CZECH REPUBLIC Law and Practice Contributed by: Eva Nováková, Michaela Šmotková, Martin Sztefek and Kateřina Chizzola Bardonová, JŠK, advokátní kancelář, s.r.o.
1. Basis of Insurance and Reinsurance Law 1.1 Sources of Insurance and Reinsurance Law As the Czech Republic is a civil law country, the pri- mary source of law is legislation and the subordinate legislation issued on its basis. The public-law aspects of insurance and reinsurance regulation arise mostly from EU law, particularly from the EU Directive 2009/138/EC (the Solvency II Direc- tive), and are implemented through Act No 277/2009 Coll., the Insurance Act (the Insurance Act). This Act sets out the conditions for the operation of insurance and reinsurance companies and establishes minimal standards of their activities. The regulation of insur- ance and reinsurance distribution derives from EU Directive 2016/97 on insurance distribution (the IDD) and is implemented by Act No 170/2018 Coll., on Insurance and Reinsurance Distribution (the IRDA), which governs the conditions for distribution and the requirements applicable to all distribution channels. The primary source of private-law regulation of insur- ance and reinsurance is Act No 89/2012 Coll., the Civil Code. Sections 2758 to 2872 of the Civil Code are devoted to insurance and set out the basic require- ments for insurance contracts and the obligations of the contractual parties. Reinsurance does not have its own specific private-law regulation and is there- fore generally governed by the rules applicable to the most similar contractual type, namely the insurance contract. A specific regulation is Act No 30/2024 Coll., on Motor Vehicle Liability Insurance, which supplements and further develops the provisions of the Civil Code on compulsory motor vehicle liability insurance, along- side certain public-law matters related to the function- ing of motor vehicle liability insurance and the activi- ties of insurers’ bureaux. Although legislation is the primary source of law, inter- pretation by certain institutions is essential for practi- cal application, even though it is not legally binding. In this respect, benchmarks, and decisions of the Czech
National Bank, as well as Supreme Court and other civil court decisions, are of particular importance.
2. Regulation of Insurance and Reinsurance 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance Regulation of insurance and reinsurance in the Czech Republic is based on a multi-layered framework of national and EU law. The primary supervisory authority is the Czech National Bank, which licenses insurers, reinsurers, and intermediaries, supervises compliance with prudential rules and reporting obligations, and oversees cross-border activities under the EU pass- port regime. The Ministry of Finance contributes to shaping the legislative framework and issues certain implementing decrees, including those related to Act No 30/2024 Coll., on Motor Vehicle Liability Insurance, although all primary legislation must be adopted by Parliament. As a member of the European Union, the Czech Republic applies EU law directly and imple- ments key directives such as Solvency II and IDD as described in 1. Basis of Insurance and Reinsurance Law . European bodies also play a role: the European Commission issues directly applicable regulations, and the European Insurance and Occupational Pen- sions Authority (EIOPA) provides standards and guid- ance. Although such guidance is not legally binding, it is essential for practical application. 2.2 Writing of Insurance and Reinsurance Only insurers and reinsurers licensed by the CNB under the Insurance Act may write insurance and reinsurance business in the Czech Republic. EU/EEA insurers may operate via freedom of services or estab- lishment; non-EU insurers require full CNB authorisa- tion. Licensing Scope • There is no separate licensing regime for consum- er, SME or corporate insurance. • Licensed insurers may underwrite insurance within the classes specified in their licence (life, non-life, or both), aligned with the Solvency II Directive.
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