Conditions Attached to Operations of Insurance and Reinsurance Intermediaries by Way of the Freedom of Establishment and Freedom to Provide Services in Latvia European Union Member State insurance and reinsurance intermediary intending to provide insurance and reinsurance mediation services in Latvia under the freedom of establishment and the freedom to provide services must take account of the following key provisions required by Latvian legislation: I. Supervision of Insurance and Reinsurance Mediation The authority responsible for supervising the insurance and reinsurance mediation business in Latvia is the Financial and Capital Market Commission. Its address is as follows: Financial and Capital Market Commission Kungu iela 1, Rīga, LV-1050 Phone: +371 777 4800 Mobile phone: +371 6515221 Fax: +371 722 5755 E-mail: fktk@fktk.lv, single.passport@fktk.lv II. Administrative Procedure for Branches of Insurance (Reinsurance) Intermediaries According to the Commercial Law, a branch of a Member State insurance and reinsurance intermediary has to be registered with the Latvian Register of Enterprises. The address and contact details of the Register of Enterprises are as follows: The Register of Enterprises Pērses iela 2, Rīga, LV 1011 Phone: +371 7031703; +371 7031706 Fax: +371 7031793 E-mail: info@ur.gov.lv Official website: www.ur.gov.lv III. Legislative Requirements 1. Law on Activities of Insurance and Reinsurance Intermediaries (available on the official website of the Financial and Capital Market Commission: www.fktk.lv) Pursuant to Article 24, Paragraph one of the Law on the Operation of Insurance and Reinsurance Intermediaries, prior to entering into an insurance contract, also, amendments thereof, an insurance intermediary is obliged to provide clients with at least the following information regarding its operation: 1) the firm name (name and surname), registration number, legal address, phone (fax) number and e-mail address of the insurance intermediary. A natural person acting on behalf of a legal person serving as an insurance intermediary shall additionally include his or her name and surname; 1
2) the register including the insurance intermediary and the mode by which its registration may be verified; 3) whether the insurance intermediary has a holding acquired directly or indirectly in an insurance undertaking or a non-member State insurer which has established a non- Member State insurer branch in the Republic of Latvia and the insurance services of which the insurance intermediary intends to distribute, covering 10 per cent and more of the voting shares or fixed capital of the parent undertaking of the insurance undertaking or the non-member State insurer; 4) whether the insurance undertaking, its parent undertaking or the non-member State insurer which has established a non-member State insurer branch in the Republic of Latvia has a holding acquired directly or indirectly in the insurance intermediary, covering 10 per cent and more of the voting shares or fixed capital of the insurance intermediary; 5) procedures for out-of-court settlement of complaints and disputes between the insurance intermediary and clients. Pursuant to Article 24, Paragraph two of the said Law, in addition to the information referred to in Article 24, Paragraph one, an insurance intermediary is obliged to inform a client that: 1) the insurance intermediary has given advice or prepared an offer based on its versatile analysis; 2) the insurance intermediary has contractual relations entitling it to engage in insurance mediation in the interests of only one or several particular insurance undertakings or branches of non-member State insurers. In that event, the insurance intermediary shall, at the client s request, indicate the firm name and legal address of the insurance undertakings or the branches of the non-member State insurers; 3) the insurance intermediary has no contractual relations entitling it to engage in insurance intermediation in the interests of only one or several particular insurance undertakings or branches of non-member State insurers and the insurance intermediary has not given any advice or prepared any offer based on its versatile analysis. In that event, the insurance intermediary shall, at the client s request, indicate the firm name and legal address of those insurance undertakings or branches of non-member State insurers in the interests of which it is engaged or is entitled to engage in insurance mediation. Under Article 24, Paragraph three of the said Law, an insurance intermediary shall, at the client s request, without delay, inform of the amount of the insurance intermediary s remuneration for the particular insurance contract offered. If the information referred to in Article 24, Paragraph two or three of the said Law is provided at the client s request only, the insurance intermediary is obliged to inform the client of his or her right to request such information. 2
