What is property and casualty insurance
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I. Establishment according to the Stock Corporation Act
1. Submission of the notarial record of the establishment (Sections 23 et seq. Of the AktG)
- Articles of Association (Sections 23 - 27 AktG; see also below under II.3.)
- First Supervisory Board (§§ 30 Paragraphs 1 - 3; 31 AktG; see also III.1.a) aa) below)
- First auditor (Section 30 (1) AktG)
2. Submission of the minutes of the first supervisory board meeting with the appointment of the management board (Section 30 (4) AktG; see also III.1.a below) aa)
3. Submission of the formation report (Section 32 AktG)
4. Submission of the founding audit report by the management board and the supervisory board (Section 33 (1), Section 34 AktG)
5. If necessary, submission of the report of a court-appointed formation auditor (Section 33 Paragraphs 2-5, Sections 34, 35 AktG)
6. Submission of a certified extract from the commercial register
The documents must be submitted as a copy or in a notarized form to the Federal Financial Supervisory Authority (BaFin).
II. Business plan (Section 9 Paragraphs 1, 2, 3 VAG)
1. Establishment of the company (Section 9 (1) 2nd half-sentence VAG)
Information about the organizational structure of the company (e.g. in the form of an organizational chart)
2. Area of the intended business operation (Section 9 (1) 2nd half-sentence VAG)
Information on the registered office and branches of the company as well as information on the location of the insured risks (cf. in this respect section 57 (3) sentence 2 VAG) and thus on the area of the intended business operations.
If it is also intended to insure risks located abroad, it should already be explained at this point whether and, if so, in which countries it is planned to set up branches (for the term `` branch office '' see § 57 (2) VAG) and in which states this is not provided (for the concept of the provision of services, see Section 57 (3) sentence 1 VAG).
For the intended business operations in another member state of the European Union or in a contracting state of the Agreement on the European Economic Area (member or contracting state within the meaning of Section 7 No. 22 VAG), the following is referred to in Section 58 VAG (for the establishment of a branch) and the information / documents specified in Section 59 of the VAG (for the commencement of the provision of services), which should already be sent as part of the licensing procedure. For the intended business operations in so-called third countries, i.e. those that are not member or contracting states within the meaning of Section 7 No. 22 VAG, the information / documents specified in Section 12 Paragraph 3 VAG should also be submitted as part of the licensing procedure .
3. Articles of Association (Section 9 Paragraph 2 No. 1 VAG)
Application for approval for the articles of association, insofar as it does not relate to general insurance conditions (in this context, please also pay particular attention to Sections 15 (1), 33 (1) VAG; Sections 23 (3) - 5, 25 - 27, 95, 108 para. 2 and 4, 109 para. 3, 110 para. 3, 179 para. 1 sentence 2 AktG; see also GBBAV 1978 p. 26 section 130, the content of which is subject to the application of § 188 VAGn. F. (continues to apply as an equivalent standard to § 34 VAGa.F.).
The notarized minutes of the general meeting, on which the amendments to the articles of association necessary for the operation of the insurance business were resolved, must be attached to the application as a copy or in a notarized form
A clearance certificate from the Chamber of Industry and Commerce and, if applicable, the judge of the commercial register must be submitted for the company.
The permit is valid in accordance with Section 10 Paragraph 1 Clause 2 in conjunction with Section 7 No. 22 VAG for the territory of all EU member states or EEA contracting states. An expansion of the business area to these states within the scope of the freedom of establishment and freedom to provide services is only permitted in accordance with §§ 57 - 59 VAG (separate information available on request).
