The conditions for the establishment and operation of insurance brokerage undertakings, as well as the conditions for performing insurance and reinsurance brokerage activities, are regulated by the provisions of the Insurance Law (RS Official Gazette, Nos 139/2014 and 44/2021).
Insurance brokerage activities include insurance and reinsurance brokerage activities.
Insurance brokerage activities shall be activities related to introducing the insured and/or policyholder to an insurance/reinsurance undertaking for the purpose of negotiating the conclusion of an insurance/reinsurance contract, preparation for the conclusion of these contracts, as well as providing help in exercising the rights arising from such contracts, in settlement of claims for damages.
Insurance brokerage activities shall be carried on, as an exclusive activity, by an insurance brokerage undertaking with its head office in the Republic of Serbia, registered with the competent authority based on its license to carry on such business issued by the National Bank of Serbia. Exceptionally an insurance brokerage undertaking with its head office in the Republic of Serbia may also carry on activities that are directly or indirectly related to insurance business, and the National Bank of Serbia shall prescribe such activities more closely as well as the manner and terms in which they are carried on.
An insurance brokerage undertaking shall not be entitled to carry on insurance agency business.
Prohibition of Brokerage in Insurance
An insurance brokerage undertaking shall not act as a broker in concluding an insurance/reinsurance contract with an insurance/reinsurance undertaking if the conclusion of the insurance/reinsurance contract would collide with the provisions of the Insurance Law (RS Official Gazette, Nos 139/2014 and 44/2021).
Establishing an Insurance Brokerage Undertaking and Business Name
An insurance brokerage undertaking shall be established in accordance with the law governing companies, unless specific matters are regulated otherwise by the Insurance Law (RS Official Gazette, Nos 139/2014 and 44/2021).
An insurance brokerage undertaking shall be established in the form of a joint stock or a limited liability undertaking.
If an insurance brokerage undertaking is established as a joint stock undertaking, the pecuniary part of the core capital shall not be less than the RSD equivalent of 25,000 EUR calculated at the middle exchange rate of the National Bank of Serbia on the day of payment.
If an insurance brokerage undertaking is established as a limited liability undertaking, the pecuniary part of the core capital cannot be less than the RSD equivalent of 12,500 EUR calculated at the National Bank of Serbia middle exchange rate on the day of payment.
An insurance brokerage undertaking shall be required to ensure through its operations that its core capital never falls below the euro amount of 25.000 EUR i.e., 12.500 EUR and to maintain its liquid assets (cash, short-term securities and other short-term investments and receivables) as a minimum at the level of 50% of its core capital.
The business name of the insurance brokerage undertaking shall also include “insurance brokerage” as an indication of the class of activity.
Application for an Insurance Brokerage License
The application for a license to carry on insurance brokerage activities shall be submitted by the founders of the insurance brokerage undertaking. In the licensing process, the founders of an insurance brokerage undertaking may be represented by persons authorised by them to do so.
Along with the application for the insurance brokerage licence, the founders of an insurance brokerage undertaking shall also submit the following:
- Memorandum of Association of the undertaking
- Draft Articles of Association, where such act is envisaged by the law governing companies
- Evidence that the founders hold the pecuniary part of the core capital prescribed by Article 88 of the Insurance Law (RS Official Gazette, Nos 139/2014 and 44/2021)
- Business plan of the undertaking
- A list of shareholders, and/or owners of equity interest and data about persons acquiring qualifying holding in the insurance brokerage undertaking, the amount of their holding and the persons closely linked with those persons
- The data and evidence of fulfillment of the requirements from Article 32, paragraph 1, items 1), 3) and 6) of the Insurance Law (RS Official Gazette, Nos 139/2014 and 44/2021) which are used to establish the reliability of the person acquiring qualifying holding in the undertaking
- The data about the proposed member of management of the insurance brokerage undertaking who must be authorised to carry on insurance brokerage activities, along with data and evidence that this person has good business reputation, and evidence of fulfillment of other requirements from Article 62, paragraph 2 of the Insurance Law (RS Official Gazette, Nos 139/2014 and 44/2021)
- Evidence of the required professional and technical capacity of the undertaking
- Professional liability insurance or unconditional bank guarantees accepted by the National Bank of Serbia for the insured sum and/or the guarantee amount not less than the RSD equivalent of 200,000 EUR calculated at the National Bank of Serbia middle exchange rate on the day of payment
- Evidence on relation, by capital or other basis, with insurance undertakings, reinsurance undertakings, insurance agencies or other insurance brokerage undertakings.
