Funded Pensions Act
Passed 14 April 2004
(RT2 I 2004, 37, 252),
entered into force 1 May 2004.
Amended by the following Acts:
28.11.07 entered into force 01.01.2008 - RT I 2007, 62, 395
22.11.06 entered into force 1.01.07 - RT I 2006, 56, 417
10.05.06 entered into force 1.01.07 - RT I 2006, 26, 193
8.12.04 entered into force 1.01.05 - RT I 2004, 90, 616
Chapter 1
General Provisions
§ 1. Scope of application and purpose of Act
This Act provides for the conditions and procedure for the making of
contributions to and payments from funded pensions with the purpose of creating
the opportunity for persons who have made contributions to a funded pension to
receive additional income, besides state pension insurance, after reaching
pensionable age.
§ 2. Funded pension
(1) The following are types
of funded pensions:
1) mandatory funded
pensions;
2) supplementary funded
pensions.
(2) A mandatory funded
pension is a periodic benefit which is guaranteed pursuant to law, for the
receipt of which units of a mandatory pension fund are acquired according to
this Act and the Social Tax Act (RT I 2000, 102, 675; 2001, 50, 285; 59, 359;
79, 480; 91, 544; 95, 587; 2002, 44, 284; 62, 377; 111, 662; 2003, 82, 549; 88,
587 and 591), and which is paid from the pension fund or by an insurer.
(3) A supplementary funded
pension is a benefit for the receipt of which units of a voluntary pension fund
are acquired or an insurance contract for a supplementary funded pension is
entered into pursuant to the requirements provided for in this Act, and which
is subject to the tax incentives provided for in the Income Tax Act (RT I 1999,
101, 903; 2001, 11, 49; 16, 69; 50, 283; 59, 359; 79, 480; 91, 544; 2002, 23,
131; 41, 253; 44, 284; 47, 297; 62, 377; 111, 662; 2003, 18, 105; 58, 387; 82,
549; 88, 587 and 591).
§ 3. Pension fund
(1) A pension fund is a
contractual investment fund the principal objective of which is to provide
unit-holders of the pension fund with a funded pension under the conditions and
pursuant to the procedure provided for in this Act and the Investment Funds Act
(RT I 2004, 36, 251).
(2) The following are types
of pension funds:
1) mandatory pension funds;
2) voluntary pension funds.
(3) Contributions to and
payments from mandatory pension funds are made in connection with the receipt
of mandatory funded pensions.
(4) Contributions to and
payments from voluntary pension funds are made in connection with the receipt
of supplementary funded pensions.
§ 4. Name of pension fund
(1) The word pensionifond
[pension fund] shall be used in the name of a pension fund.
(2) Other persons, agencies
and associations that are not pension funds shall not use the word pensionifond
or words or abbreviations with a misleadingly similar meaning in Estonian or in
any other language in their name.
(3) Words that misleadingly
give reason to believe that a pension fund is of a different type than it
actually is shall not be used in the name of a mandatory pension fund or
voluntary pension fund.
§ 5. Application of Investment Funds Act and Administrative Procedure
Act
(1) The provisions of the
Investment Funds Act apply to pension funds, management companies managing
pension funds (hereinafter pension management companies), persons who have
operated as pension management companies, depositaries of pension funds and to
the making of contributions to and payments from funded pensions, unless
otherwise provided by this Act.
(2) The rights and
obligations attached to units of pension funds and transactions involving units
of pension funds shall be provided for in the Investment Funds Act with the
specifications arising from this Act. The provisions of subsection 109 (7) of
the Investment Funds Act apply to the making of claims for payment against
units of pension funds.
(3) The provisions of the
Administrative Procedure Act (RT I 2001, 58, 354; 2002, 53, 336; 61, 375; 2003,
20, 117; 78, 527) apply to administrative proceedings prescribed in this Act,
taking into account the specifications provided for in this Act, the Investment
Funds Act and the Financial Supervision Authority Act (RT I 2001, 48, 267;
2002, 12, correction notice; 23, 131; 105, 612; 2003, 81, 544) .
Chapter 2
Mandatory Funded Pensions
Division 1
Contributions to Mandatory Funded Pensions
§ 6. Obligated persons
Resident natural persons provided for in subsection 6 (1) of the Income
Tax Act for whom a payer of social tax is required to pay social tax or who pay
social tax for themselves and who are required to make contributions to a
mandatory funded pension (hereinafter contributions) on remuneration provided
for in § 7 of this Act are obligated persons.
§ 7. Object of contribution
(1) Contributions
shall be made on remuneration specified in clauses 2 (1) 1)-6), 8) and 9) and
clause 6 (1) 2) of the Social Tax Act during the period provided for in
subsection (3) of this section.
(10.05.06 entered into force 1.01.07 - RT I 2006, 26, 193)
(2) Contributions shall not
be made on amounts specified in clause 2 (1) 7) and § 3 of the Social Tax Act,
and on amounts paid to persons specified in § 6 of the Social Tax Act, or
unemployment insurance benefits provided for in the Unemployment Insurance Act
(RT I 2001, 59, 359; 82, 488; 2002, 44, 284; 57, 357; 61, 375; 89, 511; 111,
663; 2003, 17, 95; 88, 591).
(3) The obligation to make
contributions arises on 1 January of the year following the year during which
an obligated person attains 18 years of age, and extinguishes on 31 December of
the year during which the registrar grants an application specified in §§ 49 or
51 of this Act submitted by the obligated person.
§ 8. Contribution period
(1) The contribution period
is one calendar month.
(2) In the case of sole
proprietors, the contribution period is one calendar year.
§ 9. Rate of contribution
The rate of contribution is 2 per cent of the remuneration specified in
subsection 7 (1) of this Act.
§ 10. Additional contribution to mandatory pension fund upon receipt of
parental benefit
(1) One per cent of the
amount of a parental benefit (hereinafter benefit) per each child born is
additionally allocated from the state budget (hereinafter additional
contribution) to persons who receive such benefits pursuant to the Parental
Benefit Act (RT I 2003, 82, 549) in order to make contributions to mandatory
pension funds (hereinafter in this Chapter pension fund).
(2) Additional contributions
to a pension fund shall be made for an obligated person during the period of
payment of the benefit as of the grant of the benefit.
(3) An obligated person
acquires units of a pension fund provided for in subsection 19 (3) of this Act
for the additional contributions.
(4) The provisions concerning
contributions apply to additional contributions.
§ 101. Contributions to mandatory pension
fund after employment by institutions of European Community
(1) Obligated
persons who meet the conditions provided by Regulation (EEC, Euratom, ECSC) No
259/68 of the Council laying down the Staff Regulations of Officials and the
Conditions of Employment of Other Servants of the European Communities and
instituting special measures temporarily applicable to officials of the
Commission (Staff Regulations of Officials) (OJ L 56, 4.03.1968, pp. 17)
(hereinafter Council Regulation) have the right to transfer 6/22 of the total
of the pension funds accrued during the time of their employment by the institutions
of the European Community to the mandatory pension fund pursuant to the
procedure established by subsection 12 (21) of the State Pension
Insurance Act.
(2) An
obligated person acquires units of a pension fund provided for in subsection 19
(3) of this Act for the contributions specified in subsection (1) of this
section. .
(28.11.07 entered into force 01.01.2000 - RT I 2007, 62, 395)
§ 11. Procedure for making contributions
(1) A payer of social tax
provided for in § 4 of the Social Tax Act shall:
1) check, on the basis of a
person's personal identification code, whether a recipient of remuneration
specified in clauses 2 (1) 1), 3), 8) and 9) and clause 6 (1) 2) of the Social
Tax Act is an obligated person, and withhold contributions on such remuneration
of the obligated person at the rate specified in § 9 of this Act;
(10.05.06 entered into force 1.01.07 - RT I 2006, 26, 193)
2) check, on the basis of a
person's personal identification code, whether a recipient of remuneration
specified in clauses 2 (1) 4) and 6) of the Social Tax Act is an obligated
person, and withhold contributions on such remuneration of the obligated person
at the rate specified in § 9 of this Act, unless the recipient of the
remuneration is entered in the commercial register or registered with the Tax
and Customs Board as a sole proprietor (hereinafter sole proprietor) and the
remuneration is his or her business income;
3) check, on the basis of a
person's personal identification code, whether a recipient of a benefit specified
in subsection 10 (1) of this Act is an obligated person and calculate the
amount of the additional contribution at the rate specified in subsection 10
(1) of this Act on such benefit paid to the obligated person;
4) transfer withheld
contributions and additional contributions calculated on the basis of clause 3)
of this subsection into the bank account of the Tax and Customs Board by the
tenth day of the month following the month in which the remuneration is paid,
and submit the corresponding declaration established by the Minister of Finance
to the Tax and Customs Board by the same date;
5) issue, at the request of
a person to whom amounts provided for in clauses 1) and 2) of this subsection
have been paid or for whom additional contributions provided for in subsection
10 (1) of this Act have been made, a certificate to the person concerning the
withheld contributions or additional contributions by 1 February of the year
following the given calendar year or, if he or she leaves employment, together
with the final settlement. The standard format for the certificate shall be
established by the Minister of Finance.
(2) If a sole proprietor is
required to make contributions pursuant to this Act, the Tax and Customs Board
is required to calculate the amount of the contribution on income specified in
clause 2 (1) 5) of the Social Tax Act at the rate provided for in § 9 of this
Act on the basis of an income tax return for natural persons and information in
the register of taxable persons, and is required to issue a tax notice
concerning the amount of the contribution to be made to the sole proprietor not
later than by 1 September of the year following the taxable period for social
tax.
(3) A sole proprietor is
required to pay the amount of contribution to be made and specified in
subsection (2) of this section into the bank account of the Tax and Customs
Board by 1 October of the year following the taxable period for social tax.
(4) The contributions of
employees of such authorities whose staff, consolidated data or specific duties
constitute a state secret shall be calculated pursuant to the procedure
established by a regulation of the Minister of Finance.
(5) The contribution
calculated for each obligated person shall be rounded to full kroons. Amounts
less than 50 cents shall not be taken into account, and amounts exceeding 50
cents shall be rounded to the next full kroon.
§ 12. Forwarding of funds and information received to registrar
(1) The Tax
and Customs Board shall transfer money received upon the payment of
contributions, additional contributions and the contributions provided by
subsection 101 (1) of this Act into the bank account of the
registrar of the Estonian Central Register of Securities (hereinafter
registrar) held in the Bank of Estonia within fifteen working days as of
receipt of such money.
(28.11.07 entered into force 01.01.2000 - RT I 2007, 62, 395)
(2) At the same time as the
amounts specified in subsection (1) of this section are transferred, the Tax
and Customs Board shall forward the following information to the registrar
concerning the persons whose amounts are transferred to the registrar:
1) the name of the person;
2) his or her personal
identification code;
3) the amount of the
contribution;
4) the amount of the
additional contribution;
41) the
amount of the contribution provided in subsection 101 (1) of this
Act.
(28.11.07 entered into force 01.01.2000 - RT I 2007, 62, 395)
5) the registry code of the
withholding agent or, in the case of a sole proprietor, the personal
identification code of the person who made the contribution.
(3) The procedure for the
forwarding of information and transfer of money to the registrar and for the
correction of errors related thereto shall be established by the Minister of
Finance by the procedure related to units of mandatory pension funds.
(4) Amounts corresponding to
the mandatory funded pension part of social tax provided for in subsections 10
(4) and (41) of the Social Tax Act shall be transferred and the
information shall be forwarded to the registrar pursuant to the procedure
provided for in §§ 10 and 11 of the Social Tax Act.
§ 13. Competence of Tax and Customs Board upon administration of
contribution
(1) The provisions of the
Taxation Act (RT I 2002, 26, 150; 57, 358; 63, 387; 99, 581; 110, 660; 111,
662; 2003, 2, 17; 48, 341; 71, 472; 82, 554; 88, 591; 2004, 2, 7) concerning
taxes apply to contributions. The Tax and Customs Board shall verify that
contributions are made correctly, shall designate, if necessary, amounts
payable, shall collect amounts payable pursuant to the procedure provided for
in the Taxation Act, and shall apply coercive measures permitted by law in
order to enforce the performance of obligations.
(2) The provisions of the
Taxation Act concerning withholding agents apply to withholding agents for
contributions, and the provisions of the Taxation Act concerning taxpayers
apply to obligated persons. Sanctions prescribed in the Taxation Act and by
other penal laws shall be imposed on such persons for violation of the
obligations of taxpayers and withholding agents provided by law.
Division 2
Submission of Choice Application and Opening of Pension Account
§ 14. Choice of pension fund
(1) In order to acquire units
of a pension fund, a person shall submit a corresponding application (hereinafter
choice application).
(2) The right of a person to
submit a choice application arises when the person attains 18 years of age. A
person of at least 16 years of age may also submit a choice application with
the written consent of his or her legal representative.
(3) If a successor with
restricted active legal capacity inherits units of a pension fund, the legal
representative of the person shall submit the choice application.
(4) By submitting a choice
application, the person undertakes to make contributions to a mandatory funded
pension to the pension fund indicated in the choice application under the
conditions and pursuant to the procedure provided for in this Act.
(5) Upon submission of a
choice application, a person shall have equal access to the rules and
prospectuses of all registered pension funds.
(6) Upon failure to submit a
choice application, subsection 19 (3) of this Act applies.
§ 15. Choice application
(1) A choice application
shall set out the following:
1) the name of the person;
2) his or her personal
identification code;
3) his or her contact
information;
4) the preferences of the
person regarding the manner in which notices are to be submitted to him or her
and regarding the corresponding authority;
5) the name of the pension
fund chosen by the person;
6) confirmation from the
person that he or she has had access to the rules and prospectuses of all
registered mandatory pension funds;
7) confirmation from the
person that he or she agrees to the rules of the pension fund chosen by him or
her;
8) confirmation from the
person that he or she is aware of the fact that the choice application cannot
be withdrawn;
9) confirmation from the
person that he or she is aware of the obligation to make contributions;
10) the date of submission of
the application;
11) the signature of the
person unless the application is submitted in a manner which enables written
reproduction and identification of the person.
(2) The format of choice
applications shall be established by a regulation of the Minister of Finance,
which may prescribe, if necessary, additional information to be set out in a
choice application in addition to that provided for in subsection (1) of this
section.
§ 16. Submission of choice application
(1) A choice application
shall be submitted to an account administrator of the Estonian Central Register
of Securities (hereinafter account administrator) chosen by the applicant, in
writing or in a manner which enables written reproduction and identification of
the person.
