NOVIS Company - Frequently Asked Questions

Following the withdrawal of its authorisation, NOVIS is no longer allowed to conclude new insurance contracts or to acquire new customers. However, if you already have a valid contract with NOVIS, you remain a customer of the company. Your insurance contract has not been cancelled by the withdrawal of NOVIS’s authorisation and remains valid. Both parties remain bound by their contractually agreed obligations. For customers, this means that their rights and obligations are the same as before. Once liquidation commences, the liquidator will inform all customers about what the next steps are.

NOVIS is required to continue fulfilling its obligations under the insurance contracts it has concluded; in other words, it must continue paying benefits and meeting other contractual obligations until it officially enters into liquidation. Liquidation commences when the court registers the company’s liquidator in the Commercial Register. You can find out whether it has done so from the Commercial Register website (www.orsr.sk), and the Bank will also publish this information on its own website (www.nbs.sk). Once liquidation commences, the liquidator will inform all customers about what the next steps are.

You do not at present have to report to anyone that you are a customer of NOVIS.

Your insurance contract has not been cancelled by the withdrawal of NOVIS’s authorisation. Until liquidation begins, there is no change in respect of your insurance coverage, entitlement to benefits, and other entitlements under your contract. Once liquidation commences, the liquidator will inform all customers about what the next steps are.

With each contract being specific in terms of its length and the agreed insurance terms and conditions, there cannot be a one-size-fits-all approach to customers. Moreover, if the contract was concluded in a foreign country, it is governed by the insurance law of that country, not Slovakia.

If you are wondering what to do with your insurance contract, you should review the specific terms and conditions of your contract before making any decisions. You retain all the options arising to you under your contract. Please note that you may be charged a penalty or fees if you terminate your insurance contract or even if you stop paying your premiums. For you to make the best possible decision about your course of action, especially in the case of long-term contracts with regular premium payments, we strongly recommend that you consult, in addition to NOVIS, one or more of the following: your financial intermediary; a lawyer; a consumer association. The Bank cannot by law provide legal advice or legal aid.

Your insurance coverage remains fully in place until liquidation begins. Once liquidation commences, the liquidator will inform all customers about what the next steps are. The Bank has petitioned the court to place NOVIS into liquidation. When the court orders the liquidation of NOVIS and appoints a liquidator, the Bank will inform the public of this fact.

The strictest sanction that the Bank can impose on a supervised entity is withdrawal of authorisation, which is therefore only used in the most serious cases. The Bank’s primary objective is always to remedy the identified deficiencies of the supervised entity so that it operates in compliance with regulatory requirements and provides services to its customers in a proper manner.

The Bank has taken a number of measures against NOVIS that cannot be made public for reasons of confidentiality. It has also issued a number of sanction decisions against the company, which are published on the Bank’s website (www.nbs.sk). Considering that none of these steps resulted in any long-term improvement in NOVIS, the Bank decided to withdraw the company’s authorisation to conduct insurance business.

In the period from the establishment of NOVIS in 2013 until the withdrawal of its authorisation in 2023, the Bank imposed the following sanctions:

1. Decision of the Financial Market Supervision Unit (hereinafter ‘the FMSU’) of 22 April 2015 (document number No ODT-12207/2014-5), as amended by a Decision of the Bank Board of Národná banka Slovenska (hereinafter ‘the Bank Board’)
   (becoming final on 7 January 2016):

• concerning deficiencies in the submission of documents (a certified copy of the articles of association following their amendment; an extract from the security issuer register; a list of the company’s shareholders) and in the appointment of management board members and the regulation of legal relations vis-à-vis them;
• imposing a fine of €10 000;

(Available in Slovak at: https://nbs.sk/vyroky/14186),

2. Decision of the FMSU of 11 September 2018 (document number 100-000-120-315, file number NBS1-000-021-792) (becoming final on 28 December 2018):

• concerning deficiencies in complying with rules on technical provisions;
• ordering the elimination and remedy of the deficiencies identified in order to ensure the calculation and creation of technical provisions in the correct amount, as well as ordering the periodic provision of information to NBS about the company’s financial situation;

(Available in Slovak at: https://nbs.sk/vyroky/14935),

3. Decision of the FMSU of 28 January 2019 (document number 100-000-150-687, file number NBS1-000-027-223), as amended by a Decision of the Bank Board of 1 October 2019 (file number NBS1-000-036-210)
   (becoming final on 10 October 2019):

• concerning deficiencies in the area of financial consumer protection, specifically the breach of prohibitions on the use of unfair contract terms, on the use of unfair commercial practices, and on the undue imposition of obligations;
• imposing a fine of €175 000;

(Available in Slovak at: https://nbs.sk/vyroky/18010),

4. Decision of the FMSU of 28 February 2020 (document number 100-000-221-679, file number NBS1-000-039-534) (becoming final on 19 March 2020):

