Independent Loss Adjuster - conditions for listing in the register

1. 5. 2014 | Source: Point of Single Contact (PSC) Czech Republic

The document sets forth the conditions applying for inclusion into the register of independent loss adjusters, the application requirements for inclusion and other information on the licence proceedings.

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Conditions for granting a licence

Registration:

In order for an independent loss adjuster to be registered, he must meet the following requirements:

  • probity – a trustworthy natural person refers to a natural person that is fully qualified to undertake legal actions
  1. who has not been lawfully convicted of a crime against property, an economic crime or other deliberate criminal offence or whose conviction for such crimes has been obliterated or who for other reasons is seen as never having been convicted in the past 10 years before the date of submitting the application with which the obligation of proving the natural person’s trustworthiness is required according to this law
  2. regarding whose property no bankruptcy resolution has been issued against
  3. who in the last 5 years prior to the date of filing the application connected, under this law, to the obligation to prove the trustworthiness of the natural person, has not been a member of a statutory body or other body of a legal person whose assets were declared bankrupt, or if an insolvency petition on the assets of this legal person was rejected because the assets of this legal person were insufficient to cover the costs of the insolvency proceedings, or the bankruptcy was cancelled because the assets of this legal person were totally insufficient
  4. from whom the licence to operate as insurance broker or independent loss adjuster has not been withdrawn as a result of breaching the conditions stipulated by the said Act

A credible individual is also someone with full legal capacity whose situation is described under the letter b) or c), provided that

  1. the insolvency court discontinued bankruptcy proceedings other than as a result of a resolution to withdraw bankruptcy upon compliance with the settlement resolution, or because the debtor’s assets were entirely inadequate, or where the court rejected the insolvency petition as the applicant’s assets were insufficient to cover the costs of the insolvency proceedings
  2. the person concerned was promoted to their position only after the legal entity’s bankruptcy had already occurred, or
  3. the person concerned succeeds, under a procedure pursuant to a special legal regulation, in obtaining a declaration to the effect that they performed the office with due care
  • professional eligibility – professional eligibility denotes possession of the general and professional expertise required for pursuit of their activity

General expertise shall be demonstrated by means of a document attesting to completion of secondary education. Professional expertise shall be demonstrated by furnishing a document attesting to completion of vocational education at a secondary school or university, or through passing a professional exam. For the purposes of determining professional eligibility, professional study denotes secondary or university study in the field of insurance, financial services and associated disciplines. For the purposes of determining professional eligibility, professional experience denotes being engaged at an insurance or re-insurance company associated with concluding insurance contracts or brokering insurance products.

The professional exam may be taken at an institution authorised to provide educational programmes aiming to help students attain professional eligibility and indicated in the Czech National Bank Decree, namely by applying the methods stipulated by the said Decree.

  • Liability insurance

Application requirements

Natural person (Individual)

An individual who seeks to carry out the activity of an independent loss adjuster shall indicate the following in their application for inclusion onto the register:

  1. name or names, surname, date of birth, residential address, identification number, trade name, where applicable and place of business; for natural persons with a residential address in a third country, their permanent or long-term residential address in the Czech Republic
  2. scope of activity performed by the independent loss adjuster according to insurance sectors and the territory in which the activity is to be performed
  3. envisaged start date of the independent loss adjuster
  4. identification number, if applicable

Annexes to the application for an individual:

  1. document attesting to the completion of vocational education or professional exam passed, or documents otherwise attesting to the professional eligibility of the applicant (Article 18) and each person the individual employs and who has a direct contribution towards brokering insurance products (an apparent error in the law, to be addressed by the amendment to "activities of an independent loss adjuster")
  2. documents attesting to the applicant’s credibility (Article 19)
  3. insurance policy contract covering liability for damage caused in the pursuit of activities as an independent loss adjuster

Legal entity

A legal entity who seeks to carry out the activity of an independent loss adjuster shall indicate the following in their application for inclusion onto the register:

  1. trade name including legal status, and/or name, registered address, identification number, name or names, surname, date of birth and residential address of persons who are members of the statutory body of the legal entity concerned, or persons who constitute a statutory body of the applicant; for representatives in charge, name or names, surname, date of birth and residential address; for the organisational unit of a legal entity with a registered address in a third country, its address in the Czech Republic
  2. scope of activity performed by the independent loss adjuster according to insurance sectors and the territory in which the activity is to be performed
  3. envisaged start date of the independent loss adjuster
  4. identification number, if applicable

Annexes to the application for a legal entity:

  1. documents attesting to completion of vocational education or professional exam taken pursuant to the said Act, or documents otherwise demonstrating the professional eligibility of the representative in charge and any other person contributing directly to the activity of an independent loss adjuster
  2. documents attesting to the applicant’s credibility (Article 20)
  3. documents otherwise demonstrating the professional eligibility of the representative, members of the applicant's statutory body and all members of board of directors in case of joint stock company (Art. 19)
  4. insurance policy contract covering liability for damage caused by the performance of activities as an independent loss adjuster
  5. full extract from the Commercial Register where the legal entity was listed in the said register prior to submission of their application, not older than 3 months

An individual or legal entity with a residential address or registered address outside the territory of the Czech Republic shall furnish documents attesting to the long-term residence permit or permanent residence permit of the applicant for listing in the register in the territory of the Czech Republic; where a legal entity is concerned, the same shall be provided for the head of the organisational unit of the entity

Further information on the licence proceedings

Type of licence

  • Registration in the register maintained by the Czech National Bank

Respective authority

  • Czech National Bank

Control and supervisory bodies

  • Czech National Bank

Procedure for granting a licence

  • The applicant submits the application for registration in the register maintained by Czech National Bank. Czech National Bank shall register the applicant in the register within 60 days of receipt of the application (provided that the conditions set down by Act 38/2004 Coll., are met). Czech National Bank shall issue the entity a certificate of registration in the register.

Application clearing deadline

  • The deadline for registration in the register is within 60 days of receipt of the written application if the conditions set down by Act No. 38/2004 Coll., are met.

Fees

  • CZK 10,000

Validity period of licence

  • There is no restriction on the term (it is only possible to be struck off the register – upon request or where the party concerned ceases to meet the requirements specified by the law)

Combined proceedings (recognising qualifications and granting authorisation)

  • No, even though one of the requirements for inclusion in the register involves submission of a document attesting to professional qualification.

Authorisation granted by expiration of deadline period

  • These proceedings are subject to the rule that a licence shall be automatically granted upon expiry of the deadline period.

Legal Regulation

  • Act No. 38/2004 Coll., on insurance intermediaries and independent loss adjusters and amending the Trade Licensing Act (Act on insurance intermediaries and independent loss adjusters)

Professional liability insurance

  • An independent loss adjuster must be insured throughout the performance of his activities against liability for damage caused by this activity with a limit of indemnity of an equivalent value of at least € 500,000 for each insured claim; in the case of overlapping multiple insurance claims in one year, an equivalent value of at least € 1,000,000.

Related legal regulations

  • Act No. 363/1999 Coll. on insurance
  • Act No. 37/2004 Coll. on insurance contract
  • Commercial Code
  • Decree 582/2004 Coll., which implements certain provisions of the Act on insurance intermediaries and loss adjusters

back to the document "Independent Loss Adjuster - licencing step by step"