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Licence

Here you can find information about applying for a licence, about the appointment of board members, the election of the chairperson of the supervisory board as well as cross-border activities conducted by insurance undertakings within the EEA .

The conditions for operation as a contractual insurance undertaking in Austria are defined in the Insurance Supervision Act 2016 (VAG 2016; Versicherungsaufsichtsgesetz 2016). Important information for parties applying for a licence can be found here Information for licence applicants (Format: pdf, Size: 279,0 KB, Language: English)

Under the Solvency II  rules, all members of staff of the insurance undertaking are required to have the skills, knowledge and expertise necessary to carry out the tasks assigned to them in an orderly manner (Article 258 (1) Delegated Regulation (EU) 2015/35). There are special rules contained in the law for certain groups of persons regarding the expertise-based qualification and personal reputation. There are notification requirements for these groups of persons, thereby ensuring monitoring by the FMA takes please prior to or immediately after the appointment.

1. Notification obligations for Insurance Undertakings

Notifications must be made electronically via the FMA ’s Incoming Platform. Forms have been developed that the undertaking is required to fill out. The forms contain details about the documentation that must also be submitted (e.g. a curriculum vitae and a criminal record certificate). An overview of the notification requirements that are relevant in practice can be found below:

  • Members of the management board The intended appointment of members of the management board must be notified at least one month prior to their appointment (Article 122 para. 1 no. 1 VAG ). The one month period starts with the act of appointment. Under Article 122 para. 3 VAG changes in conditions in relation to fitness and propriety requirements (pursuant to Article 120 paras. 1 to 3 VAG ), replacement due to their not being met, as well as them leaving are also required to be notified.
  • Chairperson of the Supervisory Board and other Members of the Supervisory Board Pursuant to Article 123 paras. 3 and 4 VAG the election (appointment and resignation) of supervisory board members is required to be notified without delay. The election and resignation of the chairperson of the supervisory board must also be notified without delay. Members of the supervisory board who are seconded by the works council must also be notified, since there is no exemption for them in the law.
  • Governance and other Key Functions The head of the risk management function, the compliance function, the actuarial function and the internal auditor function are all required to be notified without delay after their appointment. Pursuant to Article 120 para. 3 VAG this provision also applies to the other key functions identified by the insurance undertaking (as a general rule this is the person responsible for investment). Changes in relation to these persons are also subject to notification requirements pursuant to Article 122 para. 3 VAG .
  • Deputies for governance functions and other key functions Appropriate deputisation rules for governance functions and other key functions are derived from the requirement for the establishment of an appropriate organisational structure. However, no explicit reporting obligations exist in this regard under supervisory law.
  • Outsourcing Officer for Governance Functions and other Key Functions Guideline 14 of the EIOPA Guidelines on Systems of Governance (EIOPA-BoS-14/253) stipulates in the event of outsourcing of governance functions and key functions, that a person in the undertaking, who is fit and proper, is to be determined, who takes overall responsibility for the outsourced function. This person is subject to the same rules as the key functions in terms of notification requirements.
  • Responsible Actuary and Deputy The intended appointment of the responsible actuary and their deputy is required pursuant to Article 115 VAG to be notified to the FMA . This means that the notification must in any case take place prior to the appointment process. These persons leaving the undertaking must also be notified to the FMA including a statement about the reasons for this.

