30 September 2020

Further information on the interim measure on distribution of NOVIS products

Central Bank of Iceland

The Financial Supervisory Authority of the Central Bank of Iceland (FSA Iceland) makes reference to the 18 September 2020 press release on the interim measure announced by Národná banka Slovenska (National Bank of Slovakia, NBS) on products from NOVIS Insurance Company, NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, and NOVIS Poisťovňa a.s. (referred to collectively as NOVIS) prohibiting conclusion of new unit-linked insurance contracts until specified conditions have been fulfilled.

NBS has published a statement providing further information on its decision to impose the interim measure. The statement outlines the reason, substance, scope, and duration of the measure.

This interim measure with restriction on conclusion of new unit-linked insurance contracts, has been imposed because NBS has reasonable grounds to suspect that NOVIS was not investing premiums earned under unit-linked insurance contracts to a sufficient extent according to the terms and conditions of the insurance contracts; i.e., not at the level of the surrender value in case of early termination of policyholders. With NBS’ decision, the conclusion of new contracts is prohibited while the level of invested premiums remains lower than the surrender value. This decision also entails that NOVIS is obliged to invest all new premiums received from existing insurance contracts in accordance with the terms and conditions.

According to NBS’ interim measure, NOVIS must determine, at the end of each calendar month, whether it has fulfilled the conditions in the decision and must report to NBS. If, at the end of each month, the company determines that it has met the requirements laid down in the interim measure, NOVIS may conclude new unit-linked contracts during the following calendar month.

As of today, 29 September 2020, FSA Iceland has not received confirmation from NBS stating that NOVIS has fulfilled the conditions in the decision. As a result, it is not yet established whether NOVIS may enter into new contracts.

For further information, FSA Iceland makes reference to the NBS decision.

No. 34/2020
30 September 2020
Icelandic version published 29 September 2020