Dutch Act Financial Supervision – a clear overview.

The Dutch Act on Financial Supervision (Wet op het financieel toezicht (Wft)) has come into effect on 1 January 2007. The Wft brings together practically all the rules and conditions that apply to the financial markets and their supervision. In total, the Wft replaces eight existing supervision Acts. The extensive system of supervision of financial institutions that exists in the Netherlands (supervision of banks, insurers, collective investment schemes, etc.) will therefore soon be regulated by a single Dutch Act and subordinate regulations based on this Act.

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Dutch act financial supervision

The idea behind the Wft is that legislation for the financial markets should be targeted, market-oriented and clear. The tasks of the Dutch Central Bank (DNB) (prudential supervision) and those of the AFM (supervision of conduct of business) are to be separated in such a way that there is no overlap. Moreover, the rules governing financial institutions have been simplified and the Wft also reduces the administrative burden on the business sector. The intention behind the Wft was not to revise the material standards for financial supervision but instead to anchor the functional supervision model in law and to make the regulations as consistent as possible across the various supervised sectors and not so much the types of institutions.

Simplification and reduction of the administrative burden is achieved by, among other things, turning eight Acts into one, by creating a single general rule for as many issues as possible, and by describing the tasks of both supervisory authorities and regulating the cooperation between the DNB and the AFM in Dutch act financial supervision law.

Introuction Wft and Dutch act financial supervision

An introduction of the Wft has led to existing Dutch supervision Acts being incorporated into a single Act. The Acts in question are the Dutch Act on the financial Supervision of the Credit System 1992 (Wet toezicht kredietwezen 1992), the Dutch Act on the Supervision of the Insurance Industry 1993 (Wet toezicht verzekeringsbedrijf 1993), the Act on the Supervision of the Securities Trade 1995 (Wet toezicht effectenverkeer 1995), the Act on the Supervision of Collective Investment Schemes (Wet toezicht beleggingsinstellingen), the Dutch Act on the financial Supervision of the Funeral Provisions Insurance Industry [Wet toezicht natura-uitvaartverzekeringsbedrijf], the Act on the Disclosure of Major Holdings (Wet melding zeggenschap), the Consumer Credit Act (Wet op het consumentenkrediet], the Insurance Brokerage Business Act (Wet assurantiebemiddelingsbedrijf) and the Financial Services Act (Wet financiële dienstverlening). The incorporation of these Acts into one single Act will be accompanied by a number of changes.

Structure Dutch act financial supervision

The most important of these are:

1. A new structure for the regulations
2. Changed terminology
3. New and changed general and conduct-related standards.
4. In cooperation with the DNB and representative organisations, the AFM is preparing market parties as well as possible for the implementation of the Wft.

By the way: Doorneweerd Assurantien BV is fully licensed to operate under the regulations of the AFM.

General liability insurance

General (Third party) Liability application form

Business owners obtain general liability insurance to cover legal hassles due to accident, injuries and claims of negligence. These policies safeguard against payments as the consequence of liability for causing bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required through an appeal procedure. This kind of insurance is not too expensive (relatively) and gives an important insurance cover.

Average insurance cover € 2.500.000,-. Most of the companies will start with an application. An application for an Indemnity Insurance is less common because those risk are primarily for special (financial risk) professions.

Directors liability

Directors and Officers Indemnity Premium

Directors liability. There are circumstances under which a managing director of a Dutch limited liability company may, however, be personally liable towards third parties on the grounds of tort. The question of personal liability of a director most often comes into play when creditors of the company are left unpaid.  A managing director is liable if he has entered into an agreement on behalf of the company while he knew – or reasonable should have known – that the company would be unable to perform its obligations under the agreement and would not be able to provide recourse for the damages suffered as a result of that breach of contract.

Professional Indemnity Insurance

This insurance is required by law for some professions. Not for all professions. Yet there are many situations in which you do have to take out such insurance. For example, because a customer or client requests it. Or because the trade association you are affiliated with demands this. Professional organizations in particular often impose the obligation to take out professional liability insurance with regard to all their services.

Requirements Indemnity Insurance

The requirements that are then imposed on professional liability insurance are, just like the amounts to be insured, minimum requirements. This does not mean that satisfying these minimum requirements is sufficient in the specific situation of an office. A company will therefore have to consider whether it is sufficient to meet the minimum requirements.

Information en calculations

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