(2) An account administrator
shall identify a person entitled to submit a choice application or his or her
representative on the basis of the person's identity document and shall forward
the information in the choice application immediately to the registrar under
the conditions and pursuant to the procedure provided for in the Estonian
Central Register of Securities Act (RT I 2000, 57, 373; 2001, 48, 268; 79, 480;
89, 532; 93, 565; 2002, 23, 131; 63, 387; 110, 657; 2003, 51, 355; 88, 591) and
legislation established on the basis thereof, and under the conditions and
pursuant to the procedure established by the registrar on the basis of the
specified Act and legislation.
(3) A person of at least 18
years of age may submit a choice application personally and directly to the
registrar if:
1) a certificate for giving
digital signatures has been issued to the person who submits the choice
application pursuant to the Digital Signatures Act (RT I 2000, 26, 150; 92,
597; 2001, 56, 338; 2002, 53, 336; 61, 375; 2003, 88, 591 and 594) and the
choice application is submitted with a digital signature, or
2) the person who submits
the choice application is identified according to an agreement between the
registrar and the account administrator by corresponding organisational means,
hardware and software, and the choice application is submitted in a manner
which enables written reproduction and identification of the person.
(4) A choice application
shall be submitted personally or through a representative.
(5) The
legal representative of a person or a representative authorised by the legal
representative in writing may submit a choice application in the name of a
person who is of at least 16 years of age.
(8.12.04 entered into force 01. 01.2005 - RT I 2004, 90, 616)
(6) If a choice application is
submitted through a representative, the representative shall identify the
principal on the basis of the principal's identity document. The representative
shall prove his or her right of representation to the account administrator and
append a copy of the identity document of the principal to the choice
application.
(7) An application submitted
in the name of another person without the right of representation is valid
unless the person in whose name the choice application was submitted without
the right of representation contests the application within thirty days as of
the day when the person became or should have become aware of submission of the
choice application.
(8) A choice application
submitted to the registrar or to an account administrator cannot be withdrawn.
(9) A person may amend his or
her application until 31 October of the year of submission of his or her choice
application. The format of an application for amendment of a choice application
and the information to be set out therein shall be established by a regulation
of the Minister of Finance.
(8.12.04 entered into force 01. 01.2005 - RT I 2004, 90, 616)
§ 17. Pension account
(1) The registrar shall open
a pension account for an obligated person on the basis of a choice application
to keep account of the pension fund units belonging to the person.
(2) A pension account shall
not be opened if a choice application does not comply with the requirements
established by legislation, if the personal identification code indicated in
the choice application contains mistakes or if a choice application is
submitted by a person who is not entitled to submit a choice application.
(3) If a pension account is
not opened, the registrar shall notify the person who submitted the choice
application or the account administrator immediately thereof and of the reasons
therefor by forwarding an electronic error notice through the information
system. The account administrator shall immediately notify the person who
submitted the choice application of the error notice. In order for a pension
account to be opened, the person shall submit a new, valid choice application.
(4) An error notice provided
for in subsection (3) of this section shall include:
1) the legal basis for
refusal to open the pension account;
2) the reasons for refusal
to open the pension account;
3) the date of forwarding
the error notice.
(5) The registrar shall open
pension accounts for other obligated persons in addition to for obligated
persons who have submitted a choice application. Pension accounts shall be
opened on the basis of information received from the Tax and Customs Board
pursuant to subsection 12 (2) of this Act.
(6) A pension account shall
be opened immediately after the registrar receives the information indicated in
the choice application or the information specified in subsection 12 (2) of
this Act, except in the case specified in subsection (2) of this section.
(7) The list of information
to be entered in a pension account shall be established, entries shall be made
in pension accounts, persons shall be notified of entries, and fees for
services related to pension accounts shall be charged under the conditions and
pursuant to the procedure provided for in the Investment Funds Act, the
Estonian Central Register of Securities Act and legislation established on the
basis thereof, and in the price list of the registrar.
(8) Orders by the holder of a
pension account to make entries or perform other acts provided for in this Act
shall meet the requirements established by the registrar.
(9) The holder of a pension
account is required to notify the account administrator or, in the case
specified in subsection 16 (3) of this Act, the registrar immediately of any
changes to the information set out in the choice application or the application
provided for in subsections 21 (1), 25 (1) and 29 (1) of this Act.
(10) The registrar shall
forward, once a year not later than by 1 December, information specified in
clauses 15 (1) 1) and 2) of this Act concerning holders of pension accounts who
have submitted choice applications during the period from 1 November of the
previous year until 31 October of the year when information is forwarded to the
Tax and Customs Board.
Division 3
Acquisition of Units of Pension Fund
§ 18. Contributions to pension funds
Contributions to a pension fund shall be made:
1) upon the receipt of
money specified in § 12 of this Act and in subsections 10 (4) and (41)
of the Social Tax Act by the registrar;
2) upon the exchange of the
units of a pension fund by a unit-holder according to the provisions of §§
23-27 of this Act;
3) upon the acquisition of
units of a pension fund by a pension management company pursuant to the
provisions of §§ 78-83 of the Investment Funds Act;
4) upon the acquisition of
units if another pension fund is liquidated pursuant to the provisions of §§
37-39 of this Act;
5) upon the acquisition of
units for the purposes of compensating for loss pursuant to the procedure
provided for in §§ 34 and 35of this Act and §§ 70-73 of the Guarantee Fund Act
(RT I 2002, 23, 131; 57, 357; 102, 600).
§ 19. Conditions for contributions
(1) Upon the making of a
contribution to a pension fund, a person shall acquire the number of units
issued by the pension management company corresponding to the amount of the
contribution.
(2) A person may only make
contributions to one pension fund at a time.
(3) Contributions shall be
made to the mandatory pension fund indicated in the choice application or, in
the absence of a choice application, to a pension fund determined by the
registrar by the drawing of lots. The procedure for the drawing of lots shall
be established by the Minister of Finance on the proposal of the registrar.
(4) If contributions to a
pension fund determined by the registrar have begun and the obligated person
submits a choice application, the making of contributions to the pension fund
specified in the choice application shall commence as of 1 January of the year
following the year during which the application is submitted, provided that the
application is submitted and the information set out in the application is
received by the registrar by 31 October at the latest. The making of
contributions on the basis of a choice application submitted between 1 November
and 31 December to the pension fund specified in the choice application shall
commence as of 1 January of the second year following the submission of the
application.
(5) Contributions shall be
made to a pension fund at the issue price of units provided for in § 136 of the
Investment Funds Act (hereinafter issue price).
(6) Upon calculation of the
issue price of units, the same issue fee rate shall be charged for units issued
on the same date, unless otherwise provided for in this Act, the Investment
Funds Act or in the corresponding pension fund rules.
§ 20. Prohibition on limitation of contributions
No limitations on the number of units acquired at any one time or on the
amounts payable for units upon issue of units of a pension fund shall be
prescribed in the rules of a pension fund.
§ 21. Contributions to new pension fund
(1) An obligated person may
begin to make contributions to a new pension fund once a year for which the
person shall submit an application for making contributions to a new pension
fund (hereinafter in this section application) to the account manager or the
registrar.
(2) An obligated person has
the right to submit an application as of 1 January of the year when the
obligation to make contributions arises. The provisions of subsections 16
(1)-(8) and subsections 19 (1), (2), (5) and (6) of this Act apply to a
corresponding application submitted by an obligated person and to the
acquisition of units on the basis thereof.
(3) The following shall be
set out in an application:
1) the name and personal
identification code of the obligated person;
2) the contact details of
the obligated person;
3) the preferences of the
person regarding the manner in which notices are to be submitted to him or her
and regarding the corresponding authority;
4) the name of the pension
fund to which the person wishes to commence making contributions;
5) confirmation from the
person that he or she has had access to the rules and prospectuses of all
registered mandatory pension funds;
6) confirmation from the
person that he or she agrees to the rules of the pension fund chosen by him or
her;
7) the date of submission
of the application;
8) the signature of the
applicant unless the application is submitted in a manner which enables written
reproduction and identification of the person.
(4) The registrar shall
refuse to accept an application if the application submitted or forwarded to
the registrar through the account administrator does not comply with the
requirements provided for in this Act or the issue of units of the pension fund
into which the person wishes to commence making contributions is prohibited
pursuant to the Investment Funds Act or this Act.
(5) Upon refusal to accept an
application, the registrar shall notify the applicant or the account
administrator immediately thereof and of the reasons therefor by forwarding an
electronic error notice through the information system. The account
administrator shall immediately notify the applicant of the error notice. In
order to commence the making of contributions to a new pension fund, a person
shall submit a new, valid application.
(6) An error notice provided
for in subsection (5) of this section shall include:
1) the legal basis for
refusal to accept the application;
2) the reasons for refusal
to accept the application;
3) the date of forwarding
the error notice.
(7) The right of an obligated
person to acquire units of a new pension fund arises on 1 January of the year
following the year during which the application is submitted, provided that the
application is submitted and the information set out in the application is
received by the registrar by 31 October at the latest. The right to acquire
units of a new pension fund arises, on the basis of an application submitted
during the period between 1 November and 31 December, as of 1 January of the
second year following the submission of the application.
(8) An obligated person may
amend his or her application until 31 October by submitting a new application
provided for in subsection (1) of this section.
(9) The format of
applications shall be established by a regulation of the Minister of Finance,
which may prescribe, if necessary, additional information to be set out in an
application in addition to that provided for in subsection (3) of this section.
§ 22. Procedure for issue of units of pension fund
(1) The issue of units of a
pension fund shall be organised by the registrar pursuant to legislation, the
pension fund rules and a contract entered into by the registrar with the
pension management company and the depositary of the pension fund.
(2) The registrar shall
perform the following operations at the earliest opportunity, but not later
than on the working day following the receipt of money specified in clause 18
1) of this Act and receipt of the required information:
1) transfer, into the
pension account of each person, the number of units of the pension fund chosen
by the person corresponding to the amount received for the person and the issue
price of a unit;
2) transfer an amount
corresponding to the issue price of units transferred in the pension account
pursuant to clause 1) of this subsection into the bank account indicated by the
depositary of the pension fund;
3) forward, to the
depositary or pension management company of each pension fund, information
concerning the number of units of the corresponding pension fund additionally
transferred into pension accounts and the amounts transferred for this purpose.
At the request of the pension management company, this information shall be
submitted for each unit-holder.
(3) The number of units of a
pension fund to be transferred into a pension account shall be determined based
on the issue price of the unit on the date on which the transfer specified in
clause (2) 2) of this section is made.
(4) The specific procedure
for the issue of units of a pension fund shall be established by the procedure
related to the units of a mandatory pension fund to be established pursuant to
subsection 12 (3) of this Act.
Division 4
Exchange of Units of Pension Fund
§ 23. Bases for exchange of units of pension fund
(1) A unit-holder has the
right to exchange units of a pension fund only for units of another pension
fund under the conditions and pursuant to the procedure provided for in this
Division.
(2) The exchange of units of
a pension fund is not permitted if the redemption or issue of units of either
of the pension funds involved in the exchange is prohibited pursuant to the
Investment Funds Act or this Act.
(3) No payments shall be made
to unit-holders from pension funds upon the exchange of units of a pension
fund.
(4) Units of pension funds
shall be exchanged pursuant to the procedure prescribed in this Act, the
Investment Funds Act and in the pension fund rules of the pension funds
involved in the exchange.
§ 24. Conditions for exchange of units of pension fund
(1) In order to exchange
units of a pension fund, a unit-holder must own at least 500 units in the
pension fund as at the day of submission of the application.
(2) All the units of a
unit-holder in one pension fund shall be exchanged at the same time.
(3) Units of pension funds
shall be exchanged once a year on the first working day following 1 January.
(4) Upon an exchange of units
of a pension fund, the pension fund to which the contributions of the person to
a mandatory funded pension are made, shall remain the same.
§ 25. Application for exchange of units of pension fund
(1) In order to exchange
units of a pension fund, a unit-holder shall submit an application for the
exchange of units of a pension fund (hereinafter in this section application)
to the account administrator or registrar. The provisions of subsections 14 (2)
and 16 (1)-(8) of this Act apply to such applications.
(8.12.04 entered into force 01. 01.2005 - RT I 2004, 90, 616)
(2) The following shall be
set out in an application:
1) the name and personal
identification code of the unit-holder;
2) the contact details of
the unit-holder;
3) the preferences of the
person regarding the manner in which notices are to be submitted to him or her
and regarding the corresponding authority;
4) the name of the pension
fund the units of which the unit-holder wishes to exchange;
5) the name of the pension
fund the units of which the unit-holder wishes to acquire upon the exchange;
6) confirmation from the
person that he or she has had access to the rules and prospectuses of all
registered mandatory pension funds;
7) confirmation from the
person that he or she agrees to the rules of the pension fund chosen by him or
her;
8) the date of submission
of the application;
9) the signature of the
unit-holder unless the application is submitted in a manner which enables
written reproduction and identification of the person.
(3) The registrar shall
refuse to accept an application if the application submitted or forwarded to
the registrar through the account administrator does not comply with the
requirements provided for in this Act, the condition provided for in subsection
24 (1) of this Act has not been met or the issue of units of a pension fund the
units of which a unit-holder wishes to acquire for the units belonging to him
or her is prohibited under circumstances provided for in subsection 23 (2) of
this Act.
(4) Upon refusal to accept an
application, the registrar shall notify the applicant or the account
administrator immediately thereof and of the reasons therefor by forwarding an
electronic error notice through the information system. The account
administrator shall immediately notify the applicant of the error notice. In
order to exchange units of a pension fund, a person shall submit a new, valid
application.
(5) An error notice provided
for in subsection (4) of this section shall include:
1) the legal basis for
refusal to exchange units of a pension fund;
2) the reasons for refusal
to exchange units of a pension fund;
3) the date of forwarding
the error notice.
(6) In order to exchange
units of a pension fund as at 1 January, a valid application shall be submitted
and the information set out in the application shall be received by the
registrar by 31 October of the year preceding the year of the exchange at the
latest. The right to acquire units of a new pension fund arises, on the basis
of an application submitted during the period between 1 November and 31
December, as of 1 January of the second year following submission of the
application.
(7) Until 31 October, a
person may amend his or her application by submitting a new application
provided for in subsection (1) of this section.
(8) The format of
applications shall be established by a regulation of the Minister of Finance,
which may prescribe, if necessary, additional information to be set out in an
application in addition to that provided for in subsection (2) of this section.
