Published: 10 June 2020
At its meeting held today, the Council of the Croatian Financial Services Supervisory Agency (HANFA) analysed the overview of measures for preserving financial stability taken in the EU due to the COVID-19 pandemic, including measures and recommendations issued by HANFA to companies in the Republic of Croatia. According to the analysis of data published by the European Systemic Risk Board (ESRB) on measures taken by national regulatory authorities due to the pandemic, Croatia, with about 40 measures it has taken, is positioned well above the European average, ranking sixth among the 30 analysed EEA countries.
At the European level, most of the measures relating to the non-financial sector are mainly intended for companies, while measures taken in the financial sector primarily relate to credit institutions, securities markets and insurance sector. Croatia is one of the nine countries that have, among other things, imposed a measure on the temporary suspension of dividend distribution for insurance undertakings and ranks among the top countries in terms of the number of measures taken in the insurance sector.
Following the analysis of the measures, in particularly those taken in the financial sector, HANFA Council concluded that measures and recommendations intended for the Croatian non-banking financial market and its participants were adequate and imposed on time. Even though the economic consequences of the pandemic on the domestic and international market can still not be measured, the current data point to early signs of recovery – from the return of investors in investment funds to the rise in mandatory pension fund assets, which reached their pre-coronavirus crisis level in Croatia.
HANFA will continue acting in accordance with the ESRB guidelines, but it will also keep giving its own recommendations (such as the recommendation to leasing companies on granting moratorium), depending on economic developments in the country and the impact of international and domestic trends on the financial services market.
Council members also analysed the amendments to the legislative framework governing the non-banking financial sector. The emphasis was laid on the Act on Amendments to the Insurance Act, which has been aligned with the Solvency II Directive and introduces changes relating to closer monitoring of insurance intermediaries’ activities, obligation to obtain HANFA’s approval for the appointment of insurance undertakings’ supervisory board members and possibility for leasing companies to carry out insurance distribution activities on behalf of one or more insurance undertakings. As regards other legal amendments, the Council also discussed the Act on the Implementation of the Securitisation Regulation and amendments to the Accounting Act.
By the end of 2020, the Republic of Croatia will have implemented EU Directives in the area of the financial system by adopting four new acts, namely the Act on Amendments to the Credit Institutions Act, Act on Amendments to the Act on the Resolution of Credit Institutions and Investment Firms, Act on Amendments to the Act on Settlement Finality in Payment and Financial Instruments Settlement Systems and Act on Amendments to the Capital Market Act.