Insurance Law EstoniaDr Olavi-Jüri Luik, attorney at law
Home / Blog: Estonian insurance law insights / Estonia bill 993 SE: broker agents, no-branch EEA insurers

Estonia bill 993 SE: broker agents, no-branch EEA insurers

By Dr Olavi-Jüri Luik, attorney at law (WIDEN) · 2026-11-03

Contents

The Riigikogu (Estonian Parliament) is considering bill 993 SE amending the Insurance Activities Act (kindlustustegevuse seadus, KindlTS) and the Law of Obligations Act (võlaõigusseadus, VÕS). The bill would allow insurance brokers to distribute through agents, let insurers from other EEA states operate permanently in Estonia without a formal branch, and adjust some insurance contract rules. The preparatory file is in the Government's draft legislation information system (EIS 26-0305).

Where the bill stands (3 November 2026)

The bill is no longer at the consultation stage:

  • 10-31 March 2026: first inter-ministerial consultation round (EIS 26-0305/01);
  • 22 June-8 July 2026: second round (EIS 26-0305/04);
  • 12 August 2026: submitted to the Government, now also amending VÕS;
  • 14 September 2026: introduced in the Riigikogu by the Government (993 SE); lead committee: Finance Committee;
  • 28 September 2026: first reading completed;
  • 12 October 2026: deadline for amendments. The Estonian Insurance Brokers Association (14 October) and the Estonian Insurance Association (16 October) submitted opinions.

The bill awaits its second reading. On the Riigikogu procedure page, checked again on 4 November 2026, the stage is shown as "second reading" and the status as "first reading completed". The bill contains no specific commencement date: according to the explanatory memorandum, the act would enter into force in the ordinary way because no transitional period is considered necessary.

Status of the rules described below. Everything in the next section describes the bill in the version read for the first time on 28 September 2026. None of it is law in force. Provisions may be amended or renumbered at the second reading, and the bill may not be passed at all. References to "new" or "proposed" sections are references to the bill, not to the current Insurance Activities Act or Law of Obligations Act.

What the bill changes

1. Broker agents (kindlustusmaakleri esindaja)

Under the proposed KindlTS § 174(1¹), a broker's agent would distribute insurance in the name and for the account of a broker, recommending the contract best suited to the client on the basis of an independent analysis, but its main business would not be insurance distribution. The memorandum mentions car dealers, leasing companies, travel agencies and trade or professional associations.

Key rules proposed in the bill:

  • the broker would be liable for damage caused by its agent (proposed § 179(5)); the agent itself would need no compulsory professional indemnity cover;
  • the broker would enter the agent in the register of intermediaries kept by Finantsinspektsioon (FI), the Estonian Financial Supervision and Resolution Authority (proposed § 190¹); the agent could not at the same time be another insurer's tied agent or another broker's agent for the same class;
  • before conclusion, the agent would have to establish the client's needs, as a rule present offers from at least three insurers, recommend the most suitable one, explain terms and exclusions and disclose its remuneration (proposed § 192¹);
  • individuals distributing for the agent would have to be of good repute and have the required knowledge; the broker would ensure at least 15 hours of training per year (§ 186(2)(16) and § 191(1) as proposed);
  • the broker would remain responsible for segregating client premiums even where the agent collects them (proposed § 180(5)).

2. Permanent cross-border activity without a branch

Article 145(1) of Solvency II and Article 6(1) of the IDD treat a permanent presence in another Member State "in the same way as a branch". Estonia has so far read this as requiring a branch. Under the bill (KindlTS § 24(6), § 36(2), § 199(7) as proposed), neither insurers nor intermediaries would have to establish a branch, but where the presence consists even of an office managed by the insurer's own staff or by an independent person acting on its behalf, branch supervisory requirements would apply, including notification. The same would apply to Estonian insurers abroad.