§ 26. Procedure for exchange of units of pension fund
(1) Upon an exchange of units
of a pension fund, the units of one pension fund are redeemed and the units of
another pension fund are issued.
(2) As a result of an
exchange, a person shall acquire, for the redemption price of the units of a
pension fund, a corresponding number of units of another pension fund, and
payment for the units of the other pension fund shall be made at the issue
price of the same day.
(3) An exchange of units of a
pension fund shall be organised by the registrar together with the depositary
of the pension fund.
(4) If the redemption of
units of a pension fund the units of which a unit-holder wishes to exchange is
prohibited under circumstances provided for in subsection 23 (2) of this Act,
the registrar shall organise the exchange at the earliest opportunity after
such circumstances cease to exist.
(5) If the issue of units of
a pension fund the units of which a unit-holder wishes to acquire for the units
belonging to him or her is prohibited under circumstances provided for in
subsection 23 (2) of this Act on the date of the exchange of the units of the
pension fund provided for in subsection 24 (3) of this Act, the registrar shall
refuse to exchange the units of the pension fund and shall notify the applicant
or the account manager immediately thereof. The account administrator shall
immediately notify the applicant of the refusal to exchange units.
(6) The specific conditions
and procedure for the issue of units of a pension fund shall be established by
the procedure related to the units of a mandatory pension fund to be
established pursuant to subsection 12 (3) of this Act.
§ 27. Fees charged upon exchange of units of pension fund
(1) Upon the exchange of
units of a pension fund, a redemption fee and an issue fee, up to the amount
prescribed in the rules of the corresponding pension fund, shall be paid to the
pension management company for the units on behalf of the unit-holder.
(2) Unless otherwise provided
for in this section, the rate provided for in § 140 of the Investment Funds Act
applies upon calculation of the fees specified in subsection (1) of this
section.
(3) The rate of the
redemption fee and issue fee applied upon an exchange of units of a pension
fund may be less than the rate set out in subsection (2) of this section if
both pension funds involved in the exchange are managed by the same pension
management company.
Division 5
Succession of Units of Pension Fund
§ 28. Bases for succession
(1) Units of pension funds
are inheritable.
(2) Units of pension funds
can only be bequeathed to natural persons.
(3) In the case of a
successor with restricted active legal capacity, his or her legal
representative shall submit the application specified in subsection 29 (1) of
this Act.
(4) If a unit-holder has no
successors, any units of a pension fund which belonged to him or her shall be
cancelled, and § 18 of the Law of Succession Act (RT I 1996, 38, 752; 1999, 10,
155; 88, 807; 2001, 56, 336; 93, 565; 2002, 53, 336) does not apply. The rights
and obligations arising from the cancelled units are deemed to be extinguished,
and the money corresponding to the units shall remain in the pension fund.
(5) The registrar shall
cancel the units of a pension fund which are not redeemed or transferred into
the pension account of a successor pursuant to the provisions of §§ 29 and 30
of this Act within ten years as of the opening of the succession.
(6) The provisions of this
Act also apply to money transferred into a pension account for which units of a
pension fund have not been issued.
§ 29. Redemption and acquisition of inherited units of pension fund if
successor is obligated person
(1) A successor who is an
obligated person (hereinafter in this section successor) has, once within one
year as of issue of the succession certificate to him or her, the right to
submit an application for the redemption of all inherited units of the pension fund
or for the transfer thereof into his or her pension account. In such case, the
provisions of subsection 40 (1) of this Act do not apply.
(2) An application provided
for in subsection (1) of this section shall set out:
1) the name and personal
identification code of the successor; if this is not an Estonian personal
identification code, also a corresponding notation;
2) the contact details of
the successor;
3) the preferences of the
successor regarding the manner in which notices are to be submitted to him or
her and regarding the corresponding authority;
4) the name and personal
identification code of the bequeather;
5) the name of each pension
fund the units of which the successor wishes to transfer into his or her
pension account, and the number of such units;
6) the name of each pension
fund the units of which the successor wishes to redeem, and the number of such
units;
7) confirmation from the
successor that he or she agrees with the rules of the pension fund specified in
clause 5) of this subsection;
8) the number of the bank
account of the successor and the business name of the credit institution in
which the bank account is held;
9) information contained in
the succession certificate;
10) the date of submission of
the application;
11) the signature of the
successor.
(3) An application specified
in subsection (1) of this section may not be amended or withdrawn.
(4) If a successor has not
submitted an application for the redemption of units or for the transfer of
units into a pension account within the term specified in subsection (1) of
this section, he or she has the right to demand, within ten years as of the
opening of the succession, only that the inherited units be transferred into
his or her pension account. In order to so do, the successor shall submit an
application provided for in subsection (1) of this section and shall indicate
that the number of units to be redeemed is zero.
(5) The format of an
application for the redemption of units of a pension fund or for the transfer
of units into a pension account of a successor provided for in subsection (1)
of this section shall be established by a regulation of the Minister of
Finance, which may prescribe, if necessary, additional information to be set
out in an application in addition to that provided for in subsection (2).
§ 30. Redemption of inherited units of pension fund if successor is not
obligated person
(1) If a person who is not an
obligated person within the meaning of § 6 of this Act inherits units of a
mandatory pension fund, he or she has the right to demand that the units be
redeemed once within ten years as of the opening of the succession. In order to
redeem inherited units of a mandatory pension fund, an application provided for
in subsection 29 (1) of this Act shall be submitted.
(2) If a person specified in
subsection (1) of this section submits a choice application, the provisions of
§ 29 of this Act apply with regard to the person.
§ 31. Procedure for succession
(1) A standard format
application provided for in subsection 29 (1) of this Act and a succession
certificate shall be submitted to the account administrator.
(2) The account administrator
shall forward the corresponding application and a copy of the succession
certificate immediately to the registrar under the conditions and pursuant to
the procedure provided for in the Estonian Central Register of Securities Act
and legislation established on the basis thereof, and under the conditions and
pursuant to the procedure established by the registrar on the basis of the
specified Act and legislation.
(3) The redemption of
inherited units of a pension fund or transfer thereof into the pension account
of a successor shall be organised by the registrar within three working days as
of the receipt of the documents provided for in subsection (1) of this section
and pursuant to legislation, the pension fund rules and the contract entered
into by the registrar with the pension management company or the depositary.
Upon redemption of units of a mandatory pension fund,
the registrar shall make the payment to the person who inherited the units.
(22.11.06 entered into force 1.01.07 - RT I 2006, 56,
417)
(4) The registrar shall
refuse to grant an application specified in subsection 29 (1) of this Act if
the application does not comply with the requirements provided for in this Act.
The registrar shall notify the account administrator of refusal to grant the
application and of the reasons therefor. The account administrator shall
immediately notify the applicant thereof. In order to inherit units of a
pension fund, the person shall submit a new, valid application.
(5) The specific procedure
for the succession of units of a pension fund and of money provided for in
subsection 28 (6) of this Act shall be established by a regulation of the
Minister of Finance, by the procedure related to the units of a mandatory
pension fund to be established pursuant to subsection 12 (3) of this Act.
Division 6
Compensation for Loss Caused to Unit-holders of Pension Fund
§ 32. Bases for compensation for loss
(1) If the Financial
Supervision Authority ascertains that there has been a violation of the
requirements provided by legislation or the rules of a pension fund and there
is reason to believe that the violation has caused loss to the unit-holders of
the pension fund, the units of the pension fund (hereinafter own units)
belonging to the pension management company or the person who has operated as
the pension management company (hereinafter in this Division pension management
company) shall be redeemed, and new units shall be issued to the unit-holders
who have suffered the loss.
(2) A pension management
company shall determine the extent of the loss on the basis of all the
proprietary damage caused, including any loss of profit compared to the
situation that would exist if such violation had not occurred and where the
assets of the pension fund associated with the violation would have been
invested similarly to the other assets of the pension fund. The extent of the
loss shall be determined by the pension management company on the basis of a
precept of the Financial Supervision Authority provided for in subsection 33
(1) of this Act.
(3) Any loss caused to the
unit-holders provided for in § 62 of the Guarantee Fund Act shall not be
compensated for pursuant to the procedure provided for in this Division.
(4) The provisions of this
Division do not restrict claims for compensation for loss on other bases
provided by law.
§ 33. Precept to compensate for loss
(1) The Financial Supervision
Authority shall issue a precept to compensate for loss caused to the
unit-holders of a pension fund to the pension management company, and shall
forward a copy of the precept immediately to the registrar, the depositary of
the pension fund and the Guarantee Fund.
(2) A precept provided for in
subsection (1) of this section shall, among other matters, set out the
following:
1) description of the
violation;
2) the term during which
the pension management company is required to determine the extent of loss
caused to each unit-holder;
3) the term during which
the loss caused to units-holders by a pension management company must be
compensated for by the redemption of own units and the issue of new units to
unit-holders;
4) other circumstances
which the Financial Supervision Authority deems necessary.
§ 34. Application for redemption of own units and issue of units to
unit-holders
(1) The registrar shall
redeem own units and issue units provided for in subsection 35 (1) of this Act
on the basis of a corresponding application of the pension management company.
The application shall set out:
1) the name of the pension
management company;
2) reference to the precept
provided for in subsection 33 (1) of this Act which is the basis for the
application;
3) the amount of loss
caused to each unit-holder;
4) the methods for
determining the amount of loss caused;
5) the date of submission
of the application;
6) other circumstances
provided by legislation;
7) circumstances which are
deemed necessary by the pension management company.
(2) An application shall be
submitted to the Financial Supervision Authority not later than thirty days
before expiry of the term specified in clause 33 (2) 3) of this Act. If the
Financial Supervision Authority does not submit any objections within ten
calendar days after receipt of the application, the pension management company
shall submit the application to the registrar for execution. The pension
management company shall eliminate any deficiencies contained in the
application by the due date established by the Financial Supervision Authority.
§ 35. Procedure for redemption of own units and issue of units to
unit-holders
(1) From the money received
from the redemption of own units, units of the pension fund into which the
mandatory funded pension contributions made by a unit-holder who suffered loss
are or should be paid into, shall be issued to the unit-holder, to the extent
of the loss suffered. If the unit-holder has entered into an insurance contract
for a mandatory funded pension or if the unit-holder is deceased, units of the
pension fund into which his or her last mandatory funded pension contribution
was paid, shall be issued.
(2) If own units are
redeemed, no payments shall be made to the pension management company from the
pension fund.
(3) If own units are redeemed
under the conditions provided for in this Division, the redemption fee shall
not be charged. If units of pension funds managed by a pension management
company which has caused loss to unit-holders are issued under the conditions
provided for in this Division, the issue fee shall not be charged.
(4) The specific procedure
for the redemption of own units and the issue of units to unit-holders shall be
established by the procedure related to the units of a mandatory pension fund
to be established pursuant to subsection 12 (3) of this Act.
§ 36. Notification of compensation for loss
A pension management company is required, within three working days as
of receipt of a precept provided for in subsection 33 (1) of this Act, to
publish in at least one daily national newspaper and on its website or on the
website of the group in which the pension management company belongs, a notice
which sets out at least the following information:
1) the name of the pension
fund regarding which the precept for compensation for loss was issued;
2) the procedure for
notifying the unit-holders;
3) the terms specified in
clauses 33 (2) 2) and 3) of this Act.
Division 7
Units of and Contributions to Pension Fund upon Liquidation of Pension
Fund
§ 37. Acquisition of units of pension fund upon liquidation of pension
fund
(1) If a pension fund is
liquidated pursuant to the procedure provided for in §§ 174-187 of the
Investment Funds Act, every unit-holder shall acquire a number of units of a
new pension fund chosen by him or her corresponding to his or her part of the
amount of money to be distributed or, if the unit-holder fails to make such
choice, of a pension fund determined by the registrar on the basis of this
section or through the drawing of lots.
(2) A unit-holder shall
choose a new pension fund by submitting an application which complies with the
conditions provided for in subsections 16 (1) and (3) of this Act within two
months after publication of the liquidation notice in at least one daily
national newspaper, unless the Financial Supervision Authority specifies a
longer term.
(3) An application provided
for in subsection (2) of this section shall indicate:
1) the name of the
unit-holder;
2) the personal
identification code of the unit-holder;
3) the contact details of
the unit-holder;
4) the preferences of the
person regarding the manner in which notices are to be submitted to him or her
and regarding the corresponding authority;
5) the name of the pension
fund to be liquidated;
6) the name of the new
pension fund chosen;
7) confirmation from the
person that he or she has had access to the rules and prospectuses of all
registered mandatory pension funds;
8) confirmation that the
person agrees to the rules of the new pension fund chosen by him or her;
9) the date of submission
of the application;
10) the signature of the
unit-holder.
(4) An application provided
for in subsection (2) of this section shall be submitted to the account
administrator, who shall forward the information in the application immediately
to the registrar.
(5) If a unit-holder has
failed to submit an application provided for in subsection (2) of this section
during the prescribed term, the unit-holder shall acquire units of the pension
fund into which the mandatory funded pension contributions made by the unit-holder
are or should be paid as at the due date provided for in subsection (2) of this
section.
(6) If there is no pension
fund specified in subsection (5) of this section or the pension fund is a
pension fund to be liquidated, the registrar shall draw lots for the new
pension fund of the unit-holder from among the pension funds whose investment
strategy is similar to the investment strategy of the pension fund to be
liquidated according to subsections 76 (3)-(5) of the Investment Funds Act.
(7) The registrar shall draw
lots for the new pension fund of the unit-holder within five working days as of
expiry of the term for submission of an application provided for in subsection
(2) of this section.
§ 38. Deletion of units and issue of units of new pension fund
(1) The depositary of a
pension fund shall transfer money to be distributed among unit-holders
immediately after performance of all acts provided for in §§ 180 and 181 of the
Investment Funds Act into the account of the registrar in Eesti Pank. If the liquidator
of the pension fund is the pension management company or liquidators appointed
by the Financial Supervision Authority, the depositary of the pension fund
shall transfer the money to be distributed among unit-holders on the order of
the liquidator.
(2) At the earliest
opportunity, but not later than on the next working day after receipt of the
amount specified in subsection (1) of this section in the account of the
registrar, the registrar shall issue units of a new pension fund and delete
units of the pension fund to be liquidated simultaneously. The provisions of §
84 of the Investment Funds Act apply to the deletion of units belonging to a
pension management company.
(3) Before the units
specified in subsection (4) of this section are transferred into pension
accounts, the registrar shall separate from the amount specified in subsection
(1) of this section an amount corresponding to the units belonging to the
pension management company or to the person who has operated as the pension
management company, which shall remains in the account of the registrar in
Eesti Pank until the end of the liquidation of the mandatory pension fund.
