EUROSYSTEM EXECUTIVE COMMITTEE ACT NO 86/

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1 EXECUTIVE COMMITTEE ACT NO 86/ Subject: Regulation of Conduct of (Re)Ιnsurance Intermediaries OF THE BANK OF GREECE having regard to: a) Article 55A of the Statute of the Bank of Greece, as currently in force; b) Law 4364/2016 (Government Gazette A 13) on Adaptation of Greek law to Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II); Articles 2 and 8 of Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 in respect of the powers of the European Insurance and Occupational Pensions Authority (hereinafter EIOPA) and the European Securities and Markets Authority; and Article 4 of Directive 2011/89/EU of the European Parliament and of the Council of 16 November 2011 as regards the supplementary supervision of financial entities in a financial conglomerate; and relevant provisions of the private insurance law, and other provisions, in particular Article 3 thereof. c) Law 1569/1985 (Government Gazette A 183) on Private insurance contract mediation, establishment of a body of traffic accident specialists, operation of an international insurance office and other provisions, as currently in force, and in particular Article 21(1) and (21A) thereof; d) Law 2496/1997 (Government Gazette Α 87) on Insurance contract, amendments to law on private insurance and other provisions ; e) Presidential Decree 190/2006 (Government Gazette Α 196) on Adaptation of Greek law to Directive 2002/92/EC of the European Parliament and of the Council on insurance mediation (L 9/ ) ; f) Decision No. Κ3-8010/2007 issued by the Deputy Minister of Development (Government Gazette Β 1600) on Determining the required prerequisites-tests that demonstrate the experience, skills and general business and professional knowledge of the intermediaries in Insurance ; g) Credit and Insurance Committee decision No. 40/6/ (Government Gazette Β 1780) on Amendment of Decision No. K3-8010/ (Government Gazette B 1600/ ) issued by the

2 Minister of Development on the registration of coordinating insurance advisors with the Chamber of Commerce ; h) Executive Committee Act No 16/ (Government Gazette B 1257) on Training and certification of the knowledge of (Re)Insurance Intermediaries and Executive Committee Act No 46/ (Government Gazette B 3510) on Amendment of the provisions of Executive Committee Act No 16/ (Government Gazette B 1257) with respect to the tests to certify the knowledge of (Re)Insurance Intermediaries ; i) Executive Committee Act No 31/ (Government Gazette B 2556) on Regulation of Conduct of (Re)Insurance Intermediaries ; j) Executive Committee Act No 45/ (Government Gazette B 3350) on Retraining and recertification of the knowledge of (Re)Insurance intermediaries ; and k) the fact that no expenditure shall be incurred by the Government Budget as a result of the provisions of the this Act, H E R E B Y D E C I D E S to lay down the framework of principles and rules of the business conduct of insurance and reinsurance intermediaries with respect to their dealings with the consumers of insurance products, insurance and reinsurance undertakings, and between insurance and reinsurance intermediaries, as follows: CHAPTER Ι GENERAL PROVISIONS The provisions herein shall apply to: Article 1 Scope a) The natural and legal persons who carry out (re)insurance mediation activities in accordance with the provisions of Article 2(3) and (7) of Presidential Decree 190/2006, as currently in force, provided that they operate in Greek territory, irrespective of their country of origin or establishment. Specific reference to Law 1569/86, as currently in force, is made where required. 2

3 b) The Undertakings set out in Article 2(1b) herein are required to particularly comply with par. 5-8 of Article 8 herein when they make direct sales. Article 2 Purpose 1. The purpose of this Act is to lay down the framework of principles and rules for the proper conduct of the business of (re)insurance mediation and the transparency in the dealings of the persons referred to in Article 1 herein with the: a) insurance receivers, insured and beneficiaries of insurance services and indemnity; b) insurance undertakings that legally conduct insurance business in Greece in accordance with Article 3(1), (3) and (11) of Law 4364/2016, insurance undertakings that have their registered office in another EU/EEA Member State and operate in Greece either under the freedom to provide services or through a branch (hereinafter Undertakings ), and reinsurance undertakings that legally conduct reinsurance business in Greece in accordance with Article 3(4), (6) and (11) of the same Law; and c) undertakings providing insurance and reinsurance mediation. 2. In particular, the purpose is to introduce standards of conduct and for the quality of services offered by the persons referred to in Article 1 herein, and lay down the rules governing their activity, as part of the laws and regulations currently in force, in order to ensure that they: a) exercise honesty, lawfulness, due care, and diligence in the dealings with the insurance receivers, insured and beneficiaries of insurance services and indemnity, as well as with the Undertakings and reinsurance undertakings or undertakings providing insurance and reinsurance mediation with which they are contracted and cooperate; b) provide services to all insurance receivers, insured and beneficiaries of insurance services and indemnity in good faith, objectively and impartially; c) adopt and use accurate information mechanisms intending to provide quality of service; 3

