CELEX: 61998CJ0206
Failure by a State to fulfil its obligations
Directive 92/49/EEC
Direct insurance other than life assurance

Grounds
1 By application lodged at the Court Registry on 2 June 1998, the Commission of the European Communities brought an action, pursuant to Article 169 of the EC Treaty (now Article 226 EC), for a declaration that, by adopting and maintaining in force Article 2 of the Law of 9 July 1975 on the control of insurance undertakings, as amended by the Royal Decree of 12 August 1994 (Moniteur Belge of 16 September 1994, p. 23525), the Kingdom of Belgium has failed to fulfil its obligations under Council Directive 92/49/EEC of 18 June 1992 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 1992 L 228, p. 1) and under the EC Treaty.
Community law
2 Article 2 of Directive 92/49 states:
1. This directive shall apply to the types of insurance and undertakings referred to in Article 1 of Directive 73/239/EEC.
2. This directive shall apply neither to the types of insurance or operations, nor to undertakings or institutions to which Directive 73/239/EEC does not apply, nor to the bodies referred to in Article 4 of that directive.
3 Article 37 of Directive 92/49 provides:
Article 12(2), second and third subparagraphs, Article 12(3) and Articles 13 and 15 of Directive 88/357/EEC are hereby repealed.
4 Article 55 of Directive 92/49 states:
Member States may require that any insurance undertaking offering, at its own risk, compulsory insurance against accidents at work within their territories comply with the specific provisions of their national law concerning such insurance, except for the provisions concerning financial supervision, which shall be the exclusive responsibility of the home Member State.
5 Article 1 of First Council Directive 73/239/EEC of 24 July 1973 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 1973 L 228, p. 3) states:
This directive concerns the taking-up and pursuit of the self-employed activity of direct insurance carried on by insurance undertakings which are established in a Member State or which wish to become established there in the classes of insurance defined in the Annex to this directive.
6 Article 2(1)(d) of Directive 73/239 states that it does not apply to insurance forming part of a statutory system of social security.
7 Article 12(2) and (3) of Second Council Directive 88/357/EEC of 22 June 1988 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 (OJ 1988 L 172, p. 1) provides:
2. This title shall not apply to the transactions, undertakings and institutions to which the First Directive does not apply, nor to the risks to be covered by the institutions under public law referred to in Article 4 of that directive.
This title shall not apply to insurance contracts covering risks classified under the following numbers of point A of the Annex to the First Directive:
- No 1:
as regards accidents at work,
- No 10:
not including carrier's liability,
- No 12:
as regards motorboats and boats which the Member State concerned makes subject to the same arrangements as land motor vehicles at the time of notification of this directive,
- No 13:
as regards nuclear civil liability and pharmaceutical products liability,
- Nos 9 and 13:
as regards compulsory insurance of building works.
These exclusions will be examined by the Council not later than 1 July 1998.
3. Pending the coordination referred to in Article 7(2)(c) of the First Directive, the Federal Republic of Germany may retain the prohibition on the simultaneous undertaking in its territory, under the arrangements for the provision of services, of health insurance with other classes.
8 The Joint Declaration of the Council and the Commission on Article 12(2) of Directive 88/357, annexed to the Council minutes when that provision was adopted, is as follows:
The Council and the Commission observe that the first indent of Article 12(2) in no way alters the fact that insurance against accidents at work, as offered in Belgium, is covered by the exclusion in Article 2(1)(d) of the First coordinating Directive.
9 Article 1(3) of First Council Directive 79/267/EEC of 5 March 1979 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct life assurance (OJ 1979 L 63, p. 1) states:
This directive concerns the taking-up and pursuit of the self-employed activity of direct insurance carried on by undertakings which are established in a Member State or wish to become established there in the form of the activities defined below:
3. operations relating to the length of human life which are prescribed by or provided for in social insurance legislation, when they are effected or managed at their own risk by assurance undertakings in accordance with the laws of a Member State.
10 Article 2(4) of that directive provides:
This directive shall not concern:
4. subject to the application of Article 1(3), insurance forming part of a statutory system of social security.
