Hanfa Board bans insurance companies from the payment of dividend and ensures the earnings are retained in Croatia
Published: 26. March 2020
The Board of the Croatian Financial Services Supervisory Agency (Hanfa) at its meeting held today adopted a decision banning the insurance companies in Croatia and the Raiffeisen Pension Insurance Company from paying dividends from realised profits until 30 April 2021. The decision shall enter into force on the day of its adoption. As a result, about HRK 4 billion of retained earnings in balance sheets of insurance companies will be retained in Croatia.
”This decision was issued due to extraordinary market circumstances, with the aim of keeping the business operations of insurance companies as stable as possible and maintaining the stability of the financial system. In these circumstances, we expect insurance companies to direct their profits towards strengthening their own business operations, rather than using them to pay dividends to their owners“, Ante Žigman, the President of Hanfa Board, explained the reasoning behind the decision.
The decision applies to profits from 2019 and from previous years. It will strengthen the liquidity of insurance companies in the context of the coronavirus pandemic, as well as the recent earthquake that struck the Croatian Capital.
Hanfa also issued individual decisions based on the assessment of capital position. Today they were issued to the following companies: ADRIATIC OSIGURANJE d.d., Zagreb, AGRAM LIFE osiguranje d.d., Zagreb, Allianz Hrvatska d.d., Zagreb, CROATIA osiguranje d.d., Zagreb, EUROHERC osiguranje d.d., Zagreb, GENERALI OSIGURANJE d.d., Zagreb, GRAWE Hrvatska d.d., Zagreb, HOK-OSIGURANJE d.d., Zagreb, MERKUR OSIGURANJE d.d., Zagreb, UNIQA osiguranje d.d., Zagreb, Wiener osiguranje Vienna Insurance Group d.d., Zagreb and Raiffeisen mirovinsko osiguravajuće društvo d.d., Zagreb.
The decision shall enter into force on the day of its adoption and publication on Hanfa's website, and it shall remain valid until 30 April 2021. Depending on market circumstances, it may be renewed.
Today's decision follows the ban issued at the extraordinary meeting held at the beginning of this week to the company OTP osiguranje d.d., Zagreb. At this company's general meeting held on 19 March 2020, a decision was adopted to pay the dividend from retained profit for the period from 2016 to 2019.
Hanfa will continue to monitor the emergent circumstances and actively work to protect and maintain the stability of the non-banking financial system in Croatia.