• concerning several deficiencies in relation to the company’s corporate governance, reporting to NBS, the conduct of business without an authorisation (outside EU territory), the exercise of voting rights by shareholders, and the accounting policies used;,
• imposing a fine of €50,000;         

(Available in Slovak from: https://nbs.sk/vyroky/15334),

5. Decision of the FMSU of 28 February 2020 (document number 100-000-221-562, file number NBS1-000-036-293) (becoming final on 19 March 2020):

• concerning several deficiencies in the form of non-compliance with rules on the calculation and establishment of technical provisions (more specifically, for example, deficiencies in the assumptions, methods, models and approaches used, in the performance of the actuarial function, in valuation, and in the documentation and validation of data);
• imposing a fine of €50,000;

(Available in Slovak from: https://nbs.sk/vyroky/15333),

6. Decision on an Interim Measure of the Supervision and Financial Consumer Protection Division (hereinafter ‘the CSD’) of 9 September 2020 (document number 100-000-249-678, file number NBS1-000-053-337), as amended by Decision of the Bank Board of 11 February 2021 (document number 100-000-273-424, file number NBS1-000-054-940):

• concerning deficiencies in the area of asset investment;
• imposing an interim measure on NOVIS that conditionally bans it from concluding new insurance contracts, lays down notification obligations, and requires it to invest all premiums received;

In accordance with Section 25(3) of Act No 747/2004, this Decision on an Interim Measure expired on 30 June 2021, when a Decision on the Merits (document number 100-000-283-290, file number NBS1-000-053-337) became final (see point 8 below);

(Available in Slovak from: https://nbs.sk/vyroky/18059),

7. Decision on an Interim Measure of the CSD of 5 November 2020 (document number 100-000-258-757, file number NBS1-000-054-839), as amended by Decision of the Bank Board of 13 April 2021 (document number 100-000-276-949, file number NBS1-000-056-590):

• concerning a number of deficiencies in the form of non-compliance with rules on the calculation and establishment of technical provisions;
• imposing an interim measure on NOVIS that restricts the disposal of its assets and lays down notification obligations;

In accordance with Section 25(3) of Act No 747/2004, this Decision on an Interim Measure was revoked on 3 February 2022, when another Decision (document number 100-000-328-739, file number NBS1-000-054-839) became final (see point 9 below);

(Available in Slovak from: https://nbs.sk/vyroky/18068),

8. Decision on the Merits of the CSD of 19 April 2021 (document number 100-000-283-290, file number NBS1-000-053-337), as amended by Decision of the Bank Board of 21 June 2021 (document number 100-000-293-318, file number NBS1-000-061- 006)
   (becoming final on 30 June 2021)

• concerning deficiencies in the form of imprudent asset investment procedures;
• imposing a sanction measure on NOVIS that requires it to gradually increase the value of invested assets to the extent required under its insurance contracts, and laying down notification obligations;
• revoking the interim measure referred to in point 6 above;

(Available in Slovak from: https://nbs.sk/vyroky/18080),

9. Decision of the CSD of 27 January 2022 (document number 100-000-328-739, file number NBS1-000-054-839):

• revoking the Decision on an Interim Measure of 5 November 2020 (document number 100- 000-258-757, file number NBS1-000-054-839) in conjunction with Decision of the Bank Board of 13 April 2021 (document number 100-000-276-949, file number NBS1-000-056-590) on the grounds that the reasons for the issuance of the interim measure (see point 7 above) have ceased to exist;

(Available in Slovak from: https://nbs.sk/vyroky/18089),

10. Decision on the Merits of the CSD of 14 January 2022 (document number 100-000-326-264, file number NBS1-000-064-454), as amended by Decision of the Bank Board of 6 June 2022 (document number 100-000-352-301, file number NBS1-000-069-408)
    (becoming final on 15 June 2022)

• concerning non-compliance with the Solvency Capital Requirement (SCR) due to the use of incorrect assumptions for the calculation of technical provisions;
• imposing a sanction measure on NOVIS that requires it to use technical provisions in an amount calculated according to realistic assumptions set by Národná banka Slovenska pursuant to the relevant regulation and to subsequently recalculate and replenish its own funds so that they are sufficient to cover the SCR, and that restricts the disposal of its assets;

(Available from: https://nbs.sk/vyroky/18233).

The Bank has petitioned the court to place NOVIS into liquidation. The process of appointing the liquidator now falls entirely within the competence of the Bratislava City Court.

Slovakia does not have any guarantee scheme in the insurance sector.

Once the authorisation withdrawal decision became final, the Bank petitioned the competent court to place NOVIS into liquidation and to appoint a liquidator.

Once appointed, the liquidator will assume the management of NOVIS, examine the company’s assets and, accordingly, decide whether the company should be declared insolvent or whether its assets are sufficient to fully satisfy customers’ claims.

The Bank will inform the public about further developments.