Komisja Nadzoru Finansowego (KNF) hereby reports that on 5 July 2018 the National Bank of Hungary (Magyar Nemzeti Bank) decided to temporarily suspend the sale of life insurance products offered in the territory of Hungary by the Slovak insurance undertaking NOVIS Poist’ovňa a.s.

The sale of the above-mentioned products was suspended by the National Bank of Hungary pursuant to the applicable domestic laws and to the provisions of Solvency II. The full text of the communication of the National Bank of Hungary on the suspension of sales of products offered by NOVIS Poist’ovňa a.s. is available (in English) at:
https://www.mnb.hu/en/pressroom/press-releases/press-releases-2018/mnb-suspends-the-sale-of-several-novis-insurance-products

The decision of the National Bank of Hungary to temporarily suspend the sale by NOVIS Poist’ovňa a.s. of unit-linked life insurance products in the territory of Hungary is a consequence of irregularities identified by the Hungarian supervisor in the area of performance of information obligations relating to insurance contracts, in particular with regard to the information on profitability of products and preservation of the premiums paid.

The KNF stresses that the temporary ban on the sale by NOVIS Poist’ovňa a.s. of unit-linked life insurance products applies exclusively to the territory of Hungary.

NOVIS Poist’ovňa a.s. operates in the territory of Poland under the freedom to provide services following approval by the National Bank of Slovakia (Národná banka Slovenska) and it is authorised to carry out cross-border sales of insurance products providing coverage of risks classified under classes 1, 3, 4 and 5 of Section I. The report on solvency and financial condition of NOVIS Poist’ovňa a.s (available on the website of NOVIS Poist’ovňa a.s.) shows that the said insurance undertaking started to sell its products in the territory of Poland in March 2017.

The KNF notes that NOVIS Poist’ovňa a.s. is not a KNF-supervised entity. The undertaking is supervised by the National Bankk of Slovakia.

The activities of NOVIS Poist’ovňa a.s. have been approved by the National Bank of Slovakia, which is responsible for prudential supervision of that undertaking. Although as part of its activities in Poland, NOVIS Poist’ovňa a.s. only provides cross-border services, the UE law allows the KNF to undertake, in special cases, measures to remove any irregularities which might threaten the security of the domestic insurance market or be detrimental to the interests of clients.

The KNF works closely with EIOPA and insurance supervisors in the EU Member States in which products of NOVIS Poist’ovňa a.s. are distributed.

The KNF would like to point out that pursuant to Article 4(1) point 4 of the Act of 21 July 2006 on the financial market supervision (consolidated text in: Dziennik Ustaw of 2018, item 621, as amended), the KNF’s tasks include undertaking information activities with respect to the functioning of the financial market, the risks to that market, and the participants of that market to protect the legitimate interests of the financial market participants.

The purpose of this communication is to provide the individuals who are interested in entering into a contract of insurance with NOVIS Poist’ovňa a.s. with information on all the circumstances relating to that insurance undertaking.

However, it should be noted that in the case of unit-linked life insurance products, it is the client who bears the investment risk and decides on the extent of that risk. Therefore, particular attention should be paid not only to the information provided by an insurance undertaking on the profitability of its products but also to information on the investment risk and guarantees.