Belgian law
11 Article 2(2)(a) of the Law of 9 July 1975 on the control of insurance undertakings, as amended by the Royal Decree of 12 August 1994, states:
Paragraph 2. The present law shall not apply to the following undertakings:
2. mutual funds, private undertakings with fixed premiums, public institutions in relation to the operations referred to:
(a) by the Law of 10 April 1971 on accidents at work [and by the Law of 3 July 1967 on compensation for damage resulting from accidents at work, accidents on the way to or from work and occupational diseases in the public sector].
Pre-litigation procedure
12 By formal notice of 27 December 1995, the Commission informed the Belgian authorities that, in excluding from the scope of the national implementing legislation any insurance fund or undertaking covering accidents at work, even where those funds or undertakings operate at their own risk with a view to profit, Article 2 of the Law of 9 July 1975 on the control of insurance undertakings, as amended by the Royal Decree of 12 August 1994, is inconsistent with Directive 92/49.
13 The Belgian authorities replied on 23 February 1996, contending that the offending provision was not contrary to Community law on the ground that accidents at work in Belgium are regarded as being covered by the statutory system of social security and are therefore excluded from the scope of Directive 92/49. By letter of 13 May 1996, they confirmed their position.
14 On 17 June 1997, the Commission sent to the Kingdom of Belgium a reasoned opinion calling upon it to take, within two months, the measures necessary to comply with Directive 92/49.
15 In their reply of 16 February 1998, the Belgian authorities contended that:
- Directive 73/239 does not concern insurance forming part of a statutory scheme of social security [Article 2(1)(d) of that directive];
- the first subparagraph of Article 12(2) of Directive 88/357 confirms that the provisions peculiar to the freedom to provide services are not to apply to the transactions, undertakings and institutions to which Directive 73/239 does not apply. The declaration added to the Council minutes when that provision was adopted rules out any doubt as to the interpretation to be given to Article 2(1)(d) of Directive 73/239;
- Directive 92/49 repeals Article 12(2), second and third subparagraphs, and Article 12(3) of Directive 88/357 (Article 37 of Directive 92/49), but the abovementioned declaration, Article 12(2), first subparagraph, and Article 1 of Directive 88/357 remain applicable. Article 2(2) of Directive 92/49 expressly provides that it is to apply neither to the types of insurance or operations, nor to undertakings or institutions to which Directive 73/239 does not apply.
16 In their supplementary reply to the reasoned opinion of 24 March 1998, the Belgian authorities contended that the directives relating to non-life insurance do not apply to statutory schemes of social security, that the basic Belgian scheme in respect of accidents at work falls within the exception relating to social security and that, in any event, the Belgian scheme must be covered by the derogations provided for in Articles 55 and 90(2) of the EC Treaty (now Articles 45 EC and 86(2) EC). They also submitted that opening up the Belgian scheme to the freedom to provide services would endanger the viability of the system.
17 Taking the view that the Belgian Government's reply was not satisfactory, the Commission brought the present action.
Admissibility
18 The Belgian Government observes that the Commission states in its application that the Belgian statutory scheme of social security covering the risk of accidents at work falls within the exception relating to social security and that its complaint against Belgium is not that its basic compulsory scheme on accidents at work remains excluded from the provisions on the freedom to provide services. The complaint against the defendant concerns merely the exclusion from the scope of the Third Non-life Insurance Directive of undertakings operating in the accidents-at-work sector at their own risk.
19 According to the Belgian Government, the scheme of compulsory insurance against accidents at work, according to Belgian law, does indeed form part of the basic scheme of social security. It follows that the application concerns only the exclusion from the scope of Directive 92/49 of insurance against accidents at work which is not basic and compulsory where it is offered by private undertakings operating with a view to profit at their own risk. Given that the supplementary scheme of insurance against accidents at work falls within the scope of Directive 92/49, the application has no purpose.
