Authorisation of the activity of insurance and reinsurance companies

The commencement of insurance or reinsurance activities requires prior authorisation by the Magyar Nemzeti Bank.

Kulcsszavak: insurance company, reinsurance company, insurance activity, reinsurance activity, authorisation procedure, activity licence, MNB, Magyar Nemzeti Bank

Before insurance or reinsurance activities are commenced, the MNB’s authorisation for the foundation of the insurance or reinsurance company must first be obtained. The territorial scope of the activity licence issued by the MNB covers all Member States, and allows the insurance or reinsurance company to perform its activities – in the framework of cross-border services or via branch offices – in the territory of any Member State.

Within ninety days of the receipt of the MNB’s resolution authorising the foundation, the insurer or reinsurer company is required to submit to the MNB an application for the authorisation of the commencement of insurance or reinsurance activities.

Use of the Hungarian language is mandatory during the MNB activity authorisation procedure; the customer is required to provide certified Hungarian translations of all documents.

Applications for the authorisation of insurance or reinsurance activities and the relevant attachments must be submitted by economic operators acting as customers or their legal representatives through the MNB’s ‘ERA’ system (Electronic System for Receiving Authenticated Data). Detailed information on e-administration and on the substantive and formal requirements of electronic documents can be found on the MNB’s website under the following link:

https://www.mnb.hu/letoltes/tajekoztatas-az-e-ugyintezesrol-az-mnb-elotti-engedelyezesi-eljarasokban-1.pdf

If the application for the activity licence is not submitted by the legal deadline (i.e. within ninety days after the receipt of the MNB’s resolution authorising the foundation), the MNB will withdraw the foundation licence.

Engagement in insurance or reinsurance activities without authorisation constitutes a criminal offence, and the MNB may commence a market surveillance procedure if it suspects engagement in unauthorised financial activities.

If the MNB finds that an activity is performed without authorisation, it will

a) prohibit the activity,

b) initiate criminal proceedings if, in its opinion, a criminal offence is involved under the Act on the Criminal Code,

c) apply measures or exceptional measures, and/or

d) impose a market surveillance fine.

If the application for the activity licence is not submitted by the legal deadline (i.e. within ninety days after the receipt of the MNB’s resolution authorising the foundation), the MNB will withdraw the foundation licence.

The administrative time limit is three months starting from the working day following receipt of the application by the MNB.

If the application does not comply with the statutory requirements or it is deemed necessary for ascertaining the relevant facts of the case, the MNB will advise the applicant customer within forty-five days to remedy the deficiencies, also indicating the legal consequences of non-compliance. The MNB is entitled to repeatedly advise the applicant to remedy the deficiencies during the procedure. If the MNB has advised the applicant to remedy the deficiencies, the administrative time limit will be calculated from the day on which the deficiencies are remedied in full.

A detailed guide to authorisation of the commencement of insurance or reinsurance activities is available at: https://www.mnb.hu/letoltes/3-1-2-1-1-biztositasi-vagy-viszontbiztositasi-tevekenyseg-megkezdesenek-engedelyezese.pdf

An FAQ (frequently asked questions and answers) page about the authorisation procedure of insurance or reinsurance activities can be accessed at the following link: https://www.mnb.hu/letoltes/3-1-2-2-1-gyakori-kerdesek-es-valaszok-a-biztositasi-vagy-viszontbiztositasi-tev-megkezdesenek-eng-kapcsolatban.pdf

Information about the policies to be attached to the application for the authorisation of insurance or reinsurance activities is available under the following link:    https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/szektorok/biztositasi-piac/biztositok-viszontbiztositok/tevekenyseg-engedelyezese/szabalyzatokkal-kapcsolatos-informaciok, while frequently asked questions and answers about the policies can be accessed at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/szektorok/biztositasi-piac/biztositok-viszontbiztositok/tevekenyseg-engedelyezese/szabalyzatokkal-kapcsolatos-gyakori-kerdesek-es-valaszok.

A guide to the internal rules and regulations to be prepared in accordance with legislation on the prevention and combating of money laundering and terrorist financing is available at: https://www.mnb.hu/felugyelet/szabalyozas/penzmosas-ellen/szabalyzatok-segedletek/segedlet-a-belso-szabalyzat-elkeszitesehez

When preparing the internal risk assessment, the applicant is required to take into consideration the result of the national risk assessment, in relation to which further information is available on the MNB’s website at: https://www.mnb.hu/felugyelet/szabalyozas/penzmosas-ellen/fontos-informaciok-dokumentumok

The activity authorisation procedure is subject to an administrative service fee of HUF 1,300,000 for insurance or reinsurance joint-stock companies and cooperative societies and HUF 700,000 for mutual insurance associations. The document confirming the payment must be attached to the application for the commencement of the procedure.

Additional information about the administrative service fee is available under the following link:

https://www.mnb.hu/letoltes/tajekoztatas-a-magyar-nemzeti-bank-altal-egyes-engedelyezesi-es-nyilvantartasba-veteli-eljarasokban-alkalmazott-igazgatasi-szolgaltatasi-dijrol.pdf

Magyar Nemzeti Bank, Insurance and Pension Funds Licensing and Legal Enforcement Department

The MNB’s decision (resolution or ruling) may not be appealed; however, customers whose rights or legitimate interests are directly affected by the decision may initiate administrative court proceedings within 30 (thirty) days of the disclosure of the resolution or ruling on the grounds of infringement, by submitting an application initiating proceedings to the Budapest-Capital Regional Court.

Legal representation is mandatory in the court proceedings. The application must be addressed to the Budapest-Capital Regional Court, and submitted electronically through the MNB’s form submission support service.

(The form submission support service can be accessed at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/hatarozatok-es-vegzesek-keresese).

The submission of the application has no suspensive effect on the enforceability of the resolution or ruling, but the customer may request interim relief. As a general rule, the court rules in the proceedings without holding a hearing; however, the customer may request a hearing in the application. If a hearing is not requested, a hearing may not be requested later on during the appeal procedure.

An application for remedy may be lodged by any party who goes over a time limit or misses a legal deadline during the procedure for reasons beyond their control.

Additional general information about the authorisation procedure is available at https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/tajekoztatok

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