2. Review by the FMA

  • Management Board Article 120 paras. 1 and 2 VAG 2016 define the requirements in relation to the members of the management board. In terms of professional suitability, the FMA considers it important that every member of the management board of an insurance undertaking has the necessary knowledge about the regulations under supervisory law that apply to the undertaking, in order to be able to assume overall responsibility in the management board. In order to check adequate theoretical knowledge, generally by way of a follow-up to the notification regarding the appointment of a member of the board of management, an appointment is arranged for a Fit & Proper Test, containing questions about supervisory topics and standards. The Fit & Proper Test focuses on the main provisions of the VAG  2016, Delegated Regulation 2015/35, the applicable FMA regulations as well as entity-specific topics. Furthermore, knowledge is also assumed of the principle regulations under company law. In the event that the candidate does not pass the Fit & Proper Test, then an extended test is conducted. In the event that the member of the management board does not pass the extended test, the FMA will assume that they do not possess the necessary professional suitability and will take the relevant supervisory measures.
  • Chairperson of the Supervisory Board For the chairperson of the supervisory board the provisions set out in Article 123 paras. 1 and 2 VAG as well as rules until company law (in particular Articles 86 et seq AktG ) are relevant. In terms of professional suitability, the FMA considers it important that the chairperson of the supervisory board of an insurance undertaking has the necessary knowledge about the regulations under supervisory law that apply to the undertaking, that are necessary for the orderly performance of their function as chairperson of the supervisory board. In order to check adequate theoretical knowledge, generally by way of a follow-up to the notification regarding the election of the chairperson of the supervisory board, an appointment is arranged for a Fit & Proper interview, containing questions about supervisory topics and standards that are relevant for the supervisory board as well as undertaking-specific topics. Where the FMA reaches the impression from this interview that the chairperson of the supervisory board does not fulfil these requirements, then the undertaking will be informed of this by the FMA . The FMA will then take the necessary measures under supervisory law.
  • Governance and/or other key functions In Article 120 para. 3 VAG and the corresponding provisions in Delegated Regulation (EU) 2015/35 requirements are defined for those persons who are the heads of governance or other key functions. Regarding the professional qualification of such persons, the FMA considers it material that they possess adequate knowledge to be able to discharge their responsibilities in an orderly manner. The checking of conditions for fitness and propriety will as a general rule take place in conjunction with notification of the appointment on the basis of the submitted documentation. The FMA reserves the right on a case-by-case basis to invite the appointed persons to an interview and/or test for checking their theoretical knowledge. Where the FMA has justified grounds to doubt that they meet the required standards of fitness and propriety, then it takes the necessary measures under supervisory law.

The notification about the intended establishment of a branch pursuant to Article 21 para. 1 VAG 2016 is to be submitted via the Incoming Platform. The necessary form to be used is made available on the Incoming Platform and which is intended to ensure efficient execution. The information and documentation that must also be submitted (e.g. business plan or the curriculum vitae of the authorised agent) are described in greater detail in this form.

The notification about the intended commencement of the provision of services pursuant to Article 23 para. 1 VAG 2016 is to be submitted via the Incoming Platform. The necessary form to be used is made available on the Incoming Platform and which is intended to ensure efficient execution.

Particularly material provisions in conjunction with cross-border activities within the EEA are explained here. The competent court decided which provision are actually applicable.
Information about Mandatory Provisions in Austrian Law (Format: pdf, Size: 268,9 KB, Language: English)

A (temporary) transition period until 31.12.2020 began with the withdrawal of the United Kingdom from the European Union (Brexit). Until the end of this transition period there are no changes for undertakings, investors and customers in the European Union (EU) and the United Kingdom (UK). Since the deadline for extending the transition period expired on 30.6.2020 without an extension being sought, the European Commission published Notices to Stakeholders in the financial sector on 14.7.2020, in which it reminds them in the context of the negotiations between the EU and the UK on their post-Brexit relationship about preparations for the end of the transition period after the UK ’s withdrawal.

Further information can be found on the European Commission Website in the section about Getting ready for the end of the transition period. Reference is also made to the EIOPA Recommendations for the insurance sector in light of the United Kingdom withdrawing from the European Union dated 14.06.2019 EIOPA-BoS-19/040.

Further Information can be found on the website of Bank of England and on the website of Financial Conduct Authority (FCA).

EIOPA urges the insurance sector to finalise preparations and implement suitable and realistic contingency plans in advance of the end of the UK transition period (Read more).

The unrestricted access for British undertakings to the Austrian market by way of the freedom to provide services or the freedom of establishment ended on 31 December 2020.

Regarding the legal basis from 1 January 2021, we refer to the EU / UK Trade and Cooperation Agreement (see in particular Articles SERVIN.5.38 to 5.42 as well as Article FINPROV. 11 (2) of the Agreement).

EIOPA  published a Brexit Consumer Guide
Consumer guide: What should you do if you have a life insurance policy or pension from the UK?

Further information

Law

Insurance Supervision Act 2016 (VAG 2016; Versicherungsaufsichtsgesetz 2016)

Information

Information for licence applicants

Information about mandatory provisions in Austrian Law can be found under Supervisory disclosure (National provisions for the protection of the general good)