4 d) do not unnecessarily delay the handling of complaints or disputes that may arise from the conduct of their business activity; e) safeguard healthy competition between the persons referred to in Article 1 herein to the extent that it involves insurance activities between the Undertakings and reinsurance undertakings. Article 3 Definitions 1. Conflict of interest means one or more of the following circumstances, namely: a) the Insurance Intermediary may benefit financially or avoid a financial loss to the detriment of the Customer; b) there is a conflict of interest between the Insurance Intermediary and the Customer as to the conclusion or outcome of an insurance contract; c) the Insurance Intermediary has a financial or other motive to favour the interests of a Customer to the detriment of another Customer s interest; and d) the Insurance Intermediary receives or shall receive from a person other than the Customer a consideration related to the insurance provided to the Customer in the form of money, goods or services, beyond the customary commission or fee. 2. Customer means the insurance receiver, insured, and beneficiary of insurance service and indemnity in accordance with the current laws, and any person who becomes a recipient of any promotion of insurance and reinsurance products in any manner whatsoever; 3. Insurance means the conduct of business in the classes set out in Articles 4 and 5 of Law 4364/2016, as currently in force; 4. Insurance intermediaries means the natural and legal persons who carry out the activity set out in Article 2(3) and (7) of Presidential Decree 190/2006, as currently in force; 5. Insurance mediation means the activity set out in Article 2(3) and (7) of Presidential Decree 190/2006, as currently in force; 6. Insurance Premium Collection Agent for the purposes of this Act means every Insurance Intermediary within the meaning of Article 146(1) of Law 4364/2016, as currently in force; 4

5 7. Overriding commission means any acquisition cost, direct or indirect, the amount of which is directly related to the insurance premium or commissions, but is not part of the insurance premium. 8. Reinsurance means the activity set out in Article 3(7) of Law 4364/2016, as currently in force; 9. Reinsurance Intermediaries means the natural and legal persons who carry out the activity set out in Article 2(4) of Presidential Decree 190/2006, as currently in force; 10. Reinsurance mediation means the activity set out in Article 2(4) of Presidential Decree 190/2006, as currently in force; 11. Services means those set out in Article 2 of Presidential Decree 190/2006. CHAPTER ΙΙ RULES OF CONDUCT Article 4 General Principles and Rules of Conduct 1. The (Re)Insurance Intermediaries while carrying out their activity shall: a) exercise honesty, lawfulness, due care, and diligence in the dealings with the Customers, Undertakings and reinsurance undertakings; b) provide services to their Customers in good faith, objectively and impartially; c) create, adopt and use accurate information mechanisms intending to provide quality of service; d) handle forthwith any Customer complaints; e) effectively adopt measures to manage the conflict of interests; f) safeguard healthy competition among (Re)Insurance Intermediaries; and g) properly organise the information and data they use and which they must maintain continuously and for an adequate period of time in order to carry out the activity of (re)insurance mediation, at least in accordance with Article 6 herein. 5

6 2. The (Re)Insurance Intermediaries shall not contractually limit their obligations arising hereunder. 3. For legal persons, in particular, the adherence of all provisions herein shall be the several responsibility of each member of the (Re)Insurance Intermediaries management body. 4. The (Re)Insurance Intermediaries shall abide by the obligations herein not only precontractually, but every time they communicate with the Customer, either during the effective term of the insurance contract or upon its termination, and certainly in view of any change in the individual terms and conditions or change of the insurance product or Undertaking. 5. The (Re)Insurance Intermediaries shall only promote products of Undertakings and reinsurance undertakings that legally operate in Greece. 6. The (Re)Insurance Intermediaries shall only cooperate with other (Re)Insurance Intermediaries registered in a Register set out in Directive 2002/92/EC of any country in the European Union and European Economic Area or in a relevant register of a third (non-eu/eea) country. 7. Insurance Intermediary, who is not properly certified, as set out in the relevant decision of Bank of Greece that is applicable at the time, shall be prohibited from selling unit-linked insurance products (Class III, Article 5 of Law 4364/2016). 8. The personal information of any nature, sensitive personal data, and financial details and assets of the Customer, of which the Insurance Intermediary and his employees acquire knowledge and possession, are used exclusively for providing the services of insurance mediation, subject to the fulfilment of a legal obligation according to a specific legislative provision. 9. The (Re)Insurance Intermediaries shall carry out their activity without offending the honour and reputation of their colleagues, or causing disbelief in professional capability or reliability of the latter. In the event of a conflict among them, the (Re)Insurance Intermediaries shall exhaust all means of conciliation either directly or via their professional associations. 10. The (Re)Insurance Intermediaries shall avoid all acts that would cause disbelief in the reliability of the private insurance institution and seek to reinforce the trust therein. 6

