23 February 2022

Further information about NBS’ decision on violations by NOVIS

The Central Bank of Iceland Financial Supervisory Authority (FSA Iceland) makes reference to previous press releases concerning the National Bank of Slovakia’s (Národná banka Slovenska, NBS) decisions on NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, NOVIS Poisťovňa a.s. (NOVIS), most recently the press release dated 26 January 2022, concerning NBS’s 14 January 2022 decision on violations by NOVIS. NBS has now published further information on the remedial action required according to the decision.

In its decision, NBS sets forth demands for remedial action in three parts. According to a previous press release, NOVIS was subjected immediately to temporary restrictions on the distribution of company assets and on all measures that could erode asset values, as is outlined in Item III on the list of required remedial actions. NBS has now published information concerning Item I on the list of required remedial actions, according to which NOVIS is required to increase its technical provisions. The decision on increased technical provisions remains in effect from year-end 2021 through year-end 2022. Under this item on the list of required remedial actions, it is stated that, subject to NBS approval, NOVIS may apply to use other assumptions as the basis for the calculation of its technical provisions.

Further information on the aforementioned required remedial actions can be found in the NBS decision.

In view of NBS’ decision and the information that has been made public, the Central Bank has compiled updated information for Icelandic consumers on the status of NOVIS.

Further information and previous press releases

What are technical provisions?
Technical provisions are an insurance company’s obligations stemming from the insurance contracts it has made. They are an estimate of the cost the company expects to incur in paying the compensation it has pledged to pay to claimants or policyholders.

What are eligible own funds to cover the solvency capital requirement?
The funds that an insurance company must have in order to absorb losses deriving from events that lead to unfavourable results from the operation of insurance policies, investments, or other aspects of insurance company activities.

What is the solvency capital requirement?
The solvency capital requirement is a measure of all of an insurance company’s risks and is used to estimate its possible losses for the coming twelve months with 99.5% certainty. The solvency capital requirement is calculated according to standardised rules or in-house models, and it takes into account whether the insurance company’s operations are risky as regards its activities, investments, and other factors.

Previous press releases from FSA Iceland on NOVIS

Previous press releases published by NBS concerning NOVIS