The Polish Financial Supervision Authority (KNF) will be entitled to punish foreign insurance companies or foreign reinsurance companies that carry out activities in the territory of the Poland through branches or under the freedom to provide services.
On 10 May 2019, the consultative phase of the bill amending the Act on compulsory insurance, the Insurance Guarantee Fund and the Polish Motor Insurers’ Bureau and the Act on insurance and reinsurance activity came to an end. NThe bill will now be referred to the Polish Parliament.
The proposed change in the Act on insurance and reinsurance activities will provide the supervision authority with the possibility of immediate intervention in the event of the necessity of immediate removal of irregularities. Moreover, KNF will not be obliged to notify the competent supervisory authority of the home country of the insurance company and wait for its response. Thus, the proposed regulation will be an exemption from the general principle of home country control.
KNF will thus be granted rights in relation to foreign insurance companies or foreign reinsurance companies analogous to those that it can perform in relation to domestic insurance companies or domestic reinsurance companies.
KNF will therefore be entitled, i.a. to impose on a member of the management board of an insurance company or a reinsurance company or the proxy a fine of up to three times the average monthly remuneration of the last 12 months, impose a fine on an insurance company or a reinsurance company up to 0.5% of the gross written premium demonstrated in the last financial statement submitted to the supervisory authority, or to prohibit the performance of activities in the territory of Poland.
According to art. 2 of the bill, KNF shall inform the competent supervisory authority of the home country of the insurance company on the applied measures, in order to enable it to issue a relevant decision, making this company facing the consequences.
The bill is an element of a wider process of increasing the effectiveness of supervision over the insurance market in Poland. In order to serve this purpose it is planned to appoint an additional deputy chairman of the KNF responsible for the insurance market.
We will inform you about the final shape of the bill and the course of legislative work.
