Engagement in insurance and reinsurance activities requires a preliminary foundation licence and thereafter an activity licence issued by the Magyar Nemzeti Bank (MNB). Holding a foundation licence only authorises the founder to pursue activities necessary for the foundation of an insurance or reinsurance company, and to make preparations for the insurance activity and for other activities directly linked to it. Within ninety days of the receipt of the MNB’s resolution authorising the foundation, the insurer or reinsurer company is required to submit to the MNB an application for the authorisation of the commencement of insurance or reinsurance activities. An insurance or reinsurance company may commence its operations after an activity licence has been obtained.
The mandatory language of the MNB’s foundation authorisation procedure is Hungarian; the customer is required to provide certified Hungarian translations of all documents.
Applications for authorisation to found insurance or reinsurance companies and the relevant attachments must be submitted by economic operators acting as customers or their legal representatives through the MNB’s ‘ERA’ system (Electronic System for Receiving Authenticated Data). Detailed information on e-administration and on the substantive and formal requirements of electronic documents can be found on the MNB’s website under the following link:
For natural persons electronic administration is an optional procedural form. Natural persons who are not obliged to communicate electronically may submit their application, notification or other petition by using the prescribed electronic form introduced for the purpose of the application, notification or other petition concerned that is available in the ERA System, or the ÁNYK form introduced for the purpose of the application, notification or other petition concerned that is available on the dedicated storage space in the Central Client Registration Database, simultaneously uploading any other documents required by the MNB. The ÁNYK forms are also available on the MNB’s website at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/e-ugyintezes/2018-januartol-hatalyos-szabalyok/a-termeszetes-szemelyek-elektronikus-ugyintezese-anyk.
Natural persons continue to be entitled to submit applications in hard copy by using the standard forms available on the MNB’s website and attaching the annexes required by law.
The standard forms are available at the following link: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/formanyomtatvanyok.
Engagement in insurance or reinsurance activities without authorisation constitutes a criminal offence, and the MNB may commence a market surveillance procedure if it suspects engagement in unauthorised financial activities.
If the MNB finds that an activity is performed without authorisation, it will
a) prohibit the activity,
b) initiate criminal proceedings if, in its opinion, a criminal offence is involved under the Act on the Criminal Code,
c) apply measures or exceptional measures, and/or
d) impose a market surveillance fine.
The administrative time limit is three months starting from the working day following receipt of the application by the MNB.
If the application does not comply with the statutory requirements or it is deemed necessary for ascertaining the relevant facts of the case, the MNB will advise the applicant customer within forty-five days to remedy the deficiencies, also indicating the legal consequences of non-compliance. The MNB is entitled to repeatedly advise the applicant to remedy the deficiencies during the procedure. If the MNB has advised the applicant to remedy the deficiencies, the administrative time limit will be calculated from the day on which the deficiencies are remedied in full.
A detailed guide to the authorisation of founding insurance or reinsurance companies is available at: https://www.mnb.hu/letoltes/3-1-1-1-engedelyezesi-utmutato-biztosito-es-viszontbiztosito-alapitasanak-engedelyezese.pdf
An FAQ (frequently asked questions and answers) page on the authorisation of founding insurance or reinsurance companies can be accessed at:
Information about the policies to be attached to the application for authorisation to found insurance or reinsurance companies can be found at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/szektorok/biztositasi-piac/biztositok-viszontbiztositok/alapitas-engedelyezese/szabalyzatokkal-kapcsolatos-informaciok
The foundation authorisation procedure is subject to an administrative service fee of HUF 1,100,000 for insurance or reinsurance joint-stock companies and cooperative societies and HUF 300,000 for mutual insurance associations. The document confirming the payment must be attached to the application for the commencement of the procedure.
Additional information about the administrative service fee is available at the following link:
Magyar Nemzeti Bank, Insurance and Pension Funds Licensing and Legal Enforcement Department
The MNB’s decision (resolution or ruling) may not be appealed; however, customers whose rights or legitimate interests are directly affected by the decision may initiate administrative court proceedings within 30 (thirty) days of the disclosure of the resolution or ruling on the grounds of infringement, by submitting an application initiating proceedings to the Budapest-Capital Regional Court.
Legal representation is mandatory in the court proceedings. The application must be addressed to the Budapest-Capital Regional Court, and submitted electronically through the MNB’s form submission support service.
(The form submission support service can be accessed at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/hatarozatok-es-vegzesek-keresese
The submission of the application has no suspensive effect on the enforceability of the resolution or ruling, but the customer may request interim relief. As a general rule, the court rules in the proceedings without holding a hearing; however, the customer may request a hearing in the application. If no hearing is requested, a hearing may not be requested later on during the appeal procedure.
An application for a remedy may be lodged by any party who goes over a time limit or misses a legal deadline during the procedure for reasons beyond their control.
Additional general information about the authorisation procedure is available at: https://www.mnb.hu/felugyelet/engedelyezes-es-intezmenyfelugyeles/engedelyezes/tajekoztatok
Have you found this information useful? Please tell us your opinion here.