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NOVIS insurance company

27 Apr 2021

The Financial Market Supervision Unit of NBS, as being the competent body for proceedings of the first instance (hereinafter ‘the first instance supervisory authority’), issued a decision in April 2021 ruling that NOVIS Poisťovňa, a.s., which since 5 April 2019 has operated under the name NOVIS Insurance Company, NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, NOVIS Poisťovňa a.s. (hereinafter ‘the insurance company’), had breached its duty to act prudently because it had invested premiums received from clients to a lesser extent than it had committed itself to in its insurance contracts.

The first instance supervisory authority has concluded the first instance sanction proceeding against the insurance company by issuing a decision on imposing sanctions on 19 April 2021 (hereinafter ‘the decision’).

The decision concerns unit-linked insurance contracts concluded between the insurance company and its clients in Slovakia and abroad (hereinafter ‘insurance contracts’).

In the decision, among other things, the first instance supervisory authority imposes on the insurance company a corrective measure enforceable from 20 April 2021, namely the obligation to invest all premiums received since the delivery of the decision to the correct extent, in accordance with the insurance contracts.

Other parts of the decision will become enforceable later, and the first instance supervisory authority will inform about them in accordance with the Act on Financial Market Supervision subsequently, on 11 May 2021, on 01 July 2021 and on 01 October 2021.

The insurance company may appeal against the decision. Such appeal has no suspensive effect, therefore the insurance company must comply with the decision within time limits set out in the operative part of the decision (when the individual parts become enforceable), regardless of the appeal lodged.

The first instance supervisory authority also cancelled the interim measure by the decision, as no further duration is required as a result of the sanction imposed.

The current enforceable operative part of the decision: https://nbs.sk/vyroky/18080

Development:

– On 25 September 2020, NBS issued a press release providing details about the interim measure which started a sanction proceeding against the insurance company. The proceeding was started by the first instance supervisory authority based on findings during the on-site inspection. NBS cooperated through cooperation platform with the European Insurance and Occupational Pensions Authority (EIOPA) and Member states supervisory authorities in which the insurance company operates, in that matter.

– The interim measure was partially revoked (part banning new business) and upheld in rest by the decision of the second instance body of NBS from February 2021 (see the press release from 23 February 2021 below).

– Press release concerning the interim measure and its subsequent updates:

National Bank of Slovakia
Communications Section
Imricha Karvaša 1, 813 25 Bratislava
Contact: press@nbs.sk

Reproduction is permitted provided that the source is acknowledged.

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