EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 19 September  2016  
on the role of N árodná banka Slovenska in reporting on insurance premium levy  
(CON/201 6/45) 
 
Introduction and legal basis  
On 16 August  2016 the European Central Bank (ECB) received a request from th e Ministry of Finance of 
the Slovak Republic  (hereinafter the ‘Ministry of Finance’) for an opinion on a draft law amending Law No 
39/2015 on insurance and on amendments of certain laws (hereinafter the ‘draft law’).   
The ECB’s competence to deliver an opi nion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the  third indent  of Article  2(1) of Council  Decision 98/415/EC1, as 
the draft law relates to Národná banka Slovenska (NBS) . In accordance with the first sentence of 
Article  17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 
this opinion.  
 
1.  Purpose of the draft law  
1.1 Under the current legal framework, insurance undertakings  established in Slovakia and other 
Member States and branches of third- country insurance undertakings  (hereinafter jointly referred to 
as ‘insurance undertakings’)  are required to make annual partial premium transfers in the amount 
of 8% of the premiums received from compulsory motor vehicle liability insurance in respect of 
activities carried out in the Slovak Republic in the previous year . The transfers must be made to a 
separate account of the Ministry  of Interior  of the Slovak Republic  (hereinafter the ‘Ministry of 
Interior’) . The insurance undertakings must  report the partial premium transfers  to NBS, the 
Ministry of Finance and the Ministry  of Interior  within three working days of the date of transfer. In 
addition, the insurance undertakings are required to provide NBS with data that support s the items 
used in the calculation of the base for the annual premium transfers. The funds collected from the 
premium transfers are allocated by t he Ministry  of Interior , after having consult ed the Ministry  of 
Finance , to cover certain pre- defined expenses , such as those of fire brigades and  relevant units of 
the Ministry  of Interior  in relation to traffic and accidents.  
1.2 The draft law extends the mandatory premium transfers to all classes of non- life insurance 
products and provides for the premium transfer s to take place on a quarterly basis. Consequently , 
the insurance undertakings will have to report  quarterly to the relevant Ministries and NBS  and also 
provide to NBS on a quarterly basis the data that support s the items used in the calculat ion of the 
                                                 
1  Counci l Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42) . 
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2 base for the premium transfers. Under the draft law , the additional financial resources will be 
transferred to the Ministr ies of Health, Environment  and Finance, which will use the funds  for a set 
of pre- defined purposes , in particular for a renewal  and modernisation of the healthcare 
infrastructure, implementation of flood management measures , and to cover unforeseen 
expenditures  of the central government . 
 
