Operating licences of insurance companies
Only companies with the required operating licences are authorised to engage in insurance activities, pursuant to Act no. 100/2016 on Insurance Activities. The Central Bank of Iceland grants the operating licence.
Requirements for the establishment of insurance companies are provided for in Chapter V of the Act and Chapter VI covers the operating licences of insurance companies. Chapter II of the Act stipulates the boundaries with other activities.
The Central Bank draws attention to the fact that, pursuant to Point 1 of Paragraph 1 of Article 165 of the Act, it may impose administrative fines on anyone who violates the provisions of Paragraph 1 of Article 2, which stipulates that activities subject to an operating licence shall not be conducted without an operating licence.
Application and processing of operating licences for insurance companies
Application
If a party is planning to apply for a business licence as an insurance company, it is advised to contact the Central Bank before submitting the application.
The application for an operating licence must be in writing and accompanied by specified information, see details in Paragraph 1 of Article 18 of the Act on Insurance Activities. According to Paragraph 1 of Article 25, the Central Bank's decision regarding the granting of an operating licence must be communicated to the applicant in writing as promptly as possible, but no less than six months following the receipt of a complete application. The Central Bank must notify an applicant when an application is considered to be satisfactory.
Refusal to grant an operating licence
Paragraph 1 of Article 26 of the Act on Insurance Activities stipulates that if an application does not fulfil the requirements of the Act in the estimation of the Central Bank, it shall reject the application to grant an operating licence. Paragraph 1 of the same Article also stipulates that grounds must be given for the rejection of an application within six months of receipt of a complete application.
Cost of operating licences for insurance companies
A fixed fee shall be paid for the processing of applications for operating licences from regulated parties, see details at “ Costs due to operating licences of regulated entities ".
Eligibility assessment of members of the board of directors and managing director of insurance companies
In parallel with the processing of an application for an operating licence as an insurance company, the Central Bank shall examine the assessment of the eligibility of the members of the board of directors and managing director of the undertaking, pursuant to Article 41 of the Act on Insurance Activities. Some of the directors of insurance companies are interviewed in connection with their eligibility assessment and the managing directors of insurance companies are always interviewed.
The CEO, board members and parties responsible for key areas of activity must at all times meet the eligibility requirements of Article 41 of the Act, cf. Articles 40 and 42, and the rules set according to Paragraph 5 of Article 41 of the Act, and the Central Bank may at any time subject their eligibility to a special examination.
Qualifying holding
In parallel with the processing of an application for an operating licence for an insurance company, the Central Bank may have to assess whether the shareholders are qualified to hold a qualifying holding, pursuant to Chapter X of the Act on Insurance Activities. Further information on the assessment .