Wednesday, August 10, 2005
Policies Valid Only if Issued by Legally Registered Insurance Companies in Serbia
(Press Release from Governor’s Cabinet)
With reference to the announcement that the Swiss company SOS Evasan S.A. published in the daily “Politika” saying that “no state authority of the Republic of Serbia has the right to issue or revoke its operating license”, at the same time inviting our citizens to obtain the policies of this insurance company directly from Switzerland or any other neighboring country or EU state with which Evasan is engaged in business activities, the NBS would like to point to the following facts:
During the supervision of the sale network conducted by insurance representation and brokerage agencies, the NBS established that a number of these agencies sold to our citizens medical assistance insurance policies issued by foreign insurance companies that could not perform insurance activities on the territory of the Republic of Serbia. One of these companies was Evasan from Switzerland whose operating license the NBS did not revoke and could not revoke since Evasan is a foreign insurance company and as such it cannot be granted an operating license by competent authorities of Serbia.
Namely, the Insurance Law stipulates that property and persons in Serbia can be insured only with insurance companies licensed by competent authorities in Serbia, and that by way of exception it is possible to insure property and persons with a foreign insurance company if such insurance is not provided for in Serbia. Given the present situation with licensed insurance companies in Serbia issuing the abovementioned insurance policies bought by our citizens for the purpose of obtaining visas and traveling abroad, it means that the sale of policies of foreign insurance companies performed by the above agencies was illegal. In accordance with the Law, the NBS therefore revoked the operating licenses of these agencies, and some of them were selling policies issued by the foreign Swiss company Evasan.
The NBS wishes to point out that certain foreign insurance companies or foreign representatives, upon the measures taken by the NBS, brought the decision to incorporate their insurance companies or agencies and operate in line with the Law, selling insurance policies to our citizens issued by foreign companies that are licensed by the NBS. The Evasan company, however, adopted no such decision and did not incorporate its insurance company in Serbia which would operate in line with legal regulations and under the supervision of competent authorities.
If the Evasan company officially and legally operates in other EU states it is not clear why it would not do so in Serbia in line with valid legal regulations of this country. Instead, this company wishes to render its services illegally from abroad and even encourages our citizens to act illegally and conclude contracts abroad, under a sham excuse that they “will manage to secure their right to the respect of regulations, as well as the right to decide on their own which insurance company services to use during their stay abroad.”
If the company wishes citizens to choose its services, it is advisable that Evasan should incorporate its own insurance company, which many banks and many other insurance companies have done, and which is the only legally possible solution. However, for the incorporation of an insurance company in Serbia, Evasan would have to deposit EUR 2 million of equity capital, employ people in the country, generate profit, and pay taxes in Serbia.
The explanation probably lies in the fact that the Evasan company for many years made use of the consequences of isolation that befell Serbia, and now, with circumstances changed it does not wish to enter into the competition with other legally registered insurance companies. It is not our aim to elaborate on routes through which money was illegally transferred from Serbia to abroad in the last decade, but it is evident that such a way of issuing foreign insurance policies was more that “lucrative” for this company and that Evasan does not wish to enter the Serbian insurance market. The activities performed by Evasan were therefore “aimed at the promotion of someone’s personal financial interests, to the detriment of the citizens of the Republic of Serbia.”
The NBS would like to warn its citizens once again that when buying insurance policies issued by foreign insurance companies unlicensed by official authorities of Serbia that they bear in mind that no competent institution of Serbia is responsible for such policies. The role of the NBS is to protect the interests of the citizens of Serbia, support the development of insurance companies that operate legally, generate profit and pay taxes in Serbia, and in accordance with all this perform their activities solely in line with the Law.
With reference to the announcement that the Swiss company SOS Evasan S.A. published in the daily “Politika” saying that “no state authority of the Republic of Serbia has the right to issue or revoke its operating license”, at the same time inviting our citizens to obtain the policies of this insurance company directly from Switzerland or any other neighboring country or EU state with which Evasan is engaged in business activities, the NBS would like to point to the following facts:
During the supervision of the sale network conducted by insurance representation and brokerage agencies, the NBS established that a number of these agencies sold to our citizens medical assistance insurance policies issued by foreign insurance companies that could not perform insurance activities on the territory of the Republic of Serbia. One of these companies was Evasan from Switzerland whose operating license the NBS did not revoke and could not revoke since Evasan is a foreign insurance company and as such it cannot be granted an operating license by competent authorities of Serbia.
Namely, the Insurance Law stipulates that property and persons in Serbia can be insured only with insurance companies licensed by competent authorities in Serbia, and that by way of exception it is possible to insure property and persons with a foreign insurance company if such insurance is not provided for in Serbia. Given the present situation with licensed insurance companies in Serbia issuing the abovementioned insurance policies bought by our citizens for the purpose of obtaining visas and traveling abroad, it means that the sale of policies of foreign insurance companies performed by the above agencies was illegal. In accordance with the Law, the NBS therefore revoked the operating licenses of these agencies, and some of them were selling policies issued by the foreign Swiss company Evasan.
The NBS wishes to point out that certain foreign insurance companies or foreign representatives, upon the measures taken by the NBS, brought the decision to incorporate their insurance companies or agencies and operate in line with the Law, selling insurance policies to our citizens issued by foreign companies that are licensed by the NBS. The Evasan company, however, adopted no such decision and did not incorporate its insurance company in Serbia which would operate in line with legal regulations and under the supervision of competent authorities.
If the Evasan company officially and legally operates in other EU states it is not clear why it would not do so in Serbia in line with valid legal regulations of this country. Instead, this company wishes to render its services illegally from abroad and even encourages our citizens to act illegally and conclude contracts abroad, under a sham excuse that they “will manage to secure their right to the respect of regulations, as well as the right to decide on their own which insurance company services to use during their stay abroad.”
If the company wishes citizens to choose its services, it is advisable that Evasan should incorporate its own insurance company, which many banks and many other insurance companies have done, and which is the only legally possible solution. However, for the incorporation of an insurance company in Serbia, Evasan would have to deposit EUR 2 million of equity capital, employ people in the country, generate profit, and pay taxes in Serbia.
The explanation probably lies in the fact that the Evasan company for many years made use of the consequences of isolation that befell Serbia, and now, with circumstances changed it does not wish to enter into the competition with other legally registered insurance companies. It is not our aim to elaborate on routes through which money was illegally transferred from Serbia to abroad in the last decade, but it is evident that such a way of issuing foreign insurance policies was more that “lucrative” for this company and that Evasan does not wish to enter the Serbian insurance market. The activities performed by Evasan were therefore “aimed at the promotion of someone’s personal financial interests, to the detriment of the citizens of the Republic of Serbia.”
The NBS would like to warn its citizens once again that when buying insurance policies issued by foreign insurance companies unlicensed by official authorities of Serbia that they bear in mind that no competent institution of Serbia is responsible for such policies. The role of the NBS is to protect the interests of the citizens of Serbia, support the development of insurance companies that operate legally, generate profit and pay taxes in Serbia, and in accordance with all this perform their activities solely in line with the Law.
