Insurance agent in the light of the Act on insurance intermediation

Dodano: 17-03-2016

Within the meaning of the provisions of the Act on insurance intermediation, an insurance agent shall be an entrepreneur performing agency acts under an agency contract, regulated by the provisions of the Civil Code, concluded with an insurance company and entered in the register of insurance agents.

An insurance agent acts on behalf and for the benefit of an insurance company. The insurance company shall grant a power of attorney to perform agency acts on its behalf to the insurance agent. The power of attorney shall be granted in a written form under pain of nullity. It shall include: (i) the scope of the insurance agent’s activities indicating the branch, class and types of insurance, (ii) the amount of the maximum insured sum for which the insurance agent may conclude a single insurance contract, (iii) the territorial scope of an insurance agent’s activities. The power of attorney shall not contain an authorization for granting subsequent powers of attorney.

The insurance agent may act exclusively for one insurance company (the so-called tied agent) or for two or more insurance companies. If the agent acts for two or more insurance companies in the scope of the same group of insurance (i.e. life or non-life), they are then called a multi-agent.

The insurance company is liable only for damage caused by the tied agent and only when such damage results from the tied agent’s agency activities performed for the benefit of the insurance company. It means that a party who suffered damage due to the tied agent’s activities may claim compensation for such damage directly from the insurance company. However, after compensating the party who suffered damage, the insurance company has theright of recourse to the tied agent.

What is significant is that the insurance company is not liable for damage caused by the multi-agent. A multi-agent themself shall be liable for damage caused in connection with the performance of such activities to a client and shall be subject to compulsory civil liability insurance.

An insurance agent acts in the name and on behalf of an insurance company performing agency acts consisting in: the soliciting of clients, carrying out work preparatory to the conclusion of insurance contracts, conclusion of insurance contracts and assisting in the administration and performance of insurance contracts, also in the event of a claim, as well as in the organization of and supervision over agency acts (the agency activity).

An insurance agent may perform the agency activity exclusively through natural persons performing agency acts, who meet the following conditions specified in the applicable provisions of the Act on insurance intermediation. Agency acts may be performed exclusively by a natural person who meets the following conditions jointly:

  1. possesses full legal capacity,
  2. has not been finally sentenced for the willful commission of an offence against: life and health, administration of justice, protection of information, credibility of documents, property, economic trading, trading in money and securities or for a fiscal offence,
  3. guarantees for due performance of agency activities,
  4. has at least secondary education,
  5. has passed an examination conducted by the insurance company.

Where an insurance agent is a legal person, the above requirements must also be met by at least half of the members of its management board.

The scope of the examination and the mode of conduct thereof is defined in detail in the Regulation on the examination. It covers both general issues within the insurance market and insurance law in Poland, and specific questions concerning insurance products offered by the insurance company. The first part of the examination includes general issues necessary to properly perform of agency activities (the minimum range of topics is provided in the Regulation on the examination). The second part includes the issues concerning the activities of the insurance company for which the agency activities will be performed (e.g. tariffs, premiums calculation, internal documents, policies sale and premiums settlements and general terms of insurance).

The examination shall be prepared by the insurance company and conducted before an examination commission including at least three members, appointed by the Management Board of the insurance company for which the agency acts shall be performed. The examination should have the form of a written or electronic test of single choice questions. In practice, it is acceptable by KNF (Polish Financial Supervision Authority), that the insurance company entrusts any other entity with invigilating the examination, provided that such entity possess all relevant knowledge and materials, enabling it to do so at the required level.

Due to the fact that KNF representatives are entitled to observe the examination, the insurance company is obliged to inform KNF of the date, venue and the composition of the examination commission (giving the exact dates, hours and addresses) no later than 14 days before the abovementioned dates. KNF shall also be informed of any changes in this respect.

The insurance company carrying out the examination, within 7 days from the announcement of its results, issues for each person who passed the examination a written certificate of passing the examination, or notifies in writing the person concerned of failing the exam, along with information on the number of points obtained.

It should be noted that previously there was one other obligatory condition to be met by persons applying to perform agency acts, namely they were obliged to undergo special training conducted by the insurance company. In August 2014 some legislative changes in the provisions regulating insurance agents came into force. The main change consisted in the elimination of mandatory training for candidates for insurance agents, conducted by insurance companies. Currently, the training for agents is voluntary. However, the amended Act still leaves the requirement to test the candidates’ knowledge in the form of an examination organized by the insurance company on behalf of which the future agent will perform agency activities. The amendment also abolished the obligation for insurance agents to undergo professional improvement training every 3 years.

Despite the voluntary character of the training, it should be stressed that in practice it is the only way to prepare insurance agents to properly perform agency acts, in particular within the scope of the activities of the insurance company for which the agency activities will be performed, such as specification of the insurance products offered, general terms of insurance, tariffs, methods of premiums calculation, internal documents, policies sale and premiums settlements, etc.