4. Insurance classes (Section 9 (2) No. 2 VAG)
Information on which insurance classes are operated and which risks of an insurance class are to be covered (Section 9 (2) No. 2 1st half-sentence VAG, also as part of the purpose of the company within the meaning of § 9 (1) 2nd half-sentence VAG; for classification For the risks according to insurance classes, see Appendix 1 to the VAG; for the classification of the risks according to insurance classes in the context of accounting: see Appendix 1 Section C of the Ordinance on Reporting by Insurance Companies to the Federal Financial Supervisory Authority (Insurance Reporting Ordinance - BerVersV) and Prölss, VAG commentary on Section 9 old version), stating the name and subject of the insurance cover (ie what should be insured against what, e.g. household effects against fire and elementary elements). In addition, a further part of the specification of the purpose of the company within the meaning of Section 9 (1) 2nd half-sentence VAGgf. to be notified if the insurance business is to be limited to certain groups of people, provided this is permitted under the AGG.
5. Reinsurance (Section 9 Paragraph 2 No. 3 VAG)
Presentation of the main features of reinsurance and retrocession, taking into account each individual type of insurance (Section 9 (2) No. 2 1st half-sentence VAG), as well as a schedule of contracts for each envisaged reinsurance contract.
6. Own funds (Section 9 Paragraph 2 No. 4 in conjunction with (in conjunction with) Section 9 Paragraph 3 VAG)
a) At the time of approval, the primary insurance company to be approved must already have eligible own funds at least in the amount of the solvency capital requirement resulting from the total expected scope of business (Section 9 (3) No. 4 VAG). The basic own funds according to § 89 Abs. 3 VAGi.V.m. Section 95 VAG must at least be measured in such a way that eligible basic own funds are available in the amount of the absolute lower limit of the minimum capital requirement (Section 9 (2) No. 4 VAG).
b) The amount of the minimum capital requirement results from § 122 VAG.
The absolute lower limit of the minimum capital requirement is EUR 2.5 million or EUR 3.7 million if one of the divisions No. 10 to 15 of Annex 1 to the VAG is to be operated.
The required solvency capital requirement is to be calculated on the basis of the submitted estimates of the balance sheets and profit and loss accounts for the first three financial years (see below II.9.) In accordance with the provisions of the VAG (§ 96 et seq. VAG). The higher value from the minimum capital requirement and the solvency capital requirement is decisive for the determination of the minimum amount of eligible equity capital to be held.
In the interests of a solid initial capitalization of the insurance company to be approved, BaFin attaches importance to the fact that the own funds not only reach the legal minimum level.
If the portfolio is to be taken over, the insurance portfolios to be taken over must be taken into account in the above calculations.
c) An organization fund must be set up to cover the expenses for setting up the administration and the network of representatives (Section 9 (2) No. 5 VAG, cf. II.7 below).
d) The payment of the funds required to ensure the provision of the primary insurance company with sufficient eligible own funds and the payment of the organization fund to an account of the company must be evidenced by the confirmation of the account-keeping institution, after which the paid-in amount is finally at the free disposal of the Board of Directors (see section 37 (1) sentence 2 AktG).
e) If the company is subject to additional supervision due to its affiliation to an insurance group (§ 245 et seq. VAG) or a financial conglomerate (according to FKAG), the adequacy of the equity base is also to be considered at group level (§ 250 VAG) or at financial conglomerate level (§§ 17 , 18 FKAG).
7. Organization fund (Section 9 Paragraph 2 No. 5 1st half-sentence VAG)
The company has to prove that the funds (organization fund) required to set up the administration and the network of representatives are available (Section 9 (2) No. 5 1st half-sentence VAG).
The expenses for setting up the administration and the network of representatives are to be estimated. The assumptions on which the estimate is based must be presented, such as the planned administrative structure, the distribution channel, special groups of policyholders, portfolios to be taken over and other essential characteristics.
The information in the estimate must be adequately presented and made credible with regard to the scope and amount of the individual expenses.
The necessary expenses usually include the expenses for the approval and the development of the company (excluding commission expenses and other ongoing expenses for insurance operations, as these are included in the estimate of the profit and loss accounts for the first three financial years according to § 9 Paragraph 3 No. 1 VAG (see below II.9.) Are to be recorded).
