CZECH REPUBLIC Law and Practice Contributed by: Eva Nováková, Michaela Šmotková, Martin Sztefek and Kateřina Chizzola Bardonová, JŠK, advokátní kancelář, s.r.o.
brokers and agents). Distributors licensed elsewhere in the EU/EEA may operate in the Czech Republic under freedom of services or establishment. The IRDA recognises three main types of intermediary licence granted by the CNB: (i) independent interme- diary licence; (ii) tied agent licence; and (iii) ancillary intermediary licence. Additionally, the IRDA also rec- ognises (i) a de minimis intermediary, who is exempt from the regulation, except for certain basic regulatory rules, and (ii) policyholders offering group insurance for remuneration who are, effective as of July 2025, subject to full regulatory obligations, including CNB registration and compliance with IDD rules. Conduct-based rules apply to all distributors (inter- mediaries as well as insurance companies), including obligations to: • act honestly and fairly and professionally, in the customer’s best interest; • assess customer needs and provide suitable rec- ommendations; and • keep records of advice and provide mandatory pre- contractual information. 6. Making an Insurance Contract 6.1 Obligations of the Insured and Insurer Czech insurance law is based on the principle that the insurer is the expert and knows about what informa- tion is needed to underwrite an insurance risk. If the insurer requires information from the insured, it must submit clear written questions during the negotia- tion process. The insured is not under a general duty to volunteer information; if no written questions are asked, the insurer’s ability to refuse or reduce benefits or withdraw from the policy is significantly limited. The insured’s primary obligation is to answer the insurer’s questionnaire truthfully and completely. If the insured provides false or incomplete answers, the insurer may terminate the contract or deny claims, provided it proves that it would not have entered the contract, or would have done so under different terms, had the true facts been disclosed. The insurer is not obliged to verify the information provided by the
insured but must inform the prospective policyholder if it becomes aware of discrepancies between the offered insurance and the policyholder’s requirements. If the insurance contract refers to insurance terms and conditions, insurers must ensure that policyholders make themselves familiar with them. The insurer also has an obligation to provide informa- tion required by the IRDA, the Insurance Act, the Civil Code, and the EU Regulation 2016/679 (the GDPR). This includes details about personal data processing, the insurer and intermediary, the insurance product, the insured’s rights, and dispute resolution mecha- nisms. The rules apply similarly to consumer and com- mercial contracts, though consumer protection princi- ples require clearer language and fairer interpretation in consumer cases. 6.2 Failure to Comply With Obligations of an Insurance Contract If the policyholder or the insured fails to answer the insurer’s questions truthfully and completely, the insur- er has three options: (i) refuse the insurance benefit, (ii) reduce it, or (iii) withdraw from the insurance contract. The insurer’s actual options depend on the circum- stances, particularly when the insurer first becomes aware of the true facts (before or after the first insured event) and whether truthful and complete answers would have affected the conclusion of the contract (eg, a higher premium or no contract at all). To withdraw from the insurance contract, there must be a contradiction between the information provided by the insured and the facts known to the insured at the time, which would have prevented the insurer from concluding the contract. Otherwise, the insurer may only refuse or reduce the insurance benefit, which is possible after the first insured event. If the insurer fails to inform the prospective policy- holder about discrepancies between the offered insur- ance and the policyholder’s requirements or does not answer the policyholder’s questions truthfully and completely, the policyholder may withdraw the con- tract. Failure to provide all legally required information may constitute an administrative offence and result in
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