(4) The registrar shall
transfer a corresponding number of units of new pension funds into pension
accounts in the Estonian Central Register of Securities in the amount specified
in subsection (1) of this section from which the amount specified in subsection
(3) has been separated.
(5) At the same time as units
are transferred into pension accounts in the Estonian Central Register of
Securities, the registrar shall transfer amounts which correspond to the net
asset values of the units transferred into the pension accounts into the bank
accounts of the new pension funds in their depositaries.
(6) If units are deleted, the
redemption fee shall not be charged.
§ 39. Contributions upon liquidation of pension fund
(1) If the issue of units of
a pension fund to be liquidated is suspended on the basis of subsection 180 (3)
of the Investment Funds Act, the money provided for in clause 18 1) of this Act
shall be paid into the bank account of the registrar in Eesti Pank.
(2) As of the day following
the date of drawing lots for a new pension fund provided for in subsection 37
(7) of this Act, a unit-holder shall acquire units of the new pension fund set
out in subsection 37 (2) of this Act or determined on the bases provided for in
subsections 37 (5)-(7) of this Act for the money specified in subsection (1) of
this section and subsequent contributions.
(3) A unit-holder can
commence making contributions to another pension fund pursuant to the procedure
provided for in § 21 of this Act.
Division 8
Mandatory Funded Pension Payments
Subdivision 1
General Provisions
§ 40. Entitlement to mandatory funded pension payments
(1) Unit-holders who meet the
following requirements are entitled to mandatory funded pension payments:
1) the person has reached
the pensionable age provided for in the State Pension Insurance Act (RT I 2001,
100, 648; 2002, 53, 336 and 338; 61, 375; 2003, 20, 116; 48, 343; 82, 549; 88,
589; 2004, 16, 120) and
2) the person receives a
state pension on the basis of the State Pension Insurance Act or another
Estonian Act.
(2) The requirement provided
for in clause (1) 2) of this section does not apply to persons who are not entitled
to a pension on the basis of the Acts specified in the said clause.
§ 41. Mandatory funded pension payments on basis of insurance contract
(1) In
order to receive a mandatory funded pension, a person entitled to such pension
shall enter into an insurance contract for a mandatory funded pension
(hereinafter in this Chapter contract) with an insurer chosen by the person who
has the right for to engage in insurance activities in Estonia of this Act. In
the cases provided for in § 42 of this Act, a contract shall not be entered
into.
(8.12.04 entered into force 01. 01.2005 - RT I 2004, 90, 616)
(2) After entry into a
contract, the person shall pay the insurer, as a single premium, the redemption
price of all the redeemed units of pension funds which belonged to the person
(hereinafter total amount of units) unless otherwise provided for in § 43 of
this Act.
(3) Payments shall be made
periodically to the policyholder on the basis of the contract in equal amounts
(hereinafter annuity) at least once every three months until the death of the
policyholder. The amounts of the payments may differ only by the amount of
additional interest.
(4) Upon acquisition of units
of a pension fund after entry into a contract, the person who has entered into
the contract has the right to amend the contract and pay the additional
insurance premium or the right to receive payments from a pension fund on the
basis of § 43 of this Act.
(5) Upon amendment of a
contract provided for in subsection (4) of this section, a new annuity shall be
calculated.
§ 42. Payments from pension fund
(1) If, upon entry into a
contract, the annuity per calendar month calculated on the basis of the total
amount of units proves to be less than one quarter of the national pension rate
established on the basis of the State Pension Insurance Act (hereinafter
national pension rate), the person is entitled to periodic funded pension
payments from a pension fund.
(2) The amount payable per
calendar month to a person as periodic payments from all pension funds shall
not exceed one quarter of the national pension rate. A person has the right to
request that payments be made at least once every three months.
(3) If the total amount of
units is smaller or the total amount of units is reduced as a result of periodic
payments made on the basis of subsection (2) of this section to less than three
times the national pension rate, the person has the right to request the
redemption of all units as a single payment.
§ 43. Additional payments from pension fund
(1) If the annuity per
calendar month calculated on the basis of the total amount of units is greater
than three times the national pension rate, the person is entitled to periodic
funded pension payments from a pension fund to the extent of the amount
exceeding the said pension rate. Periodic payments shall only be made to
persons who have entered into a contract.
(2) The amount payable per
calendar month to a person as a periodic payment from a pension fund and the
procedure for the payment thereof shall be determined by the Minister of
Finance by the procedure related to the units of a mandatory pension fund to be
established pursuant to subsection 12 (3) of this Act.
(3) If the total amount of
units remaining after entry into a contract or after making periodic payments
is less than three times the national pension rate, the person has the right to
request the redemption of all units as a single payment.
§ 44. Mandatory funded pension payments upon death of person
(1) Upon making payments from
a mandatory pension fund, the provisions of §§ 28-31 of this Act apply if the
unit-holder of the pension fund dies.
(2) If a policyholder dies,
payments made on the basis of the contract shall be terminated. A guaranteed
period may be prescribed in the contract during which the insurer shall make
payments to a beneficiary designated by the policyholder in the contract.
§ 441. Redemption of units upon
commencement of employment by institutions of European Community
(1) An
obligated person who meets the conditions provided by the Council Regulation
specified in subsection 101 (1) of this Act has the right for
redemption of all the pension units belonging to him or her and to enter the
total amount of the units in the pension scheme of the institution of the
European Community pursuant to the procedure provided by subsection 12 (21)
of the State Pension Insurance Act.
(2) All the
expenses related to the redemption of the units and making of the transfer
specified in subsection (1) of this section shall be borne by the obligated person.
(28.11.07 entered into force 01.01.2000 - RT I 2007, 62, 395)
Subdivision 2
Payments Pursuant to Contract
§ 45. Bases for entry into contract
(1) Under the conditions
provided for in this Act, a unit-holder may request that the units of a pension
fund be redeemed and a contract corresponding to the total amount of units be
entered into.
(2) Entry into a contract
under the conditions provided for in this Subdivision is not permitted if the
redemption of units of a pension fund is suspended pursuant to the Investment
Funds Act.
§ 46. Contract and its terms
(1) A contract is an
insurance contract with the mandatory terms provided for in this Act, the
purpose of which is to ensure that a policyholder receives periodic payments as
of the date designated in the contract pursuant to the provisions of subsection
41 (3) of this Act.
(2) Pursuant to a contract,
only a natural person can be a policyholder. The policyholder and the insured
shall be the same person.
(3) The proprietary rights
arising from a contract shall not be security for a loan or encumbered in any
other way.
(4) The annual interest rate
used upon the calculation of annuity shall not exceed 3 per cent.
(5) The limit of technical
profit arising from contracts payable to policyholders by insurers shall be
established by a regulation of the Minister of Finance. Insurers shall obtain
approval from the Financial Supervision Authority for methods of calculation
used to determine technical profit arising from contracts.
(6) Upon entry into
contracts, insurers shall apply a uniform mortality table for both men and
women.
(7) Upon entry into a
contract, the parties may only agree on terms which do not contradict the
provisions of this Act.
§ 47. Payments pursuant to contract
(1) Payments pursuant to a contract
shall commence on the due date specified in the contract (hereinafter in this
Subdivision pensionable age) but not before the insured reaches retirement age.
(2) Payments shall be made at
least once per quarter on the date specified in the contract.
(3) Payments shall be made
until the death of the insured, including for the period of payment during
which the insured dies.
(4) The amount of the
payments made pursuant to a contract shall be determined upon entry into the
contract. Upon payment of an additional insurance premium according to
subsection 41 (4) of this Act, a new amount shall be determined for payments
made pursuant to the contract.
§ 48. Guaranteed period
(1) A contract may prescribe
a guaranteed period which shall be not shorter than five years as of attainment
of pensionable age.
(2) Within the meaning of
this Act, a guaranteed period is a period of time for which a contract
specifies a beneficiary or beneficiaries who are entitled to payments made
pursuant to the contract if the insured dies during the guaranteed period. A
legal person cannot be a beneficiary.
(3) In the case of a
guaranteed period, payments shall be made until the end of the guaranteed
period, including for the period of payment during which the guaranteed period
ends.
(4) The insured has the
right, at any time, to name another person to replace the beneficiary specified
in the contract.
(5) If a beneficiary who
receives payments pursuant to a contract dies before the end of the guaranteed
period, the balance of the technical provision shall form part of his or her
estate.
(6) The balance of the
technical provision shall be subject to succession only in the case provided
for in subsection (5) of this section.
§ 49. Procedure for redemption of units upon entry into contract and
payment of additional insurance premium
(1) Upon entry into a
contract and also upon payment of an additional insurance premium provided for
in subsection 41 (4) of this Act, a unit-holder of a pension fund shall, after
entry into or amendment of the contract, submit a standard format application
for the redemption of units to the account administrator or registrar
(hereinafter in this section application). Applications are subject to the
provisions of subsections 16 (1)-(4) and (6) of this Act.
(2) A copy of the contract as
entered into or amended shall be appended to an application. The following
shall be set out in the application:
1) the name of the
unit-holder;
2) his or her personal
identification code;
3) the contact details of
the unit-holder;
4) the name of each pension
fund the units of which the unit-holder wishes to redeem;
5) the number of units the
unit-holder wishes to redeem;
6) the name of the insurer
with whom the unit-holder has entered into an insurance contract for a
mandatory funded pension;
7) the date of submission
of the application;
8) the signature of the
unit-holder.
(3) The format of
applications shall be established by a regulation of the Minister of Finance,
which may prescribe, if necessary, additional information to be set out in an
application in addition to that provided for in subsection (2) of this section.
(4) In co-operation with the
depositary of the pension fund and the insurer specified in the application,
the registrar shall organise the redemption of units and the transfer of the
insurance premium to the insurer within fifteen working days.
(5) The registrar shall
refuse to grant an application if:
1) the application does not
meet the requirements provided for in this section;
2) information set out in
the application or contract is inaccurate or contradictory;
3) granting the application
would contradict the provisions of §§ 41 or 45 of this Act.
(6) Upon refusal to grant an
application, the registrar shall notify the applicant or the account
administrator and the corresponding insurer immediately thereof and of the
reasons therefor by forwarding an electronic error notice through the
information system. The account administrator shall immediately forward the
error notice to the applicant.
(7) An error notice provided
for in subsection (6) of this section shall include:
1) the legal basis for
refusal to redeem units;
2) the reasons for refusal
to redeem units;
3) a reference to the
possibilities for, place of and terms and procedure for contesting the decision
on refusal to redeem units;
4) the date of forwarding
the error notice.
(8) The specific conditions
for the redemption of units of a pension fund and the procedure for entry into
a contract may be established by a regulation of the Minister of Finance.
Subdivision 3
Payments from Pension Fund
§ 50. Conditions for making payments
(1) Payments from a pension
fund in the cases provided for in §§ 42 and 43 of this Act shall be made by
redemption of units of the pension fund for the redemption price provided for
in § 138 of the Investment Funds Act (hereinafter redemption price).
(2) A unit-holder is entitled
to periodic payments only, unless otherwise provided for in subsection 42 (3)
or 43 (3) of this Act.
(3) If a unit-holder does not
request payments to be made to which the unit-holder is entitled or waives
payment in part, he or she has the right to request the redemption of
unredeemed units during subsequent periods of payment.
(4) No payments shall be made
if redemption of the units of a pension fund is suspended pursuant to § 145 or
subsection 180 (3) of the Investment Funds Act.
(5) Upon redemption of units
of a pension fund, a redemption fee for units shall be charged pursuant to the
provisions of §§ 139 and 140 of the Investment Funds Act.
§ 51. Application for payments
(1) In order to receive
payments, a unit-holder specified in § 40 of this Act shall submit a standard
format application to the account administrator or registrar (hereinafter in
this Subdivision application). Applications are subject to the provisions of
subsections 16 (1)-(4) and (6) of this Act.
(2) The following shall be
set out in an application:
1) the name of the
unit-holder;
2) his or her personal
identification code;
3) the contact details of
the unit-holder;
4) the name of each pension
fund from which the unit-holder wishes to receive payments;
5) the number of units the
unit-holder wishes to redeem;
6) the number of the bank
account of the unit-holder and the business name of the credit institution in
which he or she holds a bank account;
7) the frequency of the
periodic payments;
8) the date of submission
of the application;
9) the signature of the
unit-holder.
(3) In the case provided for
in § 43 of this Act, a copy of the insurance contract for a mandatory funded
pension entered into by the person shall be appended to the application.
(4) The format of
applications shall be established by a regulation of the Minister of Finance,
which may prescribe, if necessary, additional information to be set out in an
application in addition to that provided for in subsection (2) of this section.
§ 52. Procedure for making payments
(1) The registrar shall
organise the making of payments pursuant to the procedure provided for in this
Act, legislation issued on the basis thereof and the pension fund rules.
(2) In order to make payments
or specify conditions therefor, the registrar may request that additional or
more specific information be submitted by a unit-holder who submits an
application or by the corresponding insurer.
(3) The redemption of units
of a pension fund shall be organised by the registrar within three working days
as of the receipt of an application for the making of payments and pursuant to
legislation, the pension fund rules and a tripartite contract entered into
between the registrar, the pension management company and the depositary of the
pension fund.
(4) The registrar shall
refuse to make a payment if:
1) the application
submitted or forwarded through the account administrator to the registrar is
not in compliance with the requirements provided for in this Act;
2) it is not possible to
make payments on the basis of the application;
3) information set out in
the application is inaccurate or contradictory;
4) granting the application
contradicts the provisions of §§ 42, 43 or 50 of this Act.
(5) Upon refusal to make
payments, the registrar shall notify the applicant or the account administrator
immediately thereof and of the reasons therefor by forwarding an electronic
error notice through the information system. The account administrator shall
immediately forward the error notice to the applicant.
(6) An error notice provided
for in subsection (5) of this section shall include:
1) the legal basis for
refusal to make payments;
2) the reasons for refusal
to make payments;
3) a reference to the
possibilities for, place of and terms and procedure for contesting the decision
on refusal to make payments;
4) the date of forwarding
the error notice.
(7) Specific conditions for
the redemption of units for making payments from a pension fund and the
specific procedure for making payments may be established by a regulation of
the Minister of Finance.
Chapter 3
Supplementary Funded Pension
Division 1
General Provisions
§ 53. General provisions
(1) In order to receive a
supplementary funded pension, a person shall acquire units of a voluntary
pension fund chosen by the person or enter into an insurance contract for a
supplementary funded pension with an insurer chosen by the person.
