance;
- Information about arrangements for handling complaints of policy holders concerning contracts, including the address for for receiving complaints and the existence of a complaints body,
- Supervisory authority competent for the supervision of the insurance company concerned.
- Beside above mentioned information under item 1., insurance undertaking which provides non-life insurance is obligated to provide the following information:
- If the policy holder is a natural person, the law applicable to the contract, where the parties do not have a free choice,
- the fact that the parties are free to choose the law applicable and the law the insurer proposes to choose,
- Where non-life insurance is offered under the right of establishment or the freedom to provide services, the policy holder shall, before any commitment is entered into, be informed of the Member State in which the head office or, where appropriate, the branch with which the contract is to be concluded is situated, and also in this case the name and address of the representative of the non-life insurance undertaking referred to in Article 148(2)(a) of Solvency II Directive.
- Beside above mentioned information under item 1., insurance undertaking which provides life insurance is obligated to provide the following information:
- a concrete reference to the report on the solvency and financial condition as laid down in Article 51 of the Solvency II Directive, allowing the policy holder easy access to this information,
- the definition of each benefit and each option,
- base, scale and conditions for participation in the profits and the right to payment of accrued gain in all cases payments;
- table of surrender values and tables capitalized sum per insurance year;
- information about the right of 30 days from the receipt of notice from the insurance undertaking to cancel the insurnace contract without any obligations arasing from the insurance contract
- specific information shall be supplied in order to provide a proper understanding of the risks underlying the contract which are assumed by the policy holder;
- arrangements for application of the cooling-off period which includes terms and consequences concluding this arrangements, when applicable;
- the law applicable to the contract where the parties do not have a free choice;
- where the parties are free to choose the law applicable, the law the life insurance undertaking proposes to choose.
- In the case of unit-linked contracts, the insurance company shall prior to conclusion of the insurance contract communicate to the policyholder, in addition to the particulars referred to in items 1. and 3. Inform the policy holder about the following:
For life insurance contracts where the policyholder bears the investment risk the insurance undertaking has the obligation to notify prior to the conclusion of insurance contracts, the information referred to items 1 and 3, and the following:
- In the case of insurance relating to the value of units of the UCITS fund, the information contained in the prospectus and rules of the UCITS fund as defined by the law governing the establishment and operation of openend investment funds with public offering
- In the case of insurance relating to the value of the assets or shares of internal funds, the information contained in the internal rules of the fund referred to in Article 162, paragraph 5 of the IA
- In the case of insurance-related equity index or other benchmark, information about the capital, stock index or other benchmarks.
If the information provided in this section are contained in the conditions of insurance which the insurance undertaking has provided to the policyholder prior to the conclusion of an insurance contract, it is considered that the undertaking fulfilled the obligation of providing information to the policyholder.
In case of concluding the insurance contract through the website the information referred to in this section shall be made available on the website and accepted by the policyholder prior to the conclusion of insurance.
The policy holder shall be kept informed throughout the term of the contract of any change concerning the above mentioned information from item 1 to item 4 (Article 380 of IA).
- Where, in connection with an offer for or conclusion of a life insurance contract, the insurer provides figures relating to the amount of potential payments above and beyond the contractually agreed payments, the insurer shall provide the policy holder with a specimen calculation whereby the potential maturity payment is set out applying the basis for the premium calculation using three different rates of interest. This shall not apply to term insurances and contracts. The insurer shall inform the policy holder in a clear and comprehensible manner that the specimen calculation is only a model of computation based on notional assumptions, and that the policy holder shall not derive any contractual claims from the specimen calculation.
- In the case of insurances with profit participation, the insurer shall inform the policy holder annually in writing of the status of the claims of the policy holder, incorporating the profit participation. Furthermore, where the insurer has provided figures about the potential future development of the profit participation, the insurer shall inform the policy holder of differences between the actual development and the initial data
- In the case of insurance where the policy holder bears the investment risk, the insurance undertaking shall notify the policy holder annually in writing of the value of the assets per insurance policy in accordance with Article 162 of IA.
Contents of the communication
The information shall be provided in a clear and accurate manner, in writing, in Croatian language. However, such information may be in another language if the policy holder so requests and the law of the Member State so permits or the policy holder is free to choose the law applicable.
According to Article 72 paragraph 1 item 11 of the Act on Compulsory Health Insurance (Official Gazzette No. 80/13, 137/13) incomes of the compulsory health insurance are, among others, incomes from compulsory insurance Motor Third Party liability. Furthermore, according to Article 72 paragrapf 3 of the said Act those incomes shall be paid by insurance companies in the amount of 4% of the settled risk premium of compulsory insurance Motor Third Party liability. This amount represents an advance compensation of damages to the Croatian Institute for Health Insurance in the cases referred to in Article 140 of said Act which have caused the owners or users of the insured vehicle. Furthermore, according to Article 72 paragraph 4 of the said Act, insurance companies are obliged to reimbursement of income referred to in Article 72 paragraph 1, item 11 of the said Act in accordance with Article 72, paragraph 3 of the said Act. They are obliged to reimbursement of afore-mentioned income by the 10th day of the month for the previous month on the total amount of settled risk premium of compulsory insurance Motor Third Party liability on the behalf of the account of the Croatian Institute for Health Insurance.