Admission expenses include, for example, consulting and notary fees. Registration and publication costs as well as the associated notary fees, on the other hand, are part of the formation costs, for the determination of which Section 26 AktG must be observed.
The expenses for setting up the company include, for example, expenses for operating and office equipment, organizational expenses for recording and processing business transactions through to accounting (this also includes expenses for the procurement of the necessary specialist literature and legal texts, as well as consulting costs), expenses for internal and external staff (this also includes training and retraining costs for existing workers), as well as expenses for the operating and office equipment of the (planned) offices.
The estimate of the above-mentioned expenses should not only include the expenses of the year of registration, but also those of the years of establishment that exceed the other ongoing expenses for insurance operations - as they are in the estimate according to Section 9 (3) No. 1 VAG (see below II .9.) Are recorded - go out.
If there are no verifiable extraordinary circumstances, experience has shown that, depending on the scope of the intended business operations, minimum amounts between
500,000 and 1.5 million euros
to go out.
The full amount of the organization fund is to be made available "with the express waiver of repayment, profit sharing and interest". A declaration by the subscribers to the organization fund must be submitted to BaFin. It is advisable to include this declaration in the deed of incorporation (see I.1 above).
The payment of the organization fund is verified to BaFin as well as the payment of the funds required to meet the capital adequacy requirement (see above II.6.).
8. Assistance insurance (Section 9 (2) No. 5 2nd half-sentence VAG)
Assistance insurance (No. 18 of Appendix 1 to the VAG): information on the means that the company has to meet the promised assistance (Section 9 (2) No. 5 2nd half-sentence VAG). The information should contain the financial and organizational resources that are used to provide the support services.
9. Estimates for the first three financial years (Section 9 (3) VAG)
For the first three financial years, estimates of the balance sheet and the income statement and, based on this, estimates of the future solvency capital and minimum capital requirements must be submitted. In the estimates for the profit and loss account, the commission expenses and other ongoing expenses for insurance operations, the expected premiums, the expected expenses for insurance claims and the expected liquidity situation must be shown (Section 9 (3) VAG). The reinsurers' shares must be deducted from the expenses and income initially calculated as gross. For the estimates of the solvency capital and the minimum capital requirement, the calculation method from which the estimates are derived must be specified.
The estimates should be made in the form of a (abbreviated) profit and loss account for each line of insurance. The assumptions on which the estimates are based must be presented.
If the estimates show that expenses that cannot be covered by the organization fund lead to annual deficits, the company must be provided with additional financial resources prior to approval, which at least prevent the eligible equity capital from falling below the (estimated) solvency capital requirement.
III. Other admission requirements
The following must also be submitted:
1. Information on the type and scope of the business organization according to Part 2, Chapter 1, Section 3 of the ISA.
This includes the following aspects:
a) Personnel (Section 9 (4) No. 1 lit. a) VAG)
aa) The board of directors (managing directors), other persons who actually manage the company, members of the supervisory board, responsible actuaries and other persons who are responsible for other key tasks
The board of directors must consist of at least two members (§§ 33 Paragraph 1, 188 Paragraph 1 Sentence 1 VAG), each of whom must be qualified (reliable and technically suitable) in accordance with the requirements of § 24 Paragraph 1 VAG. In addition to the management board, other persons who actually manage the company (see Section 24 (2) sentence 1 VAG), the members of the supervisory board, the actuary responsible (in accident insurance with reimbursement of the premium; for the calculation of the actuarial reserve for pensions be reliable and professionally qualified in general liability insurance, motor vehicle liability insurance, motor vehicle accident insurance and general accident insurance without reimbursement of the premium; in non-substitutive health insurance operated in the manner of life insurance) as well as other people who perform other key tasks (Section 24 (1) or Section 141 (1) sentences 2 to 4 VAG in conjunction with Section 161 (1), Section 162, Section 156 (1) and Section 147 VAG)).
