NBS statement on the issuance of an interim measure
On 9 September 2020 Národná banka Slovenska (NBS) issued an interim measure against the insurance undertaking which was formerly called NOVIS Poisťovňa, a.s. and which since 5 April 2019 has operated under the name NOVIS Insurance Company, NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, NOVIS Poisťovňa a.s. (hereinafter ‘NOVIS’ ). The interim measure became enforceable when NOVIS received the interim measure decision, on 11 September 2020, and NOVIS is required to comply with it henceforth. The operative part of the decision is published on the NBS website: https://nbs.sk/vyroky/18059
Reason for the interim measure: NBS’s reasonable suspicion that NOVIS was not investing premiums earned under unit-linked insurance contracts to a sufficient extent , meaning not at the level required under the terms and conditions of insurance contracts or not even at the surrender value which the clients would be entitled to claim upon their early termination of the insurance contract).
Substance of the interim measure: this is a temporary preventive measure which prohibits NOVIS from concluding any new unit-linked insurance contracts in the case that the extent of premium investments under all existing contracts has not reached the stipulated level (at least at the level of the surrender value).
The interim measure also obliges NOVIS to ensure that all premiums received from clients after its receipt of the interim measure decision are invested to the correct extent (as defined by terms and conditions of all insurance contracts).
Scope of the interim measure: it applies to NOVIS’s unit-linked insurance contracts (i.e. policies that include an investment component) concluded in any of the countries in which NOVIS conducts such business (Slovakia, Czechia, Italy, Hungary, Poland, Germany, Austria, Sweden, Finland, Iceland and Lithuania).
Commencement of sanction proceedings: pursuant to the Financial Market Supervision Act (No 747/2004), receipt of the interim measure decision constitutes the start of the sanction proceedings for the infringements in respect of which the measure was issued.
Duration of the interim measure: The interim measure is in force. NBS may decide to revoke the interim measure later only if the grounds for the measure no longer exist. Otherwise, the measure will remain in force until the sanction proceedings in this matter are duly concluded, and NOVIS must comply with its obligations thereunder for the duration of that period.
Further details on the sanction proceedings and the nature of the infringements cannot be provided at this time, since the proceedings are non-public and still in progress. Once the proceedings have concluded, the information on decision on the substance of the case will also be published on the NBS website.
More information about the prohibition on NOVIS concluding new unit-linked insurance contracts
NOVIS is required to assess as at the end of each month whether it meets the conditions laid down by the interim measure (i.e. whether its investment of insurance premiums for all contracts is at the stipulated level of the surrender value).. If, as at the end of the given month, its premium investments are at the stipulated level, NOVIS may conclude new unit-linked insurance contracts beginning from the next month. This assessment needs to be done by NOVIS itself every month, according to the interim measure, to determine whether the ban of new unit-link insurance contracts applies for the next month or not.
Before the tenth day of each month, NOVIS must report to NBS the data on which NBS will base its ongoing evaluation of whether NOVIS is compliant with the interim measure. If NOVIS concludes any new unit-linked insurance contract while still not investing premiums to the stipulated extent (surrender value), it will be in violation of the interim measure. This would constitute a serious shortcoming that could result in NBS imposing more stringent penalties on NOVIS. NBS will evaluate NOVIS’s compliance with the interim measure for a given month after receiving the relevant data from NOVIS. After analysing those data, NBS will decide on whether any further measures need to be taken.
National Bank of Slovakia
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2142, +421-2-5865 2142, +421-2-5787 2169, +421-2-5865 2169
Reproduction is permitted provided that the source is acknowledged.