7 Article 5 Standards of Information and Professional Conduct 1. The (Re)Insurance Intermediaries shall ensure that the information received by the Customer as part of the services provided to such Customer shall: a) be timely, complete, accurate, adequate, and appropriate; b) be provided by a person who is properly trained and has all certifications prescribed by law, and c) take into consideration the particular investment choices and insurance needs of the Customer, his financial options, as presented and stated by the Customer, and the ability to comprehend the specific terms of and risks entailed in the recommended insurance product at the time. 2. The Insurance Intermediaries shall take all appropriate measures to fulfil the obligation of providing information as set out in Article 11 of Presidential Decree 190/2006. In addition to the conditions set out in Article 12 of Presidential Decree 190/2006, the Insurance Intermediaries shall inform the Customer about whether the certification of their knowledge allows them to distribute unit-linked insurance products. 3. To fulfil the obligations of the paragraph above, the Insurance Intermediaries shall prepare certain informational leaflets for the Customer, in hard copy or in electronic format, that are different from any advertising or informational leaflets of the Undertakings, i.e. they shall be different in the body and colour and shall bear the company name and/or trade name and/or trade mark of such Insurance Intermediaries. The leaflets set out in the previous section shall bear in large dark font the title MANDATORY INFORMATION PROVIDED BY YOUR INSURANCE INTERMEDIARY IN ACCORDANCE WITH ARTICLE 11 OF PRESIDENTIAL DECREE 190/ Before concluding any contract, the Insurance Intermediaries shall request and record in a separate CUSTOMER NEEDS FORM the detailed information they receive from the Customer for clarifying the latter s demands and needs, inter alia, any investment ones, including the Customer s intention to assume relevant investment risk. This form shall include questions customised for the class and the complexity of the product distributed at the time. In particular, the Insurance Intermediaries shall collect information that help them assess the ability of the Customer to understand the terms of and risks entailed in the negotiated insurance contract so that they can provide appropriate advice that would serve the Customer's needs. 7

8 5. Based on the information provided by the Customer in writing, the Insurance Intermediaries shall recommend the product that would fit best the customer s needs and interest, taking into consideration all available products of the Undertaking, and clarify the reasons on which their recommendation and advice rely regarding a specific insurance product. These clarifications vary according to the complex nature of the recommended insurance contract. 6. The Insurance Intermediaries shall not encourage the Customer to surrender or terminate the insurance contract for reasons that are not associated with the Customer's interests and needs. 7. The Insurance Intermediaries shall forthwith execute the directions and guidance of the Undertakings for the description and explanation of the insurance product to the Customer and utilise all the printed material that they are provided by the Undertakings. In addition, they shall deliver the relevant material to the Customer and obtain a relevant written proof thereof from the Customer, a copy of which they shall transmit electronically to the Undertaking. 8. The Insurance Intermediaries shall: a) research and analyse the insurance needs of their Customers and recommend the appropriate insurance contracts taking into consideration their particular investment options and insurance needs, financial options, as they are presented by the Customers themselves, and the ability of the Customers to understand the specific terms of and risks entailed in the recommended insurance product at the time; b) explain the terms of the insurance contracts recommended, the rights and obligations of the Customers, and ensure that the information received by the Customers is timely, complete, accurate, adequate, and appropriate; c) stress to the Customers the consequences of an early termination or cancellation or surrender of their insurance policy, and each exclusion from the insurance coverage, as well as inform them of their obligation to prepay the insurance premiums and consequences of not paying the insurance premiums owed in a timely manner; d) inform the Customers about the rights to object, rescind and terminate their policy and provide them with the relevant forms with proof of receipt; and e) notify the Customers in the event that they no longer carry out their insurance mediation activity. 8