Pursuant to Section 9 (4) No. 1 lit. a) VAG, information that is essential for assessing reliability and professional suitability must be submitted for all of the named persons. For people who have other key tasks - this includes the four key functions required by law (the independent risk control function in accordance with Section 26 VAG, the compliance function in accordance with Section 29 VAG, the internal audit in accordance with Section 30 VAG and the actuarial function in accordance with Section 31 VAG) - perceive, this only applies to the persons responsible. In addition, the companies can decide for themselves whether they have other key tasks. These can be areas to be identified by the companies that are of considerable importance for the company's business operations. If this is the case, the above information must be submitted for the responsible person. For the individual information to be provided in this context and documents that are required to be submitted, see the relevant information sheets on the professional suitability and reliability of the individual named persons on the BaFin website.
With regard to the admissibility of so-called multiple managerial mandates, see Section 24 (3) VAG: Upon application, BaFin can therefore permit more than two managerial mandates of a person at insurance companies, pension funds, insurance holding companies or insurance special-purpose vehicles if these are companies with the same insurance or group of companies (for details, see the information sheet on the professional suitability and reliability of managers in accordance with VAG on the BaFin website).
With regard to the admissibility of so-called multiple supervisory board mandates and the mandate limitations, see in particular Section 24 (4) VAG and Section 100 (2) AktG (for details, see the information sheet on the professional suitability and reliability of members of administrative and supervisory bodies on the BaFin website) .
bb) Other competent staff
Other competent staff (office and field service) must be available. BaFin must be given information about this (number and qualification). This requirement ultimately results from the obligation to estimate the expenses required for setting up the administration and the network of representatives in accordance with Section 9 (2) No. 5 1st, 2nd half-sentence VAG, including the expenses for internal and external staff (including the training and retraining costs of existing workers) belong (see in this respect also above under point II.7).
b) Company contracts (Section 9 (4) No. 1 lit.b) VAG)
Application for approval for the company contracts referred to in Sections 291, 292 AktG within the meaning of Section 9 (4) no. 1 lit.b) VAG (see also Section 12 (1) sentence 1 3rd variant VAG; saVerBAV 2001, 118: certain the insurance company's own decision-making area must remain).
c) Contracts on the outsourcing of important functions or activities (Section 9 (4) No. 1 lit. c) VAG)
Submission of contracts on the outsourcing of important functions or activities in accordance with Section 9 (4) No. 1 lit. c) VAG. For an analysis of the question of when important functions or activities are being outsourced, see BaFin's interpretative decision on outsourcing by insurance companies of December 21, 2015.
With regard to the main features of the content of the contracts, reference is made to the provisions of Section 32 Paragraph 2 Clause 2, Paragraph 4 VAG and Article 274 Number 4 of the Commission Delegated Regulation (EU) 2015/35 of 10.10.2014 (DV). Further details of the content of the contracts should be agreed with the responsible BaFin supervisor.
d) Business organization in the broader sense
Information on the general requirements for business organization (Section 23 VAG), remuneration (Section 25 VAG), risk management (Section 26 VAG), the company's own risk and solvency assessment (Section 27 VAG), external ratings (Section 28 VAG) , the internal control system (section 29 VAG) and internal auditing (section 30 VAG).
2. Information on significant holdings (Section 9 (4) No. 2 VAG)
If significant participations (Section 7 No. 3 VAG) are held in the insurance company, the information must be provided in accordance with Section 9 Paragraph 4 No. 2 VAG. In the case of the information and documents that are required for the assessment of the requirements specified in Section 9 (4) No. 2 lit.b) in conjunction with Section 16 VAG, an orientation to the requirements of Section 9 InhKontrollV is indicated. At the request of BaFin, the documents mentioned in R 4/98 Section I. Clauses 2 and 3 (VerBAV 1998, 203 f.) Must also be submitted.
3. Close relationship (Section 9 (4) No. 3 VAG)
Any existing close connections within the meaning of Section 7 No. 7 VAG with other natural persons or companies must be indicated (Section 9 Paragraph 4 No. 3 VAG).