3. Other changes

  • The KindlTS would replace "insurable interest" (kindlustushuvi) with "insurance needs" (kindlustusvajadused) in the IDD demands-and-needs provisions, to separate them from the civil-law concept.
  • A proposed VÕS § 424¹ would define insurable interest in the general part of the insurance contract chapter; § 478(1) would be repealed.
  • A proposed VÕS § 434(1¹), which is not in force, would provide that where the contract is concluded through an intermediary, the intermediary ensures that the policy is made available to the policyholder and, where relevant, the insured, and that the insurer's duty under § 434(1) is deemed performed when it issues the policy to the intermediary. The current § 434(1) contains no such rule: it requires the insurer to issue the policy to the policyholder in a form reproducible in writing, and in writing at the policyholder's request.
  • Notices would move from national daily newspapers to the official gazette Ametlikud Teadaanded and websites.
  • Brokers would no longer have to publish annual reports on their websites (§ 193(5) to be repealed).
  • Good repute and reliability, including business connections, would become explicit conditions for registering a broker (§§ 188, 189 as proposed).

Why

According to the explanatory memorandum, the aim is to widen access to insurance through a new channel, level the playing field between insurers (with their agent networks) and brokers, and use the IDD Article 3(3) option that Estonia did not take up in 2017. The branch rule change stems from proposals to reduce administrative burden. The memorandum stresses that using agents is optional and that client protection is preserved because the same distribution rules apply. The Estonian Insurance Brokers Association supported the broker agent model on 31 March 2026.

Who is affected

  • Brokers (international brokers with Estonian entities included): a new sales channel, but full liability and more compliance work. The memorandum itself expects broker PI premiums may rise.
  • Prospective agents: businesses whose products naturally come with insurance.
  • Insurers and reinsurers: wider reach, but agent errors may be associated with the insurer's brand.
  • EEA insurers and intermediaries: no need for a branch as a legal structure, but supervisory requirements remain.
  • Policyholders: more points of comparison, though a longer distribution chain may add commission cost.

Commentary: practical implications and open questions

The following is the author's analytical assessment, not the content of the bill or the memorandum.

Independence versus core business. An agent's main business is something other than insurance. A car dealer presenting three quotes is not as independent as a broker. The three-quote rule and fee disclosure help, but effectiveness will depend on how brokers monitor their agents. An open question is how "independent analysis" will be evidenced where the agent is paid only on concluded contracts.

Broker PI cover. If the bill is enacted in this form, the agent will need no compulsory PI cover and the broker will be liable, so the broker's PI policy must respond to the agents' acts. Before appointing agents, brokers and their PI insurers should review the definition of insured persons, exclusions for third parties and subcontractors, and limits.

Policy delivery through intermediaries. If bill 993 SE is enacted as proposed, the proposed VÕS § 434(1¹) would treat the insurer's duty to issue the policy under the current § 434(1) as performed when the policy is issued to the intermediary, and would make the intermediary responsible for making it available to the policyholder. Until then, the current § 434(1) applies without that qualification. The consequences of any failure by the intermediary to forward the policy, for the policyholder's position towards the insurer and towards the intermediary, would require separate analysis. So would the interaction with the start of the consumer withdrawal period (VÕS §§ 433 and 56), which depends on when the consumer received the terms and information.

"Branch without a branch". Under the bill, even an independent person with a standing mandate to act for the insurer may trigger branch supervisory requirements. EEA insurers using a local authorised representative, coverholder or claims handler in Estonia should assess whether their presence will be treated as branch-equivalent and which notifications are needed. The memorandum stresses that this treatment concerns supervision only and does not change the notion of a branch in private-law relations.

Insurable interest. In discussing insurable interest, the memorandum refers, among others, to O.-J. Luik and K. Saar, "Kindlustushuvi kui kindlustuse ja hasartmängu eristamise alus" (Insurable interest as the basis for distinguishing insurance from gambling), Juridica 2018/7. Moving the definition to the general part is systematically correct, since insurable interest is also a prerequisite in life insurance.

Sources

Topics: Insurance broker and agent Insurance Activities Act