The National Bank of Serbia shall specify more closely the manner of evidencing good business reputation of a member of management of an insurance brokerage undertaking, what is deemed the required professional and technical capacity of that undertaking, as well as the contents of the evidence, documents, and data, for the insurance brokerage licence.
Licensing and Entry into Register
The National Bank of Serbia shall decide on the application for a license to carry on insurance brokerage activities by virtue of a decision, within 60 days from the date of the receipt of the duly completed application.
The founders of an insurance brokerage undertaking shall submit the application for registration with the competent authority within 30 days from the date of receipt of the decision on issuing the license to carry on insurance brokerage activities.
Along with the application, the undertaking shall also submit the decision on issuing the license to carry on insurance brokerage activities, as well as the decision of the National Bank of Serbia on granting prior approval for a member of management of the insurance brokerage undertaking.
An insurance brokerage undertaking must submit the decision on registration to the National Bank of Serbia within seven days from the receipt of such decision.
License Revocation
The National Bank of Serbia may revoke the license to carry on insurance brokerage activities from an insurance brokerage undertaking if the reasons for withdrawal of the approval of the National Bank of Serbia related to the undertaking’s acts and operations pursuant to the Insurance Law (RS Official Gazette, No 139/2014 and 44/2021).
The National Bank of Serbia shall revoke the license to carry on insurance brokerage activities if:
- The license has been obtained on the grounds of false and inaccurate information
- The undertaking no longer meets at least one of the requirements from Article 89 of the Insurance Law (RS Official Gazette, No 139/2014 and 44/2021)
- It has been established that the undertaking does not operate in compliance with the Law and other regulations
- The undertaking provides brokerage services to an insurance/reinsurance undertaking not licensed to carry on insurance business.
Authorisation to Carry on Insurance Brokerage Activities
In an insurance brokerage undertaking, insurance brokerage activities shall be carried on, based on employment or other work engagement outside employment relationship in accordance with law, only by persons authorised by the National Bank of Serbia to carry on insurance brokerage (hereinafter: certified brokers).
Insurance brokerage activities may not be carried on by persons sentenced to unconditional imprisonment or effectively convicted of a criminal offence that renders them unfit for pursuing those activities.
The National Bank of Serbia shall issue an authorisation for a person to carry on insurance brokerage activities provided he fulfills the following conditions:
- Has relevant professional qualifications and experience
- Has passed the certification exam to obtain the title of certified broker in the Serbian language
- Has not been issued effective protective measure prohibiting him from pursuing professional activities that render him unsuitable for pursuing brokerage activities
- Has not had his authorisation to carry on insurance brokerage activities revoked in the prior three years.
The National Bank of Serbia shall prescribe more closely the required professional qualifications and experience for the person to whom shall be issued authorization to carry on insurance brokerage activities, the curriculum content, and the manner of taking the certification exam, the manner of evidencing fulfillment of the requirements stipulated in that paragraph, and the manner of further professional education of certified brokers.
The National Bank of Serbia may issue the authorisation to carry on insurance brokerage activities, under the conditions and in the manner prescribed by the National Bank of Serbia, to a person who was awarded the title of certified broker abroad.
A certified broker shall carry on insurance brokerage activities in accordance with the rules of the insurance profession and good business practices.
