Insurance supervision information

Operation of foreign reinsurance companies from the USA in the territory of the Slovak Republic on the basis of the Agreement between the EU and the USA in the field of insurance and reinsurance

On 4 April 2018, the Bilateral Agreement between the European Union and the United States of America on prudential measures in the field of insurance and reinsurance (hereinafter only as ‘the Bilateral Agreement’; available here: https://eur-lex.europa.eu/legal-content/SK/TXT/?uri=CELEX%3A22017A1006%2801%29&lang1=SK&from=EN&lang3=choose&lang2=choose&_csrf=257542b3-59e4-459c-81f2-18207c03fa50) came into force, which allows, in line with Art. 8 par. 4 Act No. 39/2015 Coll. on insurance and amending certain laws, US reinsurance companies to underwrite insurance risks from European insurance companies in the form of reinsurance contracts without the need to establish a branch and meet other similar requirements (and, conversely, European reinsurance companies to underwrite insurance risks from US insurance companies). However, this is only applicable if such a reinsurance undertaking meets the specified criteria (Article 3(4) of the Bilateral Agreement). In view of the above, the National Bank of Slovakia announces the method of proving these conditions by a foreign reinsurance company from the USA that is interested in underwriting insurance risks from Slovak insurance companies.

A foreign reinsurance undertaking from the USA (hereinafter only as ‘foreign reinsurance undertaking’) will notify the National Bank of Slovakia of its intention well in advance before concluding a reinsurance contract with a Slovak insurance company. This information shall be submitted in writing and shall contain at least the following information:

1. the name of the foreign reinsurance undertaking, registered office, LEI code, if assigned, information on entry in the relevant register and identification number, if assigned;
2. information about the contact person or legal representative for communication with the National Bank of Slovakia;
3. information on the insurance risks it intends to underwrite;
4. information on the authorisation of the foreign reinsurance undertaking to conduct reinsurance activities and on the authority that issued the authorisation;
5. the following annexes demonstrating the fulfilment of the conditions under Article 3(4) of the Bilateral Agreement:
   1. a completed Data Questionnaire, which contains the following information:
      1. the level of the foreign reinsurance undertaking’s minimum capital and surplus or own funds (Article 3(4)(a));
      1. the level of capital of the foreign reinsurance undertaking (Article 3(4)(b));
      1. information relating to the reinsurance taken over by the ceding reinsurer according to the surrendering company, the reinsurance assigned by the ceding reinsurer and the receivables from reinsurance against reimbursed and unpaid losses according to the transferee (Article 3(4)(i));
   1. a declaration by the foreign reinsurance undertaking that it shall immediately inform the National Bank of Slovakia if: the level of minimum capital and surplus or own funds falls below €226 million; the level of capital falls below 300%, or any regulatory action is taken against it for serious non-compliance with the applicable law (Article 3(4)(c));
   1. declaration of the foreign reinsurance undertaking on the acceptance of the jurisdiction of Slovak courts (Article 3(4)(d));
   1. a declaration by the foreign reinsurance undertaking that it will pay for all final judgments issued to the surrendering insurer whenever they are enforced, which have been declared enforceable in the territory in which the judgment was given (Article 3(4)(f));
   1. a declaration by the foreign reinsurance undertaking that, in any reinsurance agreement with the Slovak insurance company, it will agree to provide collateral for 100% of the liabilities of the foreign reinsurance undertaking attributable to the assigned reinsurance under the said agreement, if the foreign reinsurance undertaking does not agree to enforce a final judgment that is enforceable under Slovak law or a duly enforceable arbitration award, irrespective of this; whether they were issued to the surrendering Slovak insurance company or, where applicable, to a foreign reinsurance company in the event of resolution of its resolution (Article 3(4)(g));
   1. a declaration by the foreign reinsurance undertaking that it does not currently participate in any solvent scheme of the arrangement involving the surrendering Slovak insurance undertakings and agrees that, if it joins such a scheme, it shall notify the surrendering Slovak insurance undertaking and its supervisor thereof and shall provide the surrendering Slovak insurance undertaking with 100 per cent collateral in accordance with the terms of the scheme (Article 3(4)(j));
   1. the audited financial statements for the two years preceding the notification of the intention to the National Bank of Slovakia.

Following the transmission of the favourable opinion issued by the National Bank of Slovakia concerning the intention to pursue activities within the territory of the Slovak Republic, the foreign reinsurance undertaking shall be entitled to make use of the option referred to above in accordance with the Bilateral Agreement. After the commencement of operations in the territory of the Slovak Republic, the National Bank of Slovakia will require the foreign reinsurance undertaking to submit the following documents and information on an annual basis:

• current audited financial statements,
  • completed Data Questionnaire.

Regular submission will take place on the basis of a letter from the National Bank of Slovakia to the foreign reinsurance company, within the time limit and in the manner specified therein.

Data questionnaire.xlsx