20 In those circumstances, by complaining in the reply that the Kingdom of Belgium did not make basic compulsory insurance against accidents at work subject to the provisions of Directive 92/49, the Commission altered the subject-matter of the dispute in breach of Article 42(2) of the Rules of Procedure of the Court of Justice.
21 In that regard, it is sufficient to note that it is clear from the application that the action concerns insurance in respect of accidents at work in the context of the compulsory social security scheme. According to the Commission, where such insurance may be offered by insurance undertakings at their own risk, it falls within the scope of the insurance directives.
22 It follows that the application is admissible.
Substance
23 The Commission claims that the scope of Directive 92/49 is specified in Article 2(2) thereof which refers to the scope of Directive 73/239 Article 2(1)(d) of which excludes insurance forming part of a statutory system of social security. However, those provisions should be interpreted as meaning that they refer to insurance activities managed by public social security bodies not operating with a view to profit. Insurance undertakings covering the risk of accidents at work remain within the scope of Directive 92/49, even in the context of a statutory scheme of social security, where those undertakings operate at their own risk with a view to profit, which is true of insurance in relation to accidents at work in Belgium.
24 According to the Commission, that interpretation is the only one which enables Articles 2(2) and 55 of Directive 92/49 to be reconciled. Article 55 unambiguously provides that compulsory insurance against accidents at work comes within the scope of Directive 92/49 where it is offered by private undertakings at their own risk.
25 Moreover, that scheme corresponds to that referred to in Directive 79/267 (Articles 1(3) and 2(4)) and in the Agreement between the Community and the Swiss Confederation (Council Decision 91/370/EEC of 20 June 1991 on the conclusion of the Agreement between the European Economic Community and the Swiss Confederation concerning direct insurance other than life assurance (OJ 1991 L 205, p. 2)).
26 The Belgian Government denies that it has failed to fulfil its obligations.
27 It contends that the scheme of accidents at work forms part of the basic compulsory social security scheme according not only to Belgian law, but also to Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ 1971 L 149, p. 2). Insurance forming part of a social security scheme is excluded from Directive 92/49.
28 It follows, according to the Belgian Government, that, unless the basic provisions of the directives on insurance are to be contradicted, Article 55 of Directive 92/49 cannot refer to national social security schemes. Furthermore, if that article were to be interpreted in the sense referred to by the Commission, it would be invalid.
29 Directive 92/49 is based only on Articles 57(2) of the EC Treaty (now, after amendment, Article 47(2) EC) and 66 of the EC Treaty (now Article 55 EC), since the Community has no competence on that basis to regulate social security schemes.
30 According to the Belgian Government, the only possible interpretation of Article 55 of Directive 92/49 is that that provision refers only to insurance against accidents at work other than that which forms part of social security schemes.
31 The Belgian Government adds that the interpretation of the directives on insurance which it puts forward is confirmed by the Joint Declaration of the Council and the Commission on Article 12(2) of Directive 88/357, according to which insurance against accidents at work, as it is offered in Belgium, is covered by the exclusion in Article 2(1)(d) of Directive 73/239, a provision which has never been amended.
32 Finally, it contends that the social supervision which it exercises in respect of insurance undertakings can be exercised only vis-à-vis those which are established in Belgium. On that point, it relies on the need for particularly strict rules, in particular as regards the financial equilibrium of the undertakings, the exclusion of cooperative societies from that insurance, separate management, the intervention of employers and employees as regards approval and withdrawal of approval, the requirement of a guarantee and the control of tariffs and terms of contracts.
33 That protection of the victim and of those claiming under him which Belgian law provides is not the purpose of the directives applicable in relation to non-life insurance.
34 In the alternative, the Belgian Government submits that it may rely on the exceptions laid down in Articles 55 and 90(2) of the Treaty, since applying the rules on the freedom to provide services would prevent the proper functioning of the system of compulsory insurance against accidents at work in Belgium.
35 In that regard, it should be pointed out that Article 55 of Directive 92/49 refers to insurance undertakings offering, at their own risk, compulsory insurance against accidents at work within the Member States. In that case, Member States may require compliance with the specific provisions of their national law concerning such insurance, except for the provisions concerning financial supervision, which are to be the exclusive responsibility of the home Member State.