Revoking Authorisation to Carry on Insurance Brokerage Activities
The National Bank of Serbia shall revoke the authorisation to carry on insurance brokerage activities from the person who:
- Has obtained the authorisation on grounds of false and inaccurate information
- No longer meets at least one of the requirements from Article 92 of the Insurance Law (RS Official Gazette, No 139/2014 and 44/2021)
- Commits a serious breach of the rules of the profession and good business practices.
Special Obligation of an Insurance Brokerage Undertaking
An insurance brokerage undertaking shall provide explanations and advice to the insurance/reinsurance policyholder and/or the insured about circumstances essential for the conclusion and implementation of an insurance/reinsurance contract.
Acting according to the listed obligation the insurance brokerage undertaking shall be specifically obliged to:
- Determine, prior to concluding an insurance/reinsurance contract, the needs and requirements of the insurance/reinsurance policyholder and/or the insured person based on the data provided by those persons
- Act as a broker for the purpose of negotiations on concluding an insurance/reinsurance contract with an insurance/reinsurance undertaking, which, in terms of the circumstances of that case, offers the most favourable coverage
- Draft an appropriate risk analysis and suggest appropriate coverage; The insurance brokerage undertaking shall draft the risk analysis considering enough insurance/reinsurance contracts available in the insurance market, allowing it to give recommendations in accordance with the professional criteria, so that the insurance/reinsurance contract would meet the policyholder’s needs and requirements
- State the reasons behind the advice regarding the proposed contract, and/or explain why the insurance/reinsurance undertaking was recommended
- Inform the insurance/reinsurance undertaking that the prospective policyholder wishes to conclude an insurance/reinsurance contract and offer to the prospective insurance/reinsurance policyholder an insurance policy or reinsurance contract and provide him with information on the method for calculating the premium
- Check the wording of the insurance policy and/or the reinsurance contract
- Offer assistance to the insurance/reinsurance policyholder and/or the insured person during the validity term of the insurance/reinsurance contract, as well as both before and after the occurrence of the insured event, and specifically ensure that the policyholder undertakes all relevant actions to exercise and/or maintain the rights specified in the insurance/reinsurance contract
- Monitor the execution of the insurance/reinsurance contract concluded through his brokerage
- Draft a proposal to amend the concluded insurance/reinsurance contract for the purpose of ensuring a higher level of protection for the insurance/reinsurance policyholder.
Protecting the Interests of the Parties
In pursuing insurance brokerage activities, an insurance brokerage undertaking shall protect the interests of insurance/reinsurance policyholders and/or the insured.
In pursuing insurance brokerage activities, an insurance brokerage undertaking shall protect such interests of the insurance/reinsurance undertaking that, before or after the conclusion of an insurance/reinsurance contract, the insurance/reinsurance policyholder shall also be obligated to observe.
In pursuing activities of preparation for the conclusion of an insurance/reinsurance contract, an insurance brokerage undertaking shall inform the insurance/reinsurance undertaking about all significant risks that are known to it or should have been known to it.
An insurance brokerage undertaking shall inform the insurance/reinsurance policyholder and/or the insured person of all legal and economic relationships with the insurance/reinsurance undertaking that may affect the impartiality of the insurance brokerage undertaking while fulfilling its obligations towards the insurance/reinsurance policyholder and/or the insured person.
The legal and economic relationships referred to in paragraph 4 herein shall be the provisions of the brokerage contract concluded between the insurance brokerage undertaking and the insurance/reinsurance undertaking according to which the insurance brokerage undertaking:
- Is obliged to act as a broker solely for the conclusion of the insurance/reinsurance contract with a particular insurance/reinsurance undertaking
- Has contracted the right to higher remuneration than regular for brokerage services rendered for certain insurance classes.
Application of the Provisions on a Joint Stock Insurance Undertaking
Provisions from Article 28, Articles 30 to 41, Article 45, Article 47, Articles 61 to 64, Articles 66, 68 and 81 of of the Insurance Law (RS Official Gazette, No 139/2014 and 44/2021) shall apply accordingly to the insurance brokerage undertaking.
Last update: 28. 08. 2023.
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