Furthermore, according to Article 77 paragraph 1 of the Insurance Act (Offical Gazzette No. 30/15) the said Act on Compulsory Health Insurance applies to all insurance undertakings from the EEA which in accordance with the provisons of the Insurance Act and Act on Compulsory Insurance within the Transport Sector provide services regarding compulsory insurance Motor Third Party liability on the terirorry of the Republic of Croatia under freedom of services and freedom of establishment. Following those, insurance companies from another Member State which provide compulsory insurance Motor Third Party liability on the teritorry of the Republic of Croatia on a freedom to provide services or freedom of establishment are obliged to pay 4% of the settled risk premium of compulsory insurance Motor Third Party liability to the Croatian Institute for Health Insurance as described above.
Obligation on the part of insurance and reinsurance brokers and insurance agents to provide information
Article 424 of the IA:
- Prior to the conclusion of any insurance or reinsurance contract and at the time of amendment or renewal thereof, an insurance agent or an insurance and reinsurance broker shall provide the insurance and/or reinsurance policyholder with the following information:
- his/her name, surname and address;
- the register in which he/she has been included and the means for verification of that fact;
- the insurance agency or insurance and reinsurance brokerage company with which he/she is employed;
- the company names of insurance and/or reinsurance companies with which he/she has entered into an agreement;
- the information on out-of-court settlement of disputes between the persons insured or insurance policyholders or reinsurance policyholders or customers and insurance companies or reinsurance companies or insurance service providers or reinsurance service providers, and the internal procedures for the settlement of complaints of customers referred to in Article 377 of this Act.
- the information on the relationship with the insurance company when the insurance company in relation to the close connection to this Act
- other information from Article 380 of the IA
- An insurance and reinsurance broker is obliged to make the analysis referred to in Article 411, paragraph 2, point 1 of this Act on the basis of a sufficiently large number of insurance and/or reinsurance contracts available on the market, to enable him/her to make recommendations, in accordance with professional criteria, as to which contract would be adequate to meet the needs and requirements of insurance and/or reinsurance policyholders.
- Prior to the conclusion of any contract, an insurance and reinsurance broker shall define, on the basis of information provided by the insurance policyholder, reinsurance policyholder or the insured, the needs and wishes of that insurance and/or reinsurance policyholder or insured, as well as the underlying reasons for any advice given to that policyholder or insured concerning the given insurance and/or reinsurance contract.
Form of information provided by insurance and reinsurance brokers and insurance agents
Article 425 of the IA:
- The information referred to in Article 424 of this Act shall be communicated to the insurance or reinsurance policyholder:
- in writing or on any other durable medium available and accessible to the insurance or reinsurance policyholder;
- in a manner comprehensible to the insurance or reinsurance policyholder;
- in the Croatian language, unless otherwise agreed.
- By way of derogation from paragraph 1 of this Article, the information may be provided orally where the insurance or reinsurance policyholder requests it, or where immediate risk cover is necessary.
- In the cases referred to in paragraph 2 of this Article, the information shall be provided in accordance with paragraph 1 of this Article immediately after the conclusion of the insurance or reinsurance contract.
Compulsory insurance within the transport sector
Compulsory insurance within the transport sector includes:
- Accident insurance of passengers in public transport
- Insurance of the owner or user of the vehicle against liability for damage caused to third parties (motor vehicle liability insurance)
- Insurance of the owner or user of an aircraft against liability for damage caused to third parties and passengers
- Insurance of the owner or user of a motorboat or yacht against liability for damage caused to third parties.
Notification of policy conditions and technical bases
According to Article 10 of the ACITS, insurance undertaking has to notify the supervisory authority of the policy conditions, at least 60 days prior to the application thereof, in order to have the compliance with regulations, insurance principles and good business practices verified. The supervisory authority may request scales of premiums, technical bases and elements used for premium calculation, for purposes of verification their compliance with Croatian regulations.
Should the policy conditions and technical bases fail to comply with regulations, actuarial principles and good business practices, the supervisory authority shall order that they be amended pursuant to regulations.
Pursuant to Article 201, paragraph 4 of the IA an insurance company shall notify on the demand of the supervisory authority the terms and conditions of insurance contracts and other documents, exclusively for the purpose of verifying whether they are consistent with the IA and other regulations which define insurance contract.
Fees to be paid to the Croatian Financial Services Supervisory Agency
In accordance with Article 4 paragraph 5 of the Croatian Ordinance on calculation, amount and charging of fees paid to the Croatian Financial Services Supervisory Agency for the year 2018 (Official Gazette No. 128/17) the insurance company should pay annual flat fee for providing insurance business on a freedom of establishment basis in the Republic of Croatia in the amount of 20,000.00 HRK to the account holder: the Croatian Financial Services Supervisory Agency, Miramarska 24b, 10 000 Zagreb, IBAN: HR91 2390 0011 1003 29373, SWIFT CODE: HPBZHR2X, BANK: Croatian Postal Bank with reference number 857within three months of the end of the year for which the fee is calculated.
In addition, please note that all costs of wire transfer are borne by the payer (the cost of the Bank and the intermediary / foreign banks).