Importance of the Amendment of the Act on Compulsory Insurance and the Act on Insurance and Reinsurance Activity of 28 May 2020

Abstract

The Act of May 28, 2020 amended the Act on Compulsory Insurance, the Insurance Guarantee Fund and the Polish Motor Insurers’ Bureau as well as the Act on Insurance and Reinsurance Activity in order to introduce efficient mechanisms and instruments to supervise foreign (re)insurance companies from the European Union Member States other than the Republic of Poland pursuing activity on the territory of Poland through a branch or in any other way under the freedom to provide services. This amendment under which the Polish Financial Supervision Authority (KNF) obtained new powers towards these entities introduced a significant change to the legal system. The KNF has been empowered to apply certain sanctions (fines) for exceeding statutory deadlines for the payment of compensation by foreign insurers, and in particular it may apply the prompt intervention mechanism if it proves necessary to remove irregularities immediately, without having to notify the competent home state supervisory authority beforehand and having to wait for its proper response. In this case, the KNF will be authorised to apply all the powers to which it is entitled towards domestic (re)insurance undertakings.