36 It follows from Article 55 of Directive 92/49 which, like Article 54 of that directive relating to health insurance, constitutes a special provision derogating from the general scheme of that directive, that such insurance falls within the scope thereof.
37 The Belgian Government does not dispute that insurance undertakings which, in Belgium, offer insurance against accidents at work do it at their own risk. It submits, however, that Article 55 of Directive 92/49 must be interpreted restrictively as meaning that it concerns only insurance against accidents at work other than that which is part of social security schemes.
38 In that regard, it is important to note that that interpretation is not in any way supported by the wording of Article 55 of Directive 92/49 and that the reasons to substantiate it which are relied on by the Belgian Government cannot be accepted.
39 First, the insurance undertakings in question pursue an economic activity of providing services which can be harmonised by a directive adopted on the basis of Articles 57(2) and 66 of the Treaty. The fact that a Member State integrates such insurance in its compulsory social security system cannot preclude such harmonisation.
40 Second, the Joint Declaration of the Council and the Commission on Article 12(2) of Directive 88/357 refers to a directive which Directive 92/49 has amended. In any event, that declaration, to which no reference is made in the wording of Article 55 of Directive 92/49, cannot be used for the purposes of interpreting that provision (see, to that effect, Case C-292/89 Antonissen [1991] ECR I-745, paragraph 18; and Case C-329/95 VAG Sverige [1997] ECR I-2675, paragraph 23).
41 Nor, third, can the Belgian scheme applicable to insurance against accidents at work constitute a basis for interpreting Article 55 of Directive 92/49 in the sense submitted by the Belgian Government. The Community legislature may have considered that financial supervision by the home Member State was compatible with the requirements of the insurance in question but that, on the other hand, those requirements justified, for the remainder, the subjection of such insurance to the specific provisions of the law of the Member State where it is offered and in particular those relied on by the Belgian Government, which are designed to ensure the attainment of the social objectives of insurance against accidents at work.
42 Furthermore, Directive 92/49 provides for the possibility for Member States to require that the general and special conditions of compulsory insurance be communicated to the competent authorities (Article 30(2)) and to require undertakings carrying on business within their territories under the right of establishment or the freedom to provide services to join and participate, on the same terms as undertakings authorised there, in any scheme designed to guarantee the payment of insurance claims to insured persons and injured third parties (Article 45(2)).
43 Finally, Article 40 of Directive 92/49 provides for measures intended to guarantee that undertakings with a branch or carrying on business under the freedom to provide services within the territory of a Member State comply with the provisions applicable to it and, in particular, in an emergency, measures designed to prevent irregularities.
44 It follows that Article 2(2) of Directive 92/49 must be interpreted in the light of Article 55, so that Directive 92/49 is applicable to insurance forming part of a statutory scheme of social security offered by insurance undertakings at their own risk.
45 As to the argument based on Articles 55 and 90(2) of the Treaty, it is sufficient to state that those provisions cannot be relied on in a field which, as in the present case, is the subject of harmonisation, in the context of which the Community legislature has taken account of the general interests referred to by the Belgian Government, in contradiction to the rules of that harmonisation.
46 In the light of all the foregoing, it must be declared that, by adopting and maintaining in force Article 2 of the Law of 9 July 1975 on the control of insurance undertakings, as amended by the Royal Decree of 12 August 1994, the Kingdom of Belgium has failed to fulfil its obligations under Directive 92/49.
Decision on costs
Costs
47 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Commission applied for an order for costs and the Kingdom of Belgium was unsuccessful, it must be ordered to pay the costs.
Operative part
On those grounds,
THE COURT (Sixth Chamber)
hereby:
1. Declares that, by adopting and maintaining in force Article 2 of the Law of 9 July 1975 on the control of insurance undertakings, as amended by the Royal Decree of 12 August 1994, the Kingdom of Belgium has failed to fulfil its obligations under Council Directive 92/49/EEC of 18 June 1992 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);
2. Orders the Kingdom of Belgium to pay the costs.