An insurance intermediary is obliged to provide the information referred to in Article 24 of the said Law to a client: 1) in the Latvian language or any other language agreed upon by the contracting parties; 2) in writing or by using any other regular information carrier that may be used or is available to the client; 3) in a clear, precise and conspicuous way for the client. An insurance and reinsurance intermediary is obliged to respond to a client s complaint in writing within one month as of the date of submitting the complaint. Where due to objective reasons the term of one month cannot be observed, the insurance and reinsurance intermediary may extend it for a period of time not exceeding four months as of the date of submitting the complaint. The insurance and reinsurance intermediary shall send the client a reasoned notification in writing regarding the extension of the term. An insurance and reinsurance intermediary shall, at the client s request, acquaint him or her with all the documents relating to particular insurance and reinsurance mediation. The client is entitled to receive copies of the documents contained in the insurance and reinsurance intermediary s file for a fee not exceeding their photocopying expenses. An insurance and reinsurance intermediary shall not acquaint a client with, and shall not issue copies of, documents contained in a file of the insurance and reinsurance intermediary if the file documents have been transferred to legal enforcement institutions within criminal proceedings. Having acquainted a client with documents relating to particular insurance and reinsurance mediation, an insurance and reinsurance intermediary is entitled to request the client to sign certification in writing, listing all the documents the client has been acquainted with. If a client refuses to sign the certification referred to in this Paragraph, it shall be signed by the insurance and reinsurance intermediary, with a special note that the client has refused to sign the certification. The Financial and Capital Market Commission shall render opinions of complaints about violations of this law and other regulatory enactments to clients if such complaints are related to insurance and reinsurance mediation. 2. Consumer Rights Protection Law (available on the official website of the Consumer Rights Protection Centre: www.ptac.gov.lv). The Consumer Rights Protection Law applies to all contracts concluded between consumers and service providers (insurance and reinsurance intermediaries). It should be particularly noted that pursuant to the Latvian Consumer Rights Protection Law, a consumer is a natural or legal person expressing a wish to use or uses a service for a purpose not directly related to his or her entrepreneurial activity. 3
The Consumer Rights Protection Centre supervises the legality of the use of contract conditions from the point of view of consumer protection. Pursuant to Article 31, Paragraph two of the Law on the Operation of Insurance and Reinsurance Intermediaries, clients that should be regarded as consumers within the meaning of the Consumer Rights Protection Law are entitled to submit complaints about the violation of this law and other regulatory enactments regulating the protection of consumer rights to the Consumer Rights Protection Centre if such violations are related to insurance mediation. 3. Personal Data Protection Law (available on the official website of the Data State Inspection: www.dvi.gov.lv) The Personal Data Protection Law applies to the automatic processing of personal data when these data constitute, or will be used to constitute, a register of personal data or part thereof. The Law contains provisions on general principles related to personal data processing, the processing of sensitive information and personal codes, the rights of registered parties, data security and the storage of data. 4. Law on Taxes and Fees (available on the official website of the State Revenue Service: www.vid.gov.lv) According to the Law, a foreign insurance and reinsurance intermediary has to be registered with the State Revenue Service and is responsible for the payment of taxes according to the Latvian tax legislation. 5. Other Provisions Furthermore, the Financial and Capital Market Commission would like to draw your attention to the following general legislation: The Insurance Contract Law (available on the official website of the Financial and Capital Market Commission: www.fktk.lv); Law on the Compulsory Third Party Liability Insurance for Inland Motor Vehicle Owners (in case a foreign insurer intends to provide services of compulsory third party liability insurance for inland motor vehicle owners) Commission: www.fktk.lv); The Civil Law; Commercial Law (available on the official website of the Financial and Capital Market Commission: www.fktk.lv) The Competition Law; The Law on Advertising; Law on Prevention of Laundering of Proceeds Derived from Criminal Activity Commission: www.fktk.lv); Regulations regarding a List of Elements of Unusual Transactions and Procedures for Reporting Thereof (Regulatory Enactments of the Cabinet) Commission: www.fktk.lv). 4
Apart from that, we would like to note that an insurance and reinsurance intermediary exercising the freedom of establishment and the freedom to provide services in Latvia has to follow also other requirements that have not been referred to above, but are provided for in Latvian legislation. 5