CZECH REPUBLIC Law and Practice Contributed by: Eva Nováková, Michaela Šmotková, Martin Sztefek and Kateřina Chizzola Bardonová, JŠK, advokátní kancelář, s.r.o.
3.2 Fronting Czech law does not explicitly regulate fronting, nor has the CNB adopted an official approach towards it. Therefore, fronting is generally permitted if an insurer with a proper licence from the CNB concludes an insurance contract and cedes the risk to another licensed (re)insurance company. However, the cedant must still comply with its regulatory obligations, such as having a risk management system that reflects fronting and satisfying the Solvency Capital and Minimum Capital Requirements, as well as comply- ing with distribution rules, especially those relating to consumers. CNB and EIOPA also warn that insurance undertakings should not display the characteristics of an empty shell. 4. Transaction Activity 4.1 M&A Activities Relating to Insurance Companies M&A activity in the Czech insurance sector remains robust, driven by consolidation trends and digital transformation. The market attracts both domestic players seeking scale and foreign investors pursuing Central and Eastern European expansion. Strategic buyers include major European insurers and financial conglomerates, while private equity increasingly tar- gets distribution networks and insurtech opportuni- ties. Recent notable transactions include Generali Česká pojišťovna’s acquisition of D.A.S. (legal protection insurance) in 2025, ERGO pojišťovna’s acquisition by German S.V. Holding in 2021, and UNIQA’s purchase of AXA subsidiaries in 2020. The largest insurers in the Czech market belong to international groups such as Generali, Vienna Insurance Group (VIG), Allianz, and UNIQA. Inward investment dominates, while outward activ- ity is growing as Czech insurers explore neighbour- ing markets. Share deals are preferred for preserving licences and contractual continuity. Regulatory oversight is significant. Transactions may require clearance from the Czech Office for the Pro- tection of Competition (ÚOHS) and, for foreign inves-
tors, screening under the Foreign Direct Investment Act. The CNB supervises changes in control, requiring notification at 10% and prior approval at 20%, 30% or 50%. Portfolio transfers also need CNB approval to ensure solvency compliance. Looking ahead, digitalisation, insurtech integration, and evolving EU and Czech regulatory frameworks will continue to shape M&A activity and increase transac- tion complexity. 5. Distribution 5.1 Distribution of Insurance and Reinsurance Products Insurance and reinsurance products in the Czech Republic are distributed under the Act on Distribution of Insurance and Reinsurance which implements the IDD. Typical distribution channels active in the Czech market include: • tied and multi-tied agents acting on behalf of one or more insurers; • independent brokers representing clients and offer- ing products from multiple insurers; • ancillary intermediaries and de minimis interme- diaries – ie, entities offering insurance as a sec- ondary service (eg, car rental companies or travel agencies); • bancassurance (bank-insurance model) where banks usually act as insurance agents, particularly for credit-related and life products; • direct sales – eg, insurers selling via local offices, websites or apps; and • insurtech and digital brokers – ie, technology- driven platforms offering advisory or distribution services. The CNB supervises all intermediaries and main- tains a public register (REGIS). Intermediaries must register with the CNB and meet the requirements of credibility and professional competence (ie, passing a professional exam relevant to the insurance type, or in the case of group insurance, completing a profes- sional education, and completing annual training with accredited providers). Professional indemnity insur- ance is mandatory for independent intermediaries (ie,
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