(2) A person may own and
acquire units of several different voluntary pension funds and enter into
insurance contracts for a supplementary funded pension with one or several
insurers at the same time.
(3) Supplementary funded
pensions shall be paid under the conditions and pursuant to the procedure
provided for in this Act, in the rules of the voluntary pension funds and in
the insurance contracts for supplementary funded pensions.
Division 2
Voluntary Pension Fund
§ 54. Contributions to voluntary pension fund
(1) Upon making a
contribution to a voluntary pension fund, a person shall acquire a number of
units issued by the management company of the voluntary pension fund
corresponding to the amount of the contribution. The minimum amount for a
single contribution shall not exceed 500 kroons.
(2) The provisions of
subsections 19 (5) and (6) of this Act concerning mandatory pension funds apply
to the making of supplementary funded pension contributions to a voluntary
pension fund.
§ 55. Bases for exchange of units of voluntary pension fund
(1) Under the conditions and
pursuant to the procedure provided for in §§ 56 and 57 of this Act, units of a
voluntary pension fund may be exchanged only for units of another voluntary
pension fund.
(2) The provisions of
subsections 23 (2)-(4) and § 26 of this Act concerning exchange of units of
mandatory pension funds apply to the exchange of units of voluntary pension
funds.
§ 56. Terms and conditions for exchange of units of voluntary pension
funds
(1) In order to exchange the
units of a voluntary pension fund, a unit-holder must own at least 1000 units
in the pension fund at the time of submitting the application provided for in
subsection 57 (1) of this Act.
(2) The rules of a voluntary
pension fund may prescribe:
1) the minimum number of
units exchanged at any one time, which shall not exceed 1000 units;
2) a minimum term
commencing as of an exchange of units and after the expiry of which a
unit-holder may request another exchange of units. This term shall not exceed
two years.
§ 57. Procedure for exchange of units of voluntary pension funds
(1) In order to exchange
units of a voluntary pension fund, a unit-holder shall submit a written
application to the pension management company.
(2) The following shall be
set out in an application:
1) the name of the
unit-holder;
2) his or her personal
identification code;
3) the name of the pension
fund the units of which the unit-holder wishes to exchange;
4) the number of units the
unit-holder wishes to exchange;
5) the name of the pension
fund the units of which the unit-holder wishes to acquire;
6) other information
prescribed in the pension fund rules and legislation;
7) the date of submission
of the application;
8) the signature of the
unit-holder.
(3) The exchange of units of
a voluntary pension fund shall be organised by the depositary of the pension
fund during the terms and pursuant to the procedure prescribed in the pension
fund rules, but not later than two months after submission of an application
specified in subsection (1) of this section.
(4) The provisions of § 27 of
this Act apply to fees charged upon exchange of units of voluntary pension
funds, whereupon the amount of the redemption fee may differ depending on the
time of acquisition of the units of the voluntary pension fund which are to be
exchanged.
§ 58. Succession and redemption of units of voluntary pension fund
(1) In the event of the death
of a unit-holder of a voluntary pension fund, a successor has the right to
demand transfer of all the inherited units or of a part thereof into the
securities account of the successor, or the redemption of the units.
(2) In order to redeem units,
a successor shall submit an application and a succession certificate to the
pension management company.
(3) Subsection 61 (1) of this
Act does not apply upon succession of units of a voluntary pension fund.
(4) If a unit-holder of a
voluntary pension fund has no successors, any units which belonged to him or
her shall be cancelled, and § 18 of the Law of Succession Act does not apply.
The rights and obligations arising from the cancelled units are deemed to be
extinguished and the money corresponding to the units shall remain in the
pension fund.
§ 59. Redemption of units of mandatory pension fund at request of legal
person
(1) A successor who is a
legal person has the right to demand monetary payment for each unit inherited
by the successor in the amount of the redemption price on the date the demand
is submitted.
(2) A successor who is a
legal person loses the right specified in subsection (1) of this section if the
successor does not demand redemption of the inherited units of the pension fund
within one year after the day following the date of opening of the succession.
(3) Money which is not
claimed within the term provided for in subsection (2) of this section shall
remain in the pension fund, and the corresponding units shall be cancelled.
§ 60. Bases for making payments from voluntary pension fund
(1) Payments from a voluntary
pension fund upon payment of a supplementary funded pension shall be made
pursuant to the provisions of § 61 of this Act for the redemption price
provided for in § 138 of the Investment Funds Act.
(2) The provisions of
subsections 50 (4) and (5) of this Act concerning mandatory pension funds apply
to the making of payments from voluntary pension funds.
(3) Upon liquidation of a
voluntary pension fund, payments shall be made pursuant to the provisions of
the Investment Funds Act.
(4) Upon succession of units
of a voluntary pension fund, payments shall be made under the conditions and
pursuant to the procedure provided for in §§ 58 and 59 of this Act.
§ 61. Payments from voluntary pension fund
(1) A unit-holder is entitled
to funded pension payments from a voluntary pension fund (hereinafter in this
section payments) under the conditions provided for in this section, but not
before two years have passed since acquisition of the units which are redeemed
in order to make the payments. If units of a voluntary pension fund are
exchanged for units of another voluntary pension fund, the two-year term shall
be calculated as of acquisition of the units redeemed upon the exchange.
(2) For the purposes of
subsection (1) of this section, the acquisition of units into the joint
property of spouses is deemed to be the acquisition of units by a unit-holder
even if such joint property is later divided.
(3) Upon making payments
before the unit-holder has attained 55 years of age or in cases where the
unit-holder is not completely and permanently incapacitated for work, the
pension management company shall withhold 2 per cent of the net asset value of
the units in addition to the redemption fee. The amount withheld shall remain
in the pension fund.
(4) The provisions of § 27 of
this Act apply to fees charged upon making payments from voluntary pension
funds, whereby the amount of the redemption fee may differ depending on the
time of acquisition of the units which are to be redeemed.
(5) Upon making payments,
units shall be redeemed in the order in which the units were acquired.
Division 3
Insurance Contract for Supplementary Funded Pension
§ 62. Insurance contract for supplementary funded pension
(1) An insurance contract for
a supplementary funded pension (hereinafter in this Division contract) is an
insurance contract with the mandatory terms provided for in this Act, which
provides for the payment of a pension to an insured person from the due date
designated in the contract.
(2) Insurers who deal in life
insurance and to whom an activity licence for pension insurance has been issued
pursuant to the Insurance Activities Act have the right to enter into
contracts.
§ 63. Mandatory conditions of contract
(1) The policy holder and the
insured shall be natural persons.
(2) A policyholder is
required, pursuant to the contract, to pay insurance premiums pursuant to the
procedure prescribed by law and in the contract. The insurer is required to pay
a pension pursuant to the procedure provided for in the contract from the due
date provided for in the contract.
(3) The payment of a pension
may commence at the time provided for in the contract (hereinafter in this
section pensionable age) but not before the policyholder has attained 55 years
of age, or, in the event of the total and permanent incapacity for work of the
policyholder, as of the verification of such incapacity.
(4) A pension shall be paid
periodically at least once every three months until the death of the
policyholder, unless otherwise prescribed in the contract.
(5) A policyholder has the
right to cancel a contract at any time until he or she attains pensionable age.
(6) The proprietary rights
arising from a contract shall not be security for a loan or encumbered in any
other way.
(7) Upon entry into a
contract, the parties may only agree on terms which do not contradict the
provisions of this Act.
(8) In the event of the death
of a policyholder, payments shall be made to a beneficiary designated by the
policyholder pursuant to the conditions determined in the insurance contract
for a supplementary funded pension.
§ 64. Redemption of units upon entry into contract
(1) Under the conditions
provided for in this Act, a unit-holder may demand that the units of a
voluntary pension fund be redeemed and a contract be entered into for the
redemption price of the units (hereinafter in this Division redemption of
units).
(2) A unit-holder of a
voluntary pension fund has the right to demand the redemption of units if the
unit-holder is at least 55 years of age or in the event of the total and
permanent incapacity for work of the unit-holder.
(3) The provisions of
subsection 45 (2) of this Act concerning mandatory pension funds apply to the
redemption of units.
(4) No payments shall be made
to unit-holders from a voluntary pension fund upon the redemption of units.
§ 65. Procedure for redemption of units
(1) In order to redeem units,
a unit-holder of a voluntary pension fund shall submit an application to the
pension management company.
(2) The following shall be
set out in an application:
1) the name of the
unit-holder;
2) his or her personal
identification code;
3) the number of units the
unit-holder wishes to redeem in order to enter into a contract;
4) the name of the insurer
with whom the unit-holder intends to enter into a contract;
5) the amount of the single
premium payable to the insurer pursuant to the contract;
6) other information prescribed
in the pension fund rules and legislation;
7) the date of submission
of the application;
8) the signature of the
unit-holder.
(3) The redemption of units
and transfer of the insurance premium prescribed in the contract to the insurer
specified in clause (2) 4) of this section shall be organised by the depositary
of the pension fund and approved by the insurer during the terms and pursuant
to the procedure prescribed in the pension fund rules, but not later than two
months after submission of an application specified in subsection (1) of this
section
Chapter 4
Implementing Provisions
§ 66. Implementation of obligation to make contribution
(1) Persons born before 1
January 1983 are not required to make contributions to a mandatory funded
pension.
(2) Persons specified in
subsection (1) of this section are entitled to make contributions to a
mandatory funded pension and to acquire units of a mandatory pension fund if
they submit a choice application as follows:
1) persons born in
19421956, not later than 31 October 2002;
2) persons born in
19571961, not later than 31 October 2003;
3) persons born in
19621964, not later than 31 October 2004;
4) persons born in
19651967, not later than 31 October 2005;
5) persons born in
19681970, not later than 31 October 2006;
6) persons born in
19711973, not later than 31 October 2007;
7) persons born in
19741976, not later than 31 October 2008;
8) persons born in
19771979, not later than 31 October 2009;
9) persons born in
19801982, not later than 31 October 2010.
(3) The provisions of this
Act concerning obligated persons together with the specifications arising from
this section and subsection 70 (1) of this Act apply to persons who have
submitted a choice application specified in subsection (2) of this section.
(4) A person specified in
subsection (3) of this section has the right and obligation to make
contributions to a mandatory funded pension as of 1 January of the year
following the year during which the choice application is submitted, provided
that the choice application is submitted by 31 October at the latest. A person
who has submitted a choice application between 1 November and 31 December is
required to make contributions as of 1 January of the second year following
submission of the application.
(5) If a choice application
is submitted according to the conditions provided for in subsections (2) and
(4) of this section, but the registrar has received the information set out in
the choice application after 31 October of the year of submission of the choice
application, the right and obligation to make contributions to a mandatory
funded pension arise as of 1 January of the year following the year of receipt
of the information.
(6) A choice application
which has been submitted cannot be withdrawn. A person may amend his or her
application until 31 October of the year preceding the year when the obligation
to make contributions arises.
(7) Obligated persons born in
1983 have the right and obligation to make contributions to a mandatory funded
pension as of 1 July 2002.
(8) A payer of social tax
provided for in § 4 of the Social Tax Act shall check with the Estonian Central
Register of Securities whether a person specified in subsection (1) of this
section is required to make contributions to a mandatory funded pension.
(9) Additional contributions
specified in subsection 10 (1) of this Act to a mandatory pension fund shall be
made for a person specified in subsection (4) of this section during the period
of payment of the benefit specified in subsection 10 (1) of this Act as of the
grant of the benefit but not before 1 January of the year following the year
during which the choice application is submitted, provided that the choice
application is submitted and the information set out in the application is
received by the registrar by 31 October at the latest.
(10) The
rights provided by §§ 101 and 441 of this Act shall
extend to all applications for the transfer of pension funds which are
submitted after 1 May 2004.
(28.11.07 entered into force 01.01.2000 - RT I 2007, 62, 395)
§ 67. Making of contributions to mandatory funded pension by sole
proprietors
Obligated persons who are sole proprietors shall make contributions to a
mandatory funded pension on business income starting with business income from
2004.
§ 68. Specification for exchange of units of pension funds
Units of mandatory pension funds may be exchanged as of 1 January 2005
pursuant to the procedure provided for in this Act.
§ 69. Specification for succession of units of mandatory pension funds
Payments from mandatory pension funds made pursuant to subsections 29
(1) and 30 (1) of this Act shall not be made before 1 January
§ 70. Specifications for payments
(1) Persons provided for in
subsection 66 (2) of this Act who have submitted a choice application are
entitled to mandatory funded pension payments if at least five years have
passed since 1 January of the year following the year during which the person
commenced making contributions.
(2) Payments from mandatory
pension funds shall not be made and contracts provided for in § 41 of this Act
shall not be entered into before 1 January 2009 unless otherwise provided for
in § 69 of this Act.
§ 71. Limit of issue fee
Until 1 January 2007, the issue fee rate of units of pension funds shall
not exceed 3 per cent.
§ 72. Repeal of Funded Pensions Act
(1) The Funded Pensions Act
(RT I 2001, 79, 480; 2002, 23, 131; 44, 284; 102, 600; 105, 612; 111, 662;
2003, 82, 549; 88, 591) is repealed.
(2) Legislation specified in
subsection 10 (5) of the Social Tax Act which is provided for in clauses 10 (1)
3) and 4), subsection 11 (3), subsection 13 (2), subsection 14 (5), subsection
35 (6), subsection 53 (3), subsection 66 (2), subsection 80 (2), subsection 120
(4), subsection 127 (12), subsection 131 (4), subsection 133 (6), subsection
139 (4) and clause 156 2) of the Act specified in subsection (1) of this
section remain valid until they are repealed.
Chapter 5
Amendment of Acts and Entry into Force of Act
§ 73. Amendment of Social Tax Act
The Social Tax Act (RT I 2000, 102, 675; 2001, 50, 285; 59, 359; 79,
480; 91, 544; 95, 587; 2002, 44, 284; 62, 377; 111, 662; 2003, 82, 549; 88, 587
and 591) is amended as follows:
1) section 10 is amended by
adding subsections (31) and (41) worded as follows:
«(31) If, pursuant to
the Funded Pensions Act, a sole proprietor is required to make contributions
for a mandatory funded pension, social tax calculated on remuneration specified
in clause 2 (1) 5) of this Act shall be transferred pursuant to subsection (41)
of this section.