9 9. The Insurance Intermediaries shall be prohibited from employing unfair competition methods, unfair, illegal or misleading acts and practices. In particular, the Insurance Intermediaries shall be prohibited from: a) presenting an insurance policy in a misleading manner as to the applicable invoice of the Undertaking and terms and conditions of the insurance contract; b) promising the Customer coverage that is not included in the insurance product, which they promote, or concealing risks and/or costs borne by the Customer; c) creating, reproducing and disseminating statements and rumours that do not rely on officially published information and are made knowingly with respect to the financial condition of the Undertakings and/or preparation and quality of services provided by other Insurance Intermediaries, in general; d) offering discounts or special benefits aiming at the conclusion of an insurance policy; e) advertising discounts, bonuses and/or services that are not in line with the applicable invoices and terms and conditions of insurance policies; f) discriminating against Customers with the same prerequisites for insurance coverage; g) falsifying, altering or intervening in any manner whatsoever in the form or content of documents pertaining to the insurance contract, such as applications, insurance policies, and proof of insurance premium payments; h) collecting the insurance premium without taking the necessary actions to conclude an insurance contract; and i) delivering a non-genuine insurance policy to the Customer. CHAPTER IΙΙ ORGANISATION AND SUPPORT OF (RE)INSURANCE MEDIATION Article 6 Organisation of information provided and transaction data 1. Taking into consideration the particular characteristics of the specific category under which each (Re)Insurance Intermediary is registered in the Chamber of Commerce, but also the range and complexity of the contracts for which he 9

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11 mediates, each (Re)Insurance Intermediary shall maintain an accounting and computer setup, which shall be adequately staffed, and appropriate for the volume and type of his activities. 2. The obligation set out in the previous paragraph is specified in the following actions. The (Re)Insurance Intermediary shall: a) file and have the statements, which track the collection of insurance premiums, provided to him by the Undertakings and reinsurance undertakings, and the proof to repay the balances arising therefrom; b) have all informational leaflets of the affiliated Undertakings and reinsurance undertakings for distribution to Customers; c) keep the forms or documents of the affiliated Undertakings and reinsurance undertakings and use them for their intended purpose; and d) maintain the signed proofs of receipt set out in Article 8(1b) herein. Article 7 Other Organisation Standards 1. In the event that the (Re)Insurance Intermediaries are insurance and reinsurance brokers within the meaning of Article 15Α of Law 1569/1985, as currently in force, they shall adopt by written decision of the management body a business policy, which should at least safeguard their independence from other interests of primarily Undertakings or reinsurance undertakings. This decision shall be made available to the Bank of Greece upon request. 2. The (Re)Insurance Intermediaries shall ensure that all the persons directly involved in their insurance mediation work have their legal certificates of knowledge and regularly attend seminars related to their scope of business, the mandatory seminars for retraining and recertification of knowledge at a minimum in accordance with the applicable relevant decision of the Bank of Greece at the time. CHAPTER ΙV Article 8 Insurance Premium Collection Agents 1. In the event that the Undertaking provides authorization to and instructs the Insurance Intermediaries to collect the insurance premiums from the Customer on behalf of such Undertaking, and provided that the payment of insurance premiums 11

12 shall not be evidenced by other, equivalent instruments, such as bank account deposit slips and proof of payment made to the Hellenic Post, the Insurance Premium Collection Agents shall deliver to the Customer: a) either the legal proof of receipt for the payment of insurance premium by the Undertaking; b) or a signed receipt, which shall include the date when the receipt was issued and insurance premiums were paid, the complete tax and professional details of the collector, the company name of the Undertaking on behalf of which they collect the insurance premiums, the complete identification details of the Customer, the insurance premiums paid by the Customer, and a brief description of the insurance coverage for which the insurance premiums were paid. All of the above receipts shall be issued in triplicate; one copy shall be delivered to the Customer, the second copy shall be delivered to the Undertaking, and the third copy shall be kept by the Insurance Premium Collection Agents. 2. The Insurance Premium Collection Agents shall reimburse the insurance premiums to the Undertaking in accordance with Article 146(1) of Law 4364/ The collection of insurance premiums shall not be subauthorised by the Insurance Premium Collection Agents, unless the written consent of the Undertaking is obtained. CHAPTER V ADMINISTRATIVE SANCTIONS Article 9 Sanctions For each violation hereof, the Bank of Greece shall impose on the Insurance and Reinsurance Intermediaries or Insurance Premium Collection Agents sanctions in accordance with Article 256 of Law 4364/

13 CHAPTER VI TRANSITIONAL AND FINAL PROVISIONS Article 10 Effective Date - Final Provisions This Act shall enter into force on the date of its publication in the Government Gazette. Upon publication of this Act in the Government Gazette, Executive Committee Act No 31/2013 (Government Gazette B 2556) shall be revoked. Any reference to or citation in Articles 10 or 12 of Presidential Decree 298/1986 shall be considered as reference to Article 9 herein. This Act shall be published in the Government Gazette. The Deputy Governor The Deputy Governor The Governor Theodoros Mitrakos Ioannis Mourmouras Ioannis Stournaras True Copy Athens, Directorate of Private Insurance Supervision The Director [signed] Ioanna Seliniotaki 13