4. Compulsory insurance conditions (Section 9 (4) No. 4 VAG)
Submission of compulsory insurance conditions, in particular for motor vehicle liability insurance. An overview of existing compulsory insurance can be found on the BaFin website.
5. Claims settlement officer (Section 9 (4) No. 6 VAG)
If the motor liability insurance (No. 10 lit. a) of Annex 1 to the VAG) is to be operated, the names and addresses of the claims settlement officers must be communicated in accordance with Section 163 VAG (Section 9 (4) No. 6 VAG).
6. Motor vehicle liability insurance
Insofar as the motor vehicle liability insurance is to be operated, in addition to the compulsory insurance conditions, applications for membership of the Deutsches Büro Grüne Karte eV and Verkehrsopferhilfe eV must be submitted or proof of the respective (contribution) payment must be provided (see. 13 para. 1 sentence 5 PflVG).
IV. Special features for small insurance companies within the meaning of Section 211 VAG
If the newly licensed insurance company is a so-called small insurance company within the meaning of Section 211 VAG, the following special features apply:
1. Special features according to Section 212 Paragraph 3 Nos. 1 and 3 VAG
a) For the documents to be submitted for the business plan within the meaning of Section 9 (2) No. 4 VAG, information on the equity components pursuant to Section 214 VAG must be submitted in accordance with Section 212 (3) No. 1 VAG, which represents the absolute limit of the minimum capital requirement. Solvency and minimum capital requirements for small insurance companies within the meaning of Section 211 VAG are determined by the provisions of Section 213 VAG and the ordinance issued under Section 217 (1) No. 1 VAG.
b) The information on the type and scope of the business organization according to Part 2, Chapter 1, Section 3 of the VAG (see above under III.1. a) and d)) is only relevant to the managers, the members of the supervisory board and, if available to make the responsible actuary (Section 212 Paragraph 3 No. 3 VAG).
2. Documents to be provided for the assessment of the status of a small insurance company
In order to be able to take advantage of the simplifications mentioned under point 1, pursuant to Section 211 Paragraph 1 Clause 3 VAG for the supervisory review of whether the newly licensed insurance company is a small insurance company within the meaning of Section 211 VAG, the in the announcement of the BaFin on the "Procedure for the determination of small insurance companies within the meaning of Section 211 VAG in the version applicable from 01.01.2016 (VAG 2016)" to submit declarations or documents with the proviso that the information on gross premium income and of the gross technical provisions must relate to the next five years.
Pursuant to Section 211 (4) VAG, however, an insurance company which, according to the above declarations and documents, would be regarded as a small insurance company, cannot be treated as such on application.
Further technical information
1. Before establishing the company under stock corporation law, it is advisable to coordinate with BaFin, in particular on points II.3 (Articles of Association), II.4 (Insurance Sectors), II.6 (Own Funds), II.7 (Organization Fund), II.9 (Estimates for the first three financial years), III.1. a) and d) (personnel and business organization), III.2. (Holders of a significant interest) and IV. (Aspects related to the status of a small insurance company).
2. The competent registry judge should be asked in advance about the registrability of the articles of association, in particular the company name, and BaFin should be given his consent.
3. Regarding points III.1. b) (company contracts) and III.1. c) (Contracts for the outsourcing of important functions or activities) it is advisable to submit drafts for examination in good time.
4. In order to speed up the process, it is advantageous if all documents that are considered for a preliminary examination are presented in duplicate.
The documents can be submitted depending on the completion.
5. Costs of the admission process
According to the ordinance on the collection of fees and the apportionment of costs under the Financial Services Supervision Act (FinDAGKostV), BaFin charges a fee in accordance with Section 2 (1) in conjunction with the schedule of fees for Section 2 FinDAGKostV. The amount is based on Section 2 (1) in conjunction with the number. 6.2 FinDAGKostV and is therefore 10,000 EUR.
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