(41) In the case
provided for in subsection (31) of his section, the Tax and Customs
Board shall transfer the amounts corresponding to the state pension insurance
part and state health insurance part of social tax received that have been paid
into the special social tax account, into the state pension insurance funds and
the state health insurance funds of the state budget within fifteen working
days. The Tax and Customs Board shall transfer the mandatory funded pension
part of social tax into the bank account of the registrar of the Estonian
Central Register of Securities in Eesti Pank within fifteen working days after
the term provided for in clause 9 (3) 2) of this Act. The rate of social tax
transferred into the state pension insurance funds shall be 16 per cent, the
rate of social tax transferred into the state health insurance funds shall be
13 per cent, and the rate of social tax transferred into the bank account of
the registrar of the Estonian Central Register of Securities shall be 4 per
cent.;
2) subsection 10 (5) is
repealed;
3) the existing text of §
11 is considered subsection (1), and the section is amended by adding
subsections (2) and (3) worded as follows:
«(2) Concurrently with the
transfer of social tax specified in subsections 10 (4) and (41) of
this Act, the Tax and Customs Board shall forward to the registrar of the
Estonian Central Register of Securities the following information concerning
persons whose amounts were transferred to the registrar of the Estonian Central
Register of Securities:
1) the name of the person;
2) his or her personal
identification code;
3) the amount of the part
of social tax transferred to the registrar of the Estonian Central Register of
Securities;
4) the registry code or the
personal identification code of the payer of social tax.
(3) The procedure for the
forwarding of information to the registrar of the Estonian Central Register of
Securities and transfer of amounts specified in subsections 10 (4) and (41)
of this Act, and for the correction of errors related thereto shall be
established by a regulation of the Minister of Finance."
§ 74. Amendment of Guarantee Fund Act
The Guarantee Fund Act (RT I 2002, 23, 131; 57, 357; 102, 600) is
amended as follows:
1) in subsection 61 (1),
the reference § 127 of the Funded Pensions Act (RT I 2001, 79, 480; 2002, 23,
131) is substituted by the reference §§ 32-36 of the Funded Pensions Act (RT
I 2004, 37, 252);
2) in subsection 61 (2),
the reference subsection 127 (1) is substituted by the reference subsections
32 (1) and (2);
3) in subsection 67 (2),
the reference §
4) in subsection 70 (1),
the reference clause 127 (3) 3) is substituted by the reference clause 33
(2) 3);
5) in subsection 70 (2),
the reference clause 127 (3) 3) is substituted by the reference clause 33
(2) 3);
6) in subsection 70 (3),
the reference subsection 127 (4) is substituted by the reference subsection
34 (1).
§ 75. Amendments to Income Tax Act
The Income Tax Act (RT I 1999, 101, 903; 2001, 11, 49; 16, 69; 50, 283;
59, 359; 79, 480; 91, 544; 2002, 23, 131; 41, 253; 44, 284; 47, 297; 62, 377;
111, 662; 2003, 18, 105; 58, 387; 82, 549; 88, 587 and 591) is amended as
follows:
1) in the Act, the words §
152 of the Funded Pensions Act are substituted by the words § 63 of the
Funded Pensions Act in the appropriate case form;
2) clause 21 (3) 1) is
amended and worded as follows:
«1) payments made after the
unit-holder has reached 55 years of age but not before five years have passed
since the acquisition of units which are redeemed in order to make the
payments;;
3) section 21 is amended by
adding subsection (31) worded as follows:
«(31) If units of a
voluntary pension fund are exchanged for units of another voluntary pension
fund, the five-year term shall be calculated as of acquisition of the units of
the voluntary pension fund which are redeemed upon the exchange.;
4) in clause 28 (1) 2), the
words §§ 39 and 46 of the Funded Pensions Act are substituted by the words
§§ 56 and 65 of the Funded Pensions Act;
5) section 281
is amended and worded as follows:
Ǥ 281. Contributions to mandatory funded pension
Contributions to a mandatory funded pension withheld pursuant to clauses
11 (1) 1) and 2) and calculated and paid pursuant to subsection 11 (2) of the
Funded Pensions Act shall be deducted from the income of a resident natural
person during a period of taxation.;
6) section 34 is amended by
adding clause 12) worded as follows:
«12) contributions to a
mandatory funded pension made by a sole proprietor on the basis of subsection
11 (2) of the Funded Pensions Act.;
7) in subsection 42 (6),
the words clauses 10 (1) 1) and 2) of the Funded Pensions Act are substituted
by the words clauses 11 (1) 1) and 2) of the Funded Pensions Act.
§ 76. Amendment of Insurance Activities Act
The Insurance Activities Act (RT I 2000, 53, 343; 2001, 43, 238; 48,
268; 59, 359; 87, 529; 93, 565; 2002, 35, 215; 63, 387; 102, 600; 105, 612;
2003, 17, 95; 2004, 14, 90) is amended as follows:
1) sections 10-17 are
amended and worded as follows:
Ǥ 10. Activity licence
(1) In order to engage in
insurance activities, a person shall hold a relevant activity licence
(hereinafter activity licence).
(2) The Financial Supervision
Authority shall issue, amend and revoke activity licences.
(3) Activity licences are
issued for an unspecified term.
(4) Activity licences are not
transferable, and the acquisition or use thereof by other persons is
prohibited.
§ 11. Scope of activity licences
(1) An activity licence shall
be issued for engaging in one or several classes of insurance or, at the
request of the applicant for the activity licence, for engaging in one or
several subclasses of insurance.
(2) An insurer may engage in
only such classes or subclasses of insurance for which an activity licence has
been issued to the insurer.
(3) In addition to the
provisions of subsection (2) of this section, an insurer may engage in classes
or subclasses of insurance without applying for an additional activity licence
therefor if the risk additionally insured by the insurer is related to the
object insured on the basis of the class or subclass of insurance indicated in
the activity licence, and the specified risk and object are insured on the
basis of the same insurance contract.
(4) The provisions of
subsection (3) of this section do not apply to classes of credit insurance,
suretyship insurance and legal expenses insurance, unless the legal expenses
insurance is an additional class of assistance insurance.
(5) An insurer shall not be
simultaneously engaged in classes or subclasses of life insurance and non-life
insurance.
(6) An insurer may be
simultaneously engaged either in life insurance and the reinsurance of life
insurance or non-life insurance and the reinsurance of non-life insurance.
§ 12. Application for activity licence
(1) In order to apply for an
activity licence, a written application of the members of the management board
of the applicant set out in the memorandum of association of the public limited
company or, in the case of an operating public limited company, entered in the
registry card of the commercial register, and the following documents and
information shall be submitted:
1) the articles of
association and, in the case of an operating public limited company, also the
resolution of the general meeting on amendment of the articles of association
and the amended text of the articles of association;
2) upon foundation of a
public limited company, a notarised copy of the foundation agreement or
foundation resolution and a notice issued by a credit institution regarding the
payment of share capital;
3) a scheme of operations
which complies with the requirements provided for in § 14 of this Act;
4) the general terms of
insurance contracts if the activity licence is applied for engaging in
compulsory insurance;
5) information on the
members of the management board and supervisory board of the applicant which
includes each person's given name and surname, personal identification code or
date of birth in the absence of a personal identification code, residence,
educational background, a complete list of places of employment and positions
held during the last five years and, in the case of members of the management
board, a description of the area of responsibility of the specified persons;
6) information on the
auditor and internal auditor of the applicant, including their name, residence
or seat, personal identification code or, in the absence of the identification
code, the date of birth or registry code;
7) a list of the
shareholders which sets out the name, the personal identification code or
registry code of each shareholder, or the date of birth in the absence of a
personal identification code or registry code, and information on the amount of
contribution, number of shares and votes of each shareholder;
8) information specified in
§ 32 of this Act on shareholders who directly or indirectly hold more than 10
per cent of the votes represented by shares of the applicant;
9) information on companies
in which the holding of the applicant or any member of its management board or
supervisory board exceeds 20 per cent, which also sets out the amount of share
capital of the company, a list of the areas of activity and the size of the
holding of the above-mentioned persons;
10) if the person with a
qualifying holding in the applicant belongs to a group, a description of the
structure of the group and the last annual report of the parent company of the
person with the qualifying holding and of the group, if there is a group;
11) if a qualifying holding
is owned by a foreign insurer, investment firm, credit institution or
management company, a certificate of confirmation issued by the supervision
authority of the appropriate state which proves that the said foreign company
holds a valid activity licence and, according to the knowledge of the
supervision authority, its activities are not contrary to legislation in force;
12) the planned
organisational structure of the applicant;
13) the internal rules of the
insurer pursuant to § 46 of this Act;
14) the name and address of
the person handling claims who is designated to each Contracting Party to the
EEA Agreement except Estonia (hereinafter Contracting State) by the applicant
pursuant to subsection 43 (5) of the Motor Third Party Liability Insurance Act,
if the application is submitted for motor third party liability insurance.
(2) The accuracy of
information and documents submitted with regard to natural persons specified in
clauses (1) 5) and 6) of this section shall be confirmed by the above-mentioned
persons by their signatures.
(3) An applicant shall notify
the Financial Supervision Authority immediately of any changes in the
information or documents submitted upon application for the activity licence
specified in subsection (1) of this section, which occur during application for
the activity licence.
§ 13. Application for additional activity licence
(1) In order to engage in a
class or subclass of insurance which is not indicated in an activity licence,
an insurer shall apply for an additional licence.
(2) An application for an
additional activity licence consists of a written application and a scheme of
operations which complies with the requirements provided for in § 14 of this
Act concerning the classes and subclasses of insurance for which the
application for the additional activity licence is applied for.
(3) If an application for an
additional activity licence is submitted for engaging in compulsory classes of
insurance, the general terms of insurance contracts shall also be submitted in
addition to that provided for in subsection (2) of this section.
(4) An insurer shall notify
the Financial Supervision Authority immediately of any changes to the bases for
issuing an activity licence specified in subsections (2) and (3) of this
section, which occur during application for an additional activity licence.
(5) The provisions of
subsection 12 (2) and §§ 15-17 of this Act apply to the processing of
applications for additional activity licences.
§ 14. Scheme of operations
(1) A scheme of operations
shall set out:
1) a list of the classes
and subclasses of insurance in which the insurer intends to engage;
2) the planned amount of
reinsurance and the principles of reinsurance for each class and subclass of
insurance specified in subsection (1) of this section;
3) a list of own funds;
4) the procedure for
forming technical provisions;
5) a technical business
plan for each class and subclass of insurance;
6) the estimated balance
sheet and income statement of the first three years of activity of the insurer;
7) the estimated volume of
premiums, claims and operating expenses and the portion of reinsurance therein
during the first three years of activity of the insurer and the amount of the
technical provisions by each class and subclass of insurance applied for
separately.
(2) If an application is
submitted for engaging in assistance insurance, a scheme of operations shall
also contain a description of the means necessary for the provision of
assistance which are at the disposal of the insurer in addition to that
provided for in subsection (1) of this section.
(3) The Financial Supervision
Authority shall be notified in writing beforehand of all amendments to the
scheme of operations during application for an activity licence and after the
issue of the activity licence.
(4) During the first three
years of operation, an insurer shall submit a report on the implementation of
the scheme of operations to the Financial Supervision Authority together with
the annual report.
§ 15. Review of applications for activity licences
(1) If an applicant has
failed to submit all the information and documents specified in § 12 of this
Act, or if such information or documents are incomplete or have not been
prepared in accordance with the requirements, the Financial Supervision
Authority shall demand elimination of the deficiencies by the applicant.
(2) The Financial Supervision
Authority may demand the submission of additional information and documents if
it is not convinced on the basis of the information and documents specified in
§ 12 of this Act as to whether the applicant for an activity licence has
adequate facilities for engaging in insurance activities, or whether it meets
the requirements for insurers prescribed by an Act or legislation issued on the
basis thereof or if other circumstances relating to the applicant need to be
verified.
(3) In order to verify the
information submitted by an applicant, the Financial Supervision Authority may
request that more specific information and documents be submitted, consult the
commercial register and the register of taxable persons of the Tax and Customs
Board, perform on-site inspections, order an assessment or special audit,
obtain oral explanations from the persons specified in subsection 12 (2) of
this Act, their representatives and third parties concerning the content of
documents and facts which are relevant in making a decision on the issue of an
activity licence.
(4) The information and
documents specified in subsections (1)-(3) of this section shall be submitted
within a reasonable term determined by the Financial Supervision Authority.
(5) The Financial Supervision
Authority may refuse to review an application if the applicant has failed to
eliminate the deficiencies specified in subsection (1) of this section within
the prescribed term, or has not submitted the data, documents or information
requested by the Financial Supervision Authority by the end of the term. Upon
refusal to review an application, the Financial Supervision Authority shall
return the submitted documents.
(6) Before a decision to
issue an activity licence or refuse to issue an activity licence is made, the
Financial Supervision Authority shall consult the financial supervision
authority of the corresponding Contracting State if:
1) the applicant is a
subsidiary of an insurer, investment firm, credit institution or management
company founded in the Contracting State;
2) a subsidiary of the
parent undertaking of the applicant is an insurer, investment firm, credit
institution or management company founded in the Contracting State;
3) a person who exercises
supervision over an insurer, investment firm, credit institution or management
company founded in the Contracting State also exercises, either directly or
indirectly, supervision over the applicant.
§ 16. Decision to issue activity licence and decision to refuse to issue
activity licence
(1) An activity licence shall
be issued if the submitted information and documents comply with the
requirements, and if it is possible to verify on the basis of the submitted
information and documents that the applicant for the activity licence has the
sufficient facilities and organisational capacity to carry on insurance
activities, and that the interests of policyholders and insured persons are
sufficiently protected.
(2) The Financial Supervision
Authority shall make a decision to issue or refuse to issue an activity licence
within three months after submission of all the required documents and
information and after the requirements are complied with, but not later than
within six months after receipt of the application for an activity licence.
(3) The Financial Supervision
Authority shall immediately notify an applicant of a decision to issue or
refuse to issue an activity licence.