2. General observations  
2.1 The draft law imposes on the insurance undertakings a new substantial quar terly reporting 
requirement vis-à-vis NBS , which will considerably increase the amount of data to be reported to 
and processed by NBS. As a result , the draft law significantly expands the substance of the task 
currently performed by NBS.  
2.2 The ECB under lines that, in the context of a proposed conferral of tasks on a European System of 
Central Banks ( ESCB)  member , it is necessary to assess such conferral against the prohibition of 
monetary financing under Article 123 of the Treaty. The ECB has developed t he following 
guidance, in the form of general and specific considerations, on the basis of which the ECB may 
decide whether a new task conferred on an ESCB national central bank (NCB) is to be considered 
a central banking task or a government task for the purposes of the monetary financing prohibition.  
2.2.1  General considerations  
 First, the systematic categorisation of tasks assigned to NCBs as central banking or government 
tasks applies to genuinely new tasks that did not exist in the past or did not for m an integral part of 
the central banking tasks already assigned to the NCB. In recognition of the different Member 
States’ legal frameworks, central bank ing traditions and national set -ups, the tasks currently 
discharged by an NCB as central banking tasks  are not reviewed and re- categorised, but may be 
reassessed if they are subject to legislative amendments of substance.  
 Second, the principle of financial independence requires that the Member States may not put their 
NCBs  in a position where  they have insufficient financial resources to carry out their ESCB - or 
Eurosystem -related tasks, as applicable.   
 Third , central banking tasks comprise in particular those tasks that are related to the tasks listed in 
Article 127(2) , (5) and (6)  of the Treaty.  
 Fourth, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly 
discharged on behalf of and in the exclusive interest of the government or of other public entities, 
should be considered as government tasks. In that context, a distinction should be drawn between liquidity - and solvency -related tasks  of NCB s. While, for purposes of the monetary financing 
prohibition, solvency support is a government task, liquidity -related tasks , the ultimate objective of 
which are to finance the economy,  are central bank ing tasks . 
2.2.2 Specific considerations  
 An important criterion for classifying a new task as a government task is , therefore,  the impact of 
the task on the institutional, financial and personal independence of the NCB. In particular, the following should be taken into account.  
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3  First, it should be assessed whether the performance of the new task creates inadequately 
addressed conflicts of interests with existing central banking tasks, and does not necessarily 
complement those existing central banking tasks. If a conflict of interest arises between existing  
and new tasks, there should be sufficient mitigation in place to adequately address that conflict. 
Complementarity between the new task and existing central banking tasks should not, however, be 
interpreted extensively, so as to lead to the creation of an indefinite chain of ancillary tasks. Complementarity should also be examined from the point of view of the financing of those tasks.  
 Second, it should be assessed whether without new  financial resources the performance of the 
new task is disproportionate to the financial or organisational capacity of the NCB concerned, and 
may negatively impact its capacity to properly perform existing central banking tasks.  
 Third , it should be asses sed whether the performance of the new task does not fit into the 
institutional set -up of the NCB in the light of central bank independence and accountability 
considerations.  
 Fourth, it should be assessed whether the performance of the new task harbours s ubstantial 
financial risks.  
 Fifth, it should be assessed whether the performance of the new task exposes the members of the 
NCB ’s decision- making bodies to political risks which are disproportionate and may also impact on 
their personal independence and, in particular, the guarantee of the term of off ice under 
Article  14.2 of the Statute of the European System of Central Banks and of the European Central 
Bank . 
2.2.3  Any final assessment on the qualification of a task given to an NCB as either falling withi n the 
scope of a central banking task or a government task will be guided by the objective of ensuring the 
consistent application of the prohibition of monetary financing within the Eurosystem and the ESCB 
to the extent that it applies to its members.  
 
3. Specific observations  
3.1 Collection of additional insurance data for taxation purposes   
 Under Law No 39/2015 on insurance and on amendments of certain laws (hereinafter the ’law on 
insurance’) , NBS receives from insurance undertakings data that support s the items used in  the 
calculation of the base for the annual premium transfers  in respect of compulsory motor vehicle 
liability insurance
2. However, t he draft law substantially extends the scope of the data to be 
reported to NBS  by covering all non- life insu rance products and increases the reporting frequency  
by requiring quarterly reporting . Although neither the law on insurance nor the draft law are clear on 
how and for which purposes the data is to be process ed by NBS , the draft law significantly expands 
the substance of the task initially conferred on NB S, which should therefore be assessed against 
the prohibition of monetary financing.   
3.2 Tasks not related to basic central bank ing tasks listed in Article 127(2) and (5) of the Treaty  
                                                 