The practical process of obtaining the status of an insurance agent includes the time necessary to:

  1. undergo the training for the persons applying to perform agency acts, though not obligatory but in practice recommendable, organized by the insurance company, which enables them to know the product to be offered to clients,
  2. pass the examination organized by the insurance company,
  3. conclude an agency agreement by and between the agent and the insurance company, followed by granting a power of attorney for the agent,
  4. submit a request to register the agent in the insurance agents register run by KNF (on-line).

Registration of the insurance agent – practical issues

Insurance agents shall be entered in the insurance agents’ register, kept by KNF with the use of an electronic system called RAU on-line.

The registration of an insurance agent is the domain of the insurance company for which the insurance agent will be acting, regardless whether the agent was already registered by another insurance company. Yet, in practice it is common that an insurance company empowers the agent to complete the registration process by themself, as it requires solely the use of an electronic program (called DAPOS), previously made available (by providing an individual login and password) for insurance companies by KNF, under their written request (with the use of a special form made available by KNF on its website). The detailed procedure of registering insurance agents in the RAU on-line system is specified in details in the Regulation on the insurance agents register.

The insurance company shall submit, along with the necessary documents, the application for entry into the insurance agents register of an entity with which it has concluded an agency agreement, immediately after the conclusion of this agreement, but no later than within 14 days.  As already mentioned above, the application shall be submitted through the DAPOS program.

Therefore, the first step for the insurance company to establish its insurance agent in the territory of Poland shall be then submitting an application to KNF for granting access to the RAU on-line system. There is a special form provided by KNF on its website to be completed in paper form and sent to the relevant department by registered mail.

Apart from the data on the insurance company being the applicant, the application includes: (i) the name, date of birth and place of residence of the person who will be responsible in the insurance company for submitting applications for entry and requests for changes to the entry into the insurance agents register, (ii) and the address or e-mail address to which KNF shall send an individual login and password to access the RAU on-line system.

The application shall be signed according to the statutory representation of the insurance company and be accompanied by: (i) a document confirming that the person signing the application is an officer or a representative duly authorized to represent the insurance company (e.g. an up-to-date extract of the competent registration body), and (ii) a document authorizing one of the insurance company employees or representatives, indicated by name, to lodge an application(s) for an entry or a change of an entry into the insurance agents register as well as lodge statements and declarations attached to the applications (KNF does not require any special form thereof, in practice it is advisable to issue such a document, using company paper, with the exact wording defined above, duly signed and stamped with the company seal).

Simultaneously with the submission of an application for granting access to the RAU on-line system, the insurance company should also submit to KNF a request to add it to the DAPOS database.

All documents i.e. applications (forms), requests and attachments thereto submitted to KNF shall be drawn up in the Polish language, and in originals or certified copies (by a notary or an attorney at law, provided he/she has been granted a special proxy to act on behalf of an insurance company in proceedings before KNF). KNF does not accept copies of the documents. It does not accept either documents drawn up in any other language than Polish. Should the original documents submitted to KNF be drawn up in a foreign language (e.g. company’s report, official documents), it is indispensable to submit simultaneously a sworn translation thereof. Should the documents submitted be of a private character (e.g. agency agreement, document of power of attorney), it is accepted to execute such documents in bilingual versions, including the Polish, which enables the avoidance of additional costs of sworn translation.

Once access to the RAU on-line system is granted, the insurance company shall use the DAPOS program to submit the application for entry into the insurance agents register. Each application shall be made on the basis of the documents held by the insurance company which are as follows

  1. with respect to an insurance agent:
  1. a copy of the register of companies, issued no later than three months before the date of application for registration (if the insurance agent is not a natural person),
  2. the original or a certified copy of the policy by the insurance company, stating the conclusion of compulsory insurance of civil liability for the performance of the activities of the agency (in the case of multi-agents),
  3. power of attorney to perform agency activities on behalf of the insurance company;
  1. with respect to natural persons performing agency acts and the members of the management board of an agent being a legal person:
  1. information about the relevant person released from the National Criminal Register that a person has not been recorded in the Register, or a certificate of good conduct issued by the competent authority of another country to issue certificates of good conduct, not later than three months before the date of application for registration, evidence of a criminal record for defined offenses,
  2. a declaration of full legal capacity,
  3. a copy of evidence of formal educational requirements,
  4. the original or a copy of a certificate of passing the examination (previously also the certificate of completion of a training, currently not required)  

The application shall be supplemented by: (i) a statement made by the insurance company stating that the individuals who are to perform agency activities and members of the management board specified in the application satisfy the conditions laid down in the Act on insurance intermediation, (ii) a statement made by the insurance company that the application for registration has been prepared on the basis of the documents referred to in the Regulation on the insurance agents register and (iii) proof of payment of stamp duty due into a bank account of a competent tax authority i.e. the President of the Capital City of Warsaw (in the form of a PDF file, the stamp duty currently amounts to 110 PLN). KNF verifies the application for data validation. In case of any deficiencies or errors, the applicant is informed through the system and shall revise or complete the application. KNF is entitled to refuse registration if any of the statutory requirements are not met.

After effective registration, KNF shall immediately, but no later than within 14 days, notify the insurance company about the entry.

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