§ 17. Bases for refusal to issue activity licence
(1) The Financial Supervision
Authority shall refuse to issue an activity licence if:
1) the applicant does not
meet the requirements for insurers provided for in this Act or legislation
issued on the basis thereof;
2) the applicant does not
have the necessary funds or experience to operate as an insurer with
continuity;
3) a member of the
management board or supervisory board, auditor or shareholder of the applicant
does not meet the requirements provided for in this Act or legislation
established on the basis thereof;
4) close links between the
applicant and another person prevent sufficient supervision over the insurer,
or the requirements arising from legislation or the implementation of
legislation of the state where the persons with whom the applicant has close
links is established prevent sufficient supervision over the insurer;
5) information presented in
a scheme of operations provided for in § 14 of this Act is inadequate or
insufficient;
6) the internal rules of an
insurer specified in § 46 of this Act are not sufficiently accurate or
unambiguous for regulation of the activities of the insurer;
7) the applicant has been
punished for an economic offence, official misconduct or offence against
property, if information concerning the punishment has not been expunged from
the punishment register pursuant to the Punishment Register Act (RT I 1997, 87,
1467; 2002, 82, 477; 2003, 26, 156; 2004, 18, 131).
(2) Among other matters, the
following shall be considered upon assessment of the provisions of clauses (1)
2) and 3) of this section:
1) the level of the
organisational and technical administration of the activities of the applicant;
2) the professional
qualifications and experience of members of the management body of the insurer,
and the transparency of their rights, obligations and liability;
3) the activities,
financial situation, reputation and experience of the applicant, its parent
company and persons belonging to the same group as the applicant.;
2) the Act is amended by
adding §§ 171175 worded as follows:
Ǥ 171. Amendment of activity licence
(1) Upon changes in the name,
registry code, or address of the seat or place of business of an insurer, the
Financial Supervision Authority shall make a decision on amendment of a
decision on issue of an activity licence.
(2) The Financial Supervision
Authority shall make a decision specified in subsection (1) of this section not
later than within one month after an insurer forwards the amended information
specified in the same subsection to the Financial Supervision Authority.
(3) The Financial Supervision
Authority shall immediately notify the insurer of a decision specified in subsection
(1) of this section.
§ 172. Expiry of activity licence
An activity licence expires:
1) in the event of
revocation of an activity licence, upon revocation of the activity licence;
2) in the event of a merger
involving the insurer on the basis of subsection 54 (2) of this Act, upon entry
of the new insurer in the commercial register;
3) in the event of a merger
involving the insurer on the basis of subsection 54 (1) of this Act, upon entry
of the merger in the commercial register;
4) in the event of the
bankruptcy of the insurer, by a bankruptcy order or a court ruling to terminate
bankruptcy proceedings due to abatement;
5) in the event of the
transfer of an insurance portfolio, upon receipt of an authorisation for the
transfer of the insurance portfolio from the Financial Supervision Authority;
6) in the event of the
dissolution of an insurer, upon receipt of an authorisation for the dissolution
of the insurer from the Financial Supervision Authority;
7) in the event of the
compulsory dissolution of an insurer, upon the making of the decision on
compulsory dissolution.
§ 173. Revocation of activity licence
(1) Revocation of an activity
licence is the total or partial deprivation of a right acquired by a decision
to issue an activity licence.
(2) An activity licence may
be revoked completely or by individual classes or subclasses of insurance,
whereupon the rights of which the holder of the activity licence is deprived of
upon the revocation of the activity licence shall be specified.
(3) The Financial Supervision
Authority shall revoke an activity licence on the bases provided for in § 174
of this Act.
(4) The addressee of a
decision shall be immediately notified of the decision on revocation of the
activity licence.
(5) A decision on revocation
of an activity licence enters into force at the time indicated in the decision
but not before communication of the decision to the addressee.
§ 174. Bases for revocation of activity licence
The Financial Supervision Authority may revoke an activity licence in
full or in part if it becomes evident that:
1) the insurer has not
commenced the activities as an insurer within twelve months as of the issue of
the activity licence or if the activities of the insurer are suspended for more
than six consecutive months;
2) information submitted
upon application for the activity licence which was of material importance in
the decision to issue the activity licence, is false;
3) the insurer does not
meet the valid requirements for the issue of activity licences;
4) the circumstances
provided for in clauses 17 (1) 3) and 4) become evident;
5) the insurer has violated
provisions of this Act or legislation established on the basis thereof, the
insurer has been punished for an offence and the information concerning the
punishment has not been expunged from the punishment register pursuant to the
Punishment Register Act, or the activities or omissions of the insurer are in
conflict with the public interest;
6) the insurer submits
misleading or inaccurate data or falsified documents or has repeatedly violated
the procedure for reporting established for insurers, or the Accounting Act (RT
I 2002, 102, 600; 2003, 88, 588) or legislation issued on the basis thereof and
the insurer fails to comply with a relevant precept of the Financial
Supervision Authority during the term specified in the precept;
7) the insurer is unable to
perform the obligations it has assumed or if, for any other reason, its
activities significantly damage the interests of the policyholders and insured
persons;
8) the amount of own funds
of the insurer does not comply with the requirements of this Act or legislation
issued on the basis thereof;
9) the technical provisions
or committed assets of the insurer do not comply with the requirements provided
for in this Act;
10) the insurer providing
motor third party liability insurance fails to perform the obligations of a
member of the guarantee fund;
11) the insurer has failed to
implement a precept of the Financial Supervision Authority to the full extent
prescribed or within the prescribed term.
§ 175. Publication
(1) A decision to issue of an
activity licence shall be made public on the website of the Financial
Supervision Authority not later than on the working day following the day the
decision is made.
(2) An insurer who has
received an activity licence shall publish a notice concerning issue of the
activity licence to the insurer in at least one daily national newspaper and
one local newspaper of the seat of the insurer not later than on the third
working day after communication of the corresponding decision to the insurer.
(3) The Financial Supervision
Authority shall make a decision to revoke an activity licence of an insurer
public not later than on the working day following the day the decision is made
on the website of the Financial Supervision Authority and in at least one
national daily newspaper and one local newspaper of the seat of the insurer not
later than on the third working day after the corresponding decision is made.;
3) Chapter 3 is amended and
worded as follows:
Chapter 3
Foundation of Branch and Cross-border Insurance Activities
Division 1
Activities of Estonian Insurers in Foreign States
§ 18. Bases of activities of insurer in foreign state
(1) An insurer founded in
Estonia may engage in insurance activities in a foreign state for which the
Financial Supervision Authority has issued an activity licence to the insurer,
by founding a branch or engaging in cross-border insurance activities.
(2) Upon engaging in
insurance activities in a foreign state, an insurer shall comply with the
requirements provided for in this Act, legislation issued on the basis thereof
and legislation of the foreign state.
(3) The provisions of §§ 19,
213 and 214 of this Act apply to the provision of
services in a Contracting State.
(4) The provisions of §§ 20,
21, 211 and 212 of this Act apply to the provision of
services in a foreign state not specified in subsection (3) of this section
(hereinafter third country).
§ 19. Cross-border insurance activities
(1) For the purposes of this
Division, cross-border insurance activities are the insurance activities of an
Estonian insurer or its branch which relate to insured risks situated in a
Contracting State.
(2) For the purposes of this
Act, a Contracting State where the insured risk is situated means a Contracting
State:
1) in which the object of
insurance is situated, where the insurance relates to movable property,
including buildings or buildings and their contents, in so far as the contents
are covered by the same insurance policy,
2) where the object of
insurance is entered in the register and a corresponding licence plate is
attached to the object, where the insurance relates to vehicles of any type or
3) where an insurance
contract covering travel or holiday risks for a duration of four months or less
has been entered into.
(3) In the cases not provided
in subsection (2) of this section, a Contracting State where the insured risk
is situated means a Contracting State:
1) where the policy-holder
who is a natural person has his or her habitual residence or
2) where the seat of the
policy-holder who is a legal person, to which the insurance contract relates,
is situated.
§ 20. Branch of insurer in third country
(1) An insurer who wishes to
found a branch engaging in insurance activities in a third country shall apply
for a corresponding authorisation from the Financial Supervision Authority
(hereinafter in this Division authorisation for foundation of a branch
in a third country).
(2) In order to apply for an
authorisation for the foundation of a branch in a third country, an insurer
shall submit a written application and the following information and documents
to the Financial Supervision Authority:
1) the state where the
insurer wishes to found a branch together with a reference to the legislation
of the corresponding state, according to which foundation of the branch of the
insurer is permitted in the third country;
2) the address of the seat
of the branch in the third country;
3) a scheme of operations
of the branch concerning insurance activities in the third country, which
complies with the requirements provided for in § 14 of this Act, together with
a detailed description of the planned insurance activities and the structure of
the organisation;
4) information specified in
clause 12 (1) 5) of this Act concerning the managers of the branch.
§ 21. Processing of application for authorisation for foundation of
branch in third country and decision on issue of authorisation
(1) The provisions of § 15 of
this Act apply to the processing of applications for an authorisation for the
foundation of a branch in a third country, verification of the submitted
information and verification of the financial situation, organisational
structure and technical systems of the applicant and existence of sufficient
funds for the foundation of a branch.
(2) A decision to grant or
refuse to grant an authorisation for the foundation of a branch in a third
country shall be made by the Financial Supervision Authority within three
months after receipt of a corresponding application, but not later than within
two months after the receipt of all necessary information and documents.
(3) The Financial Supervision
Authority shall immediately notify an insurer of a decision to grant or refuse
to grant an authorisation for the foundation of a branch in a third country.
§ 211. Refusal to issue authorisation for foundation of
branch in third country
The Financial Supervision Authority may refuse to grant an authorisation
for the foundation of a branch in a third country if:
1) the information or
documents submitted upon application for the authorisation do not meet the
requirements provided for in this Act or legislation established on the basis
thereof, or are inaccurate, misleading or incomplete;
2) the managers of the
branch do not meet the requirements for managers of insurers provided for in
this Act;
3) the financial situation,
organisational structure and other resources of the insurer are insufficient
for engaging in insurance activities described in the scheme of operations in a
third country;
4) the foundation of the
branch or implementation of the scheme of operations submitted by the insurer
may damage the interests of the policyholders or insured persons, the financial
situation of the insurer or the reliability of its activities in Estonia or in
a third country;
5) the financial
supervision authority of the third country has no legal basis for the
organisation of cooperation with the Financial Supervision Authority that would
ensure exercise of sufficient supervision over the branch.
§ 212. Revocation of authorisation for foundation of branch
in third country
(1) The Financial Supervision
Authority may revoke an authorisation for the foundation of a branch in a third
country if:
1) the insurer has submitted
false information upon application for the authorisation for the foundation of
a branch which was of material importance in the decision to grant the
authorisation, and also in the case where other false information has been
submitted to the Financial Supervision Authority;
2) the insurer has
materially violated the requirements provided for in the legislation of the
third country, which may damage the interests of policyholders or insured
persons;
3) the insurer or its
branch does not meet the valid requirements for the issue of authorisations for
the foundation of a branch;
4) the insurer fails to
submit reports on its branch as required;
5) the insurer has failed
to implement a precept of the Financial Supervisory Authority within the
specified term or to the extent prescribed;
6) the risks arising from
the activities of the branch are significantly greater than risks arising from
the activities of the insurer;
7) the activity licence of
the insurer has been revoked;
8) the circumstances
provided for in § 211 of this Act become evident.
(2) The Financial Supervision
Authority shall immediately notify an insurer and the financial supervision
authority of a third country of a decision to revoke an authorisation for the
foundation of a branch.
(3) After becoming aware of
revocation of an authorisation for the foundation of a branch, the insurer
shall terminate insurance activities through the branch not later than by the
due date specified by the Financial Supervision Authority.
§ 213. Branch of insurer in third country
(1) An insurer that wishes to
found its branch in a Contracting State shall notify the Financial Supervision
Authority of its intention and submit the following information and documents
to the Financial Supervision Authority:
1) the Contracting State
where the insurer wishes to found the branch;
2) a scheme of operations
of the branch concerning insurance activities in the Contracting State, which
complies with the requirements provided for in § 14 of this Act, together with
a detailed description of the planned insurance activities and the structure of
the organisation;
3) the address of the seat
of the branch in the Contracting State;
4) the name of the manager
of the branch who must have sufficient right of representation for operating in
the name of the insurer in relation to third parties;
5) confirmation that the
branch founded in a Contracting State, if the planned insurance activities
prescribe entry into motor third party liability insurance contracts, has
become a member of the National Bureau of Motor Third Party Liability Insurance
and the guarantee fund of the Contracting State.
(2) The Financial Supervision
Authority shall make a decision to forward or refuse to forward the information
and documents specified in subsection (1) of this section to the financial
supervision authority of the corresponding Contracting State within two months
after submission of all the required documents and information, but not later
than within three months after the first receipt of the information and
documents specified in subsection (1) of this section. The Financial
Supervision Authority shall immediately notify the insurer of the decision.
(3) If the Financial
Supervision Authority makes a decision to forward the information and documents
specified in subsection (1) of this section to the financial supervision
authority of the Contracting State, the Authority shall append a confirmation
that the own funds of the insurer comply with the requirements of this Act to
the specified information and documents.
(4) The Financial Supervision
Authority may refuse to review an application if the information or documents
submitted upon application do not comply with the requirements provided for in
this Act or legislation established on the basis thereof, or if the information
or documents are incorrect, misleading or incomplete, or if, upon application,
the data, documents or information required by the Financial Supervision
Authority have not been submitted within the prescribed term.
(5) The Financial Supervision
Authority may decide to refuse to forward the information and documents
specified in subsection (1) of this section to the financial supervision
authority of a Contracting State if the financial situation, organisational
structure or other resources of the insurer or the business reputation,
knowledge or experience of the managers of the branch are insufficient for
engaging in insurance activities described in the scheme of operations in
Contracting States.
(6) An insurer may found a
branch in a Contracting State and, taking into account the conditions of
legislation of the Contracting State and conditions forwarded to the Financial
Supervision Authority by the financial supervision authority of the Contracting
State, commence insurance activities two months after the Financial Supervision
Authority forwards the documents and information specified in subsection (1) of
this section to the financial supervision authority of the Contracting State.
(7) An insurer shall notify
the Financial Supervision Authority and the financial supervision authority of
a Contracting State of changes in circumstances specified in clauses (1) 2)-5)
of this section at least one month before entry into force of the changes.
(8) Upon changes in
circumstances specified in clauses (1) 2)-5) of this section, the Financial
Supervision Authority may revoke the decision to forward information and
documents which is specified in subsection (2) of this section on the bases
specified in subsection (5) of this section. After becoming aware of revocation
of the specified decision, the insurer shall terminate insurance activities
through the branch founded in the Contracting State not later than by the due
date specified by the Financial Supervision Authority.
§ 214. Cross-border insurance activities in Contracting State
(1) An insurer shall notify
the Financial Supervision Authority of the intention to engage in cross-border
insurance activities in a Contracting State, and shall disclose to the
Financial Supervision Authority the name of the Contracting State where the
insurer intends to engage in cross-border insurance activities and a scheme of
operations together with a description of the planned insurance activities and,
in the case provided for in subsection (4) of this section, also information
provided for in clauses 1) and 2) of the same subsection.
