The Slovak authorities were in broad agreement with the assessment. In addition, to
providing a number of technical suggestions and corrections, in response to the FSAP team’s recommendations, they however noted that the legislation implementing the EU Capital Requirements Directive in Slovakia (the amendment to the Banking Act), which took effect from January 1, 2007, addressed the FSAP mission’s recommended action as regards capital adequacy (CP6). The amendment also addressed also the FSAP mission’s recommendation related to CP9 (on problem assets, provisions and reserves) because it provides a new, specific, authority for enforcement to the NBS, under which a bank is obliged to reassess its provisioning if the NBS finds that the level of provisioning does not reflect the factual situation. Finally, the amendment impacts on the assessment of CP16, on interest rate risk in the banking book, and the related recommendation. The Banking Act, as now amended, provides the NBS with the authority to issue specific secondary legislation, which has since
been done and which took effect from 15 January 2007, clarifying the issue of interest rate risk in the banking book.
Summary Assessment of Observance of the Insurance Core Principles
The assessment of the observance of the Insurance Core Principles (ICP), carried
out as part of the FSAP update mission to the Slovak Republic, was conducted in December 2006 based on the principles approved by the International Association of Insurance Supervisors (IAIS) in October 2003. It reflected the insurance supervision practices of the Slovak Republic authorities as of end-November 2006.
Since the 2002 FSAP, insurance supervision has shown an impressive
improvement. Most of the 2002 recommendations have been followed up by implementing the European Union insurance directives in national legislation. The insurance supervisory staff of the NBS appreciates the formal meaning as well as the spirit of the EU directives. The collaboration with the Ministry of Finance in implementing the directives has proven to
be effective. As a result, insurance supervision is generally compliant with the ICP.
Institutional and macroprudential setting—overview
As of end-September 2006, there were 24 insurance companies operating in
Slovakia. During the last five years, the number of insurance companies has marginally
decreased. While there were a few new entrants to the market, more companies have been
either closed down or merged. Two largest companies have a combined market share of over
50 percent of the total gross written premium.