Transition period of the Act on Insurance Distribution ends – Amendment application of registration of insurance intermediary must be submitted to the Financial Supervisory Authority
February 22, 2019
The Act on Insurance Distribution (234/2018) entered into force on 1st of October 2018 brought changes to the regulation of insurance intermediaries. The new act includes changes to the registration requirements of insurance intermediary and also the insurance intermediaries registered before 1st of October 2018 must fill these new requirements. The transition period ends 23rd of February 2019, by which the new requirements must be met, and amendment application must be submitted to the Financial Supervisory Authority. Below is described the key changes to be included in the amendment application.
Person responsible of insurance distribution and persons involved in distributing insurances
The insurance intermediary must submit to the insurance intermediary register the information concerning the person who is responsible of distributing insurances. The person responsible of distributing insurances must be part of the management of the insurance intermediary, for example CEO or sales director of the insurance intermediary.
In addition, the insurance intermediary must submit a clarification of reliability, suitability and professional qualifications of the person responsible of distributing insurances. This clarification will be provided on a separate Fit & Proper form.
The Act on Insurance Distribution requires that the full-time insurance intermediary must register to the insurance intermediary register at least 30 percent of the persons involved in the distributing of insurances. Hence, the insurance intermediary must confirm in the amendment application that at least 30 percent of the persons participating in the distribution of insurances have been registered.
The insurance intermediary register includes information concerning the management of the insurance intermediary. The management refers CEO and deputy CEO, member of the board of directors and deputy member of the board of directors, as well as general partners. The insurance intermediary must include the names and personal identification numbers of the management to the amendment application.
In addition, the full-time insurance intermediaries must submit a clarification of reliability, suitability and professional qualifications of the all management members of the insurance intermediary as an annex to the amendment application.
Owners and others with close ties
The insurance intermediary must submit to the insurance intermediary register the information of the owners who directly own at least one tenth of the insurance intermediary and those who have a control on insurance intermediary under Accounting Act and those who have close ties to the insurance intermediary.
The amendment application must also include clarification of reliability, suitability and professional qualifications of above-mentioned owners of the insurance intermediary and others with close ties to the insurance intermediary if they are natural persons.
Effects of failure to submit the amendment application
The insurance intermediary is responsible of the correctness and updating of its register information. If the insurance intermediary does not submit the amendment application to the Financial Supervisory Authority by the end of transition period, the Financial Supervisory Authority shall remove the insurance intermediary from the insurance intermediary register. Hence, if the insurance intermediary is removed from the register, it can no longer distribute insurances and act as insurance intermediary.