(2) The Financial Supervision
Authority shall notify the financial supervision authority of the corresponding
Contracting State of the intention of an insurer to engage in cross-border insurance
activities within one month after receipt of the corresponding information. The
Financial Supervision Authority shall notify the insurer specified in
subsection (1) of this section of forwarding the information to the financial
supervision authority of the Contracting State.
(3) The Financial Supervision
Authority shall forward the following information and documents to the
financial supervision authority of a Contracting State:
1) a list of the classes
and subclasses of insurance in which the insurer has the right to engage;
2) information concerning
the own funds of the insurer and confirmation that the own funds comply with
the requirements provided for in this Act;
3) a description of the
planned cross-border insurance activities.
(4) If the cross-border
insurance activities planned by an insurer in a Contracting State foresee entry
into motor third party liability insurance contracts, the Financial Supervision
Authority shall, in addition to that provided for in subsection (3) of this
section, forward the following to the financial supervision authority of the
Contracting State:
1) confirmation that the
insurer has become member of the National Bureau of Motor Third Party Liability
Insurance and the guarantee fund of the Contracting State;
2) the name and address of
the representative who is designated to a Contracting State by the insurer and
has a permanent residence or place of business in the State and who, arising
from motor third party liability insurance contracts, must have sufficient right
of representation for operating in the name of the insurer in relation to third
parties.
(5) An insurer may commence
cross-border insurance activities as of receipt of the information specified in
subsection (2) of this section.
(6) If information specified
in subsection (3) or (4) of this section changes, an insurer shall notify the
Financial Supervision Authority and the financial supervision authority of the
Contracting State of the changes at least one month before entry into force of
the changes.
(7) The Financial Supervision
Authority may refuse to forward the information and documents specified in
subsections (3) and (4) of this section to the financial supervision authority
of the corresponding Contracting State if the financial situation, organisational
structure or other resources of the insurer are insufficient for engaging in
insurance activities described in the scheme of operations in the Contracting
State.
(8) The Financial Supervision
Authority shall notify the insurer of the decision specified in subsection (7)
of this section within one month after receipt of the information provided for
in subsection (1) of this section.
Division 2
Activities of Foreign Insurers in Estonia
§ 215. Bases for activities of foreign insurers in Estonia
(1) A person who may engage
in insurance activities according to the legislation of the state where it is
founded (hereinafter home state), may also engage in insurance activities in
Estonia on the basis of the activity licence issued in the home state by establishing
a branch or engaging in cross-border insurance activities.
(2) The provisions of §§ 216,
219 and 2110 of this Act apply with regard to persons
specified in subsection (1) of this section who are founded in a Contracting
State.
(3) The provisions of §§ 217
and 218 of this Act apply with regard to persons specified in
subsection (1) of this section who are founded in a third country.
§ 216. Cross-border insurance activities
(1) For the purposes of this
Division, cross-border insurance activities are the insurance activities of an
insurer of a Contracting State or its branch which relate to insured risks
situated in Estonia.
(2) The insured risk is
situated in Estonia if:
1) the object of insurance
is situated in Estonia, where the insurance relates to movable property,
including buildings or buildings and their contents, in so far as the contents
are covered by the same insurance policy,
2) the object of insurance
is entered in a register in Estonia and a corresponding licence plate is
attached to the object, where the insurance relates to vehicles of any type, or
3) where an insurance
contract covering travel or holiday risks for a duration of four months or less
has been entered into in Estonia.
(3) In all cases not provided
for in subsection (2) of this section, the insured risk is situated in Estonia
if:
1) the policy-holder who is
a natural person has his or her habitual residence in Estonia or
2) the seat of the
policy-holder who is a legal person, as indicated in the insurance contract, is
situated in Estonia.
§ 217. Branch of insurer of third country in Estonia
(1) In order to found a
branch in Estonia, an insurer of a third country is required to apply for a
corresponding authorisation (hereinafter in this Division authorisation for
foundation of a branch) from the Financial Supervision Authority.
(2) Upon application for an
authorisation for the foundation of a branch, a written application and the
following information and documents shall be submitted to the Financial
Supervision Authority:
1) the name and address of
the insurer;
2) the scope of the
activity licence issued to the insurer and information concerning the agency
which issued the activity licence;
3) the name and address of
the branch in Estonia;
4) information provided for
in clause 12 (1) 5) of this Act concerning the director of the branch who must
have sufficient right of representation for operating in the name of the
insurer in relation to third parties;
5) the information and
documents provided for in clauses 386 (2) 1), 3), 4) and 5) of the Commercial
Code (RT I 1995, 2628, 355; 1998, 9193, 1500; 1999, 10, 155; 23, 355; 24,
360; 57, 596; 102, 907; 2000, 29, 172; 49, 303; 55, 365; 57, 373; 2001, 34,
185; 56, 332 and 336; 89, 532; 93, 565; 2002, 3, 6; 35, 214; 53, 336; 61, 375;
63, 387 and 388; 96, 564; 102, 600; 110, 657; 2003, 4, 19; 13, 64; 18, 100; 78,
523; 88, 591);
6) the annual reports of
the insurer for the past two financial years;
7) a scheme of operations
of the branch concerning insurance activities in Estonia, which complies with
the requirements provided for in § 14 of this Act, together with a detailed
description of the planned insurance activities and the structure of the
organisation;
8) the name and address of
the person handling claims who is designated to each Contracting State by the
applicant pursuant to subsection 43 (5) of the Motor Third Party Liability
Insurance Act, if the application is submitted for motor third party liability
insurance;
9) a certificate from an
Estonian credit institution certifying the fact that it has deposited at least
25 per cent of the solvency margin provided for in subsection 36 (1) of this
Act in the Estonian credit institution, and that according to the deposit
agreement the deposited amount may be paid out or transferred only with the
written permission of the Financial Supervision Authority.
(3) In addition to the
information specified in subsection (2) of this section, an insurer of a third
country shall submit the following to the Financial Supervision Authority:
1) authorisation from the
financial supervision authority of the home state to open a branch in Estonia;
2) confirmation of the
financial supervision authority of the home state to the effect that the
insurer holds a valid activity licence in its home state and that it pursues
its activities in a correct manner and in accordance with the public interest;
3) information from the
financial supervision authority of the home state concerning the amount of own
funds and the solvency of the insurer, and the requirements of the home state
for the formation of technical provisions.
(4) An insurer of a third
country shall submit the information and documents specified in this section
which are in a foreign language together with translations into Estonian.
§ 218. Processing of application for authorisation for
foundation of branch and revocation of authorisation
(1) Sections 1517 and 173
and 174 of this Act apply to the processing of applications for an
authorisation for the foundation of a branch, verification of information and
to the grant and revocation of authorisations, unless otherwise provided for in
this section.
(2) In addition to the bases
provided for in § 17 of this Act, the Financial Supervision Authority may
refuse to grant an authorisation for the foundation of a branch if the
financial supervision authority of the third country has no legal basis for the
organisation of cooperation with the Financial Supervision Authority that would
ensure exercise of sufficient supervision over the branch.
(3) The Financial Supervision
Authority may revoke an authorisation for the foundation of a branch if
circumstances provided for in § 173 of this Act or in subsection (2)
of this section become evident.
(4) The Financial Supervision
Authority may refuse to revoke an authorisation for the foundation of a branch
if the policyholders or insured persons of the branch have claims against the
branch or the insurer of a third country.
§ 219. Branch of insurer of Contracting State in Estonia
(1) An insurer of a
Contracting State that wishes to found a branch in Estonia shall so notify the
Financial Supervision Authority through the financial supervision authority of
the Contracting State. The following information and documents shall be
submitted to the Financial Supervision Authority:
1) a scheme of operations
of the branch concerning insurance activities in Estonia, which complies with
the requirements provided for in § 14 of this Act, together with a detailed
description of the planned insurance activities and the structure of the organisation;
2) the address of the seat
of the branch;
3) the name of the director
of the branch who must have sufficient right of representation for operating in
the name of the insurer in relation to third parties;
4) confirmation that the
branch founded in Estonia the planned insurance activities of which foresee
entry into motor third party liability insurance contracts, has become member
of the Guarantee Fund prescribed in the Motor Third Party Liability Insurance
Act;
5) confirmation that the
own funds of the insurer of the Contracting State comply with the requirements
for calculation of the solvency margin of the Contracting State.
(2) Within two months after
the financial supervision authority of a Contracting State has forwarded the
information specified in subsection (1) of this Act to the Financial
Supervision Authority, the Financial Supervision Authority shall make a
decision which determines the requirements which the insurer must comply with
upon engaging in insurance activities in Estonia. The Financial Supervision
Authority shall notify the financial supervision authority of the Contracting
State of its decision.
(3) An insurer of a
Contracting State may found a branch and commence provision of services after
receipt of a decision specified in subsection (2) of this section from the
financial supervision authority of its home state or two months after
forwarding the documents and information specified in subsection (1) of this
section to the Financial Supervision Authority.
(4) If information specified
in subsection (1) of this section changes, the Financial Supervision Authority
may make a decision or amend the decision which determines the conditions for
insurance activities in Estonia and is specified in subsection (2) of this
section.
(5) Confirmation from the
Financial Supervision Authority concerning receipt of the information and
documents specified in subsection (1) of this section shall be submitted upon
entry of a branch in the commercial register.
(6) The financial supervision
authority of a Contracting State shall submit the information and documents
specified in this section which are in a foreign language together with
translations into Estonian.
§ 2110. Cross-border insurance activities in Estonia
(1) An insurer of a
Contracting State that wishes to engage in cross-border insurance activities in
Estonia shall so notify the Financial Supervision Authority through the
financial supervision authority of the Contracting State. The following
information shall be submitted to the Financial Supervision Authority:
1) a list of the classes of
insurance in which the insurer has the right to engage;
2) information concerning
the own funds of the insurer and confirmation that the own funds comply with
the requirements provided for in this Act;
3) a description of the
planned cross-border insurance activities.
(2) If the cross-border
insurance activities planned by an insurer in Estonia foresee entry into motor
third party liability insurance contracts, in addition to that provided for in
subsection (1) of this section, the following shall be submitted to the
Financial Supervision Authority:
1) confirmation that the
insurer has become a member of the Guarantee Fund prescribed in the Motor Third
Party Liability Insurance Act;
2) the name and address of
the representative who is designated to Estonia by the insurer and has a
permanent residence or place of business in Estonia and who, arising from motor
third party liability insurance contracts, must have sufficient right of
representation for operating in the name of the insurer in relation to third
parties.
(3) One month after the
information specified in subsections (1) and (2) of this section is forwarded
to the Financial Supervision Authority, the insurer of a Contracting State may
commence cross-border insurance activities in Estonia.
(4) The financial supervision
authority of a Contracting State shall submit the information and documents
specified in this section which are in a foreign language together with
translations into Estonian.;
4) the Act is amended by
adding § 441 worded as follows:
Ǥ 441. Requirements for financial soundness and own funds of
branch of insurer of third country
A branch of an insurer of a third country is required to:
1) keep assets in the
Member States with a value equal to not less than the solvency margin;
2) keep assets in Estonia
with a value equal to not less than one-half of the solvency margin provided
for in subsection 36 (1) of this Act, including a deposit provided for in
clause 217 (2) 9) of this Act;
3) calculate the solvency
margin according to the procedure for calculation of solvency margins provided
pursuant to subsection 35 (6) of this Act and on the basis of insurance
contracts entered into in Estonia, and comply with the requirements for own
funds provided for in this Act;
4) keep committed assets
corresponding to the technical provisions arising from insurance contracts
entered into in Estonia, having regard to the provisions of §§ 41 and 42 of
this Act;
5) organise accounting on
the activities performed in Estonia and preserve all documents related to the
activities performed in Estonia in Estonia.
§ 77. Entry into force of Act
(1) This Act enters into
force on 1 May 2004.
(2) Until the establishment
of the legislation specified in subsection 11 (3) of the Social Tax Act
provided for in clauses 11 (1) 4) and 5), subsection 12 (3), subsection 15 (2),
subsection 16 (9), subsection 21 (9), subsection 35 (4), and clause 73 3) of
this Act, the provisions of legislation specified in subsection 72 (2) of this
Act apply, unless otherwise provided for in this Act.
1
Council Directive 73/239/EEC on the coordination of laws, regulations
and administrative provisions relating to the taking-up and pursuit of the
business of direct insurance other than life assurance (OJ L 228, 16.8.1973, p.
3, amended by: Directive 76/580/EEC OJ L 189, 13.7.1976, p. 13; Directive
84/641/EEC OJ L 339, 27.12.1984, p. 21; Directive 87/343/EEC OJ L 185,
4.7.1987, p. 72; Directive 87/344/EEC OJ L 185, 4.7.1987, p. 77; Directive 88/357/EEC
OJ L 172, 4.7.1988, p. 1; Directive 90/618/EEC OJ L 330, 29.11.1990, p. 44;
Directive 92/49/EEC OJ L 228, 11.8.1992, p. 1; Directive 95/26/EC OJ L 168,
18.7.1995, p. 7; Directive 2000/26/EC OJ L 181, 20.7.2000, p. 65; Directive
2002/13/EC OJ L 77, 20.3.2002, p. 17; Directive 2002/87/EC OJ L 35, 11.2.2003,
p. 1);
Council Directive 88/357/EEC on the coordination of laws, regulations
and administrative provisions relating to direct insurance other than life
assurance and laying down provisions to facilitate the effective exercise of
freedom to provide services and amending Directive 73/239/EEC (OJ L 172,
4.7.1988, p. 1, amended by: Directive 90/618/EEC OJ L 330, 29.11.1990, p. 44;
Directive 92/49/EEC OJ L 228, 11.8.1992, p. 1);
Council Directive 92/49/EEC on the coordination of laws, regulations
and administrative provisions relating to direct insurance other than life
assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life
insurance Directive) (OJ L 228, 11.8.1992, p. 1, amended by: Directive 95/26/EC
OJ L 168, 18.7.1995, p. 7; Directive 2000/64/EC OJ L 290, 17.11.2000, p. 27;
Directive 2002/87/EC OJ L 35, 11.2.2003, p. 1);
Directive 2002/83/EC of the European Parliament and of the Council
concerning life assurance (OJ L 345, 19.12.2002, p. 00010051).
2 RT = Riigi
Teataja = State Gazette