2  The ECB has not been consulted on the assignment of the new  task under  the law on insurance.  
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4  The collection, mai ntenance and processing of the data that support s the items used in the 
calculation of the base for quarterly  partial premium transfers  is not lin ked to any of the central 
bank ing tasks listed in Article 127(2)  and (5) of the Treaty . In addition, such new tasks are not 
complementary to the existing supervisory tasks  of NBS. Although NBS is responsible for the 
supervision of insurance undertakings, the objectives of its supervisory tasks substantially differ 
from the objectives of the new tasks conferred on NBS under the draft law. While the main 
objective of the prudential supervision over insurance undertakings  is the protection of 
policyholders and beneficiaries3, the objective of the new tasks conferred on NBS under the draft 
law is linked to the  financ ing of certain pre- defined expenses incurred in  the performance of 
government tasks. In the ECB’s view, t he fact that such expenses are related to losses or to the 
negative effects of losses , which would potentially be covered by non- life insurance products 
offered by the insurance undertakings , does not form a sufficient rationale  to consider the new 
tasks conferred on NBS under the draft law as complementary to NBS’s supervisory tasks.  
3.3 Discharge of tasks  on behalf of and in the exclusive interest of the government  
 The proceeds of the partial premium transfers are to be used by the relevant M inistries of the 
Slovak government for specific pre- defined purposes and contribute to the financing of government 
tasks , e.g. to finance expenses of fire brigades, renewal and modernisation of the healthcare 
infrastructure, implementation of flood management measures  and to cover  unforeseen 
expenditures of the central government . The collection, maintenance and processing of the data 
that support s the items used in t he calculation of the base for the quarterly partial premium  
transfers  are, therefore, also in the interest of the Slovak government . 
3.4 Atypical tasks   
 No ESCB NCB  currently performs a task  that would be comparable to the task introduced by  the 
draft la w. The task conferred on NBS by the draft law must be distinguished from the tasks 
performed by other ESCB NCBs related to the supervision of insurance undertakings, financial 
stability or collection of statistical data. In particular , some ESCB NCBs colle ct data from insurance 
undertakings  in order to obtain  sufficient information about  their financial situation or to collect fees 
which ultimately finance the supervisory tasks of the relevant ESCB NCBs. Some ESCB NCBs are 
involved in the process  of comput ing and impos ing fees and contributions  on financial institutions 
for the purpose of e.g. deposit guarantee funds, resolution funds, investor compensation funds or 
insurance compensation funds. Unlike the task conferred on NBS under the draft law, these tas ks 
are either complementary to the ESCB NCBs ’ supervisory mandates  or related to financial stability. 
Therefore,  it can be concluded that the new task under the draft law is an atypical central banking 
task.  
3.5 Extent to which the performance of tasks pos es substantial or disproportionate f inancial burden  
 The principle of financial independence requires NCBs to have sufficient means to carry out not 
only their ESCB -related tasks, but also their national tasks  from both an operational and financial 
point of view . Allocati on of specific non- ESCB related tasks to NCBs, e.g.  collection of data that 
                                                 
3  See Article 79(2) of the l aw on insurance.  
ECB -PUBLIC  
 
5 support s the items used in the calculati on of  the base for insurance premium transfers , also 
requires an allocation of additional human and financial resources for  these tasks in order to 
ensure that they are carried out in a manner that will not affect the NCB ’s operational capacity to 
perform its ESCB -related tasks4. The draft law does not address in any way the additional 
expenses  resulting from the conferral on N BS of the new task . The draft law is not clear on how 
NBS should treat and process the data received. Therefore,  it is difficult to assess whether the 
performance of the new task is disproportionate to the financial or organisational capacity of NBS 
and whether it may negatively impact NBS’s  capacity to properly perform its existing central 
banking tasks.    
3.6 Extent to which the performance of tasks poses  substantial financial or disproportionate political 
risks 
 In the absence of any  provision in the draft law which would exclude  the liability of NBS for the 
exercise of the tasks under the draft law , NBS would ultimately be liable for damages in 
accordance with the Slovak state liability rules. Therefore, t he new task conferred on NBS  under 
the draft law would entail additional  financial risks , which would have to be assumed by NBS in 
relation to tasks performed in the interest of the Slovak government .  
3.7 Conclusion  
 The ECB considers t he new task  conferred on NBS under the draft law to be a government task. 
Therefore the ECB expresses its general concern regarding the proposed conferral  of such  task on 
NBS. With a view to dispelling the monetary financing concerns associated with carrying out a 
government task , it should be ensured that NBS has sufficient resources to perform  the new task 
without affecting its capacity to carry out its central bank ing tasks. To this end, it is necessary that 
NBS is fully reimbursed for any additional costs  associated with performing the new task  and, in the 
case of appli cation of the Slovak state liability rules, the Slovak Republic has no indemnification 
rights.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 19 September  2016 . 
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
4  See for example paragraph 3.1.2 of Opinion CON/2016/6 and paragraph 3.1.1 of Opinion CON/2016/16.  All ECB 
opinions are published on the ECB’s website at www.ecb.europa.eu.