# CE2004065EN.01004901.xml

| 13.3.2004 | EN | Official Journal of the European Union | CE 65/49 |
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13.3.2004

EN

Official Journal of the European Union

CE 65/49

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(2004/C 65 E/048)

WRITTEN QUESTION E-0854/03

by Christopher Huhne (ELDR) to the Commission

(20 March 2003)

Subject:   Prudential supervision

Subject:

| 1. | Is the Commission satisfied that the current arrangements for the prudential supervision of Lloyd's insurance market are compliant with EU directives? |
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1.

Is the Commission satisfied that the current arrangements for the prudential supervision of Lloyd's insurance market are compliant with EU directives?

| 2. | Is the Commission satisfied that the arrangements over the last 20 years for the United Kingdom's prudential supervision of the Lloyd's insurance market have been compliant with EU directives at all stages? |
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2.

Is the Commission satisfied that the arrangements over the last 20 years for the United Kingdom's prudential supervision of the Lloyd's insurance market have been compliant with EU directives at all stages?

| 3. | If not, would the UK Government bear some responsibility to investors in that market? |
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3.

If not, would the UK Government bear some responsibility to investors in that market?

| 4. | What avenues of redress might they have under EU law? |
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4.

What avenues of redress might they have under EU law?

Answer given by Mr Bolkestein on behalf of the Commission

(2 May 2003)

(2 May 2003)

| 1. | The Commission has been carefully examining the compatibility of the framework for the regulation and supervision of the Lloyd's insurance market and has issued two press releases in connection with its enquiries (1). The Commission has not yet completed its enquiries and is now examining the response of the United Kingdom authorities to the supplementary letter of formal notice sent in January 2003. |
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1.

The Commission has been carefully examining the compatibility of the framework for the regulation and supervision of the Lloyd's insurance market and has issued two press releases in connection with its enquiries (1). The Commission has not yet completed its enquiries and is now examining the response of the United Kingdom authorities to the supplementary letter of formal notice sent in January 2003.

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| 2. | The objective of infringement proceedings under Community law is to establish or to restore the compatibility of national law with Community law. The task of the Commission is now, therefore, to examine the compatibility of the new regulatory and supervisory regime established for Lloyd's under the Financial Services and Markets Act 2000, not to rule on the compatibility or incompatibility of the previous regime. Furthermore, the general case law of the European Court of Justice confirms that infringement procedures under Article 226 of the EC Treaty aim solely to put an end to the failure to comply with the Community law by a Member State, and not to record in abstracto that a failure existed in the past. |
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2.

The objective of infringement proceedings under Community law is to establish or to restore the compatibility of national law with Community law. The task of the Commission is now, therefore, to examine the compatibility of the new regulatory and supervisory regime established for Lloyd's under the Financial Services and Markets Act 2000, not to rule on the compatibility or incompatibility of the previous regime. Furthermore, the general case law of the European Court of Justice confirms that infringement procedures under Article 226 of the EC Treaty aim solely to put an end to the failure to comply with the Community law by a Member State, and not to record in abstracto that a failure existed in the past.

| 3 and 4. | According to the rule established by the Court of Justice in the Francovich case law (2), in the absence of Community legislation concerning reparation, it is for the internal legal order of each Member State to designate the competent courts and lay down the detailed procedural rules for legal proceedings intended fully to safeguard the rights which individuals derive from Community law. Three conditions have to be met: the result prescribed by the Directive should entail the grant of rights to individuals; it should be possible to identify the content of those rights on the basis of the provisions of the Directive; and there should be a casual link between the breach — which must be sufficiently serious (3) — of the State's obligation and the loss and damage suffered by the injured parties. The notion of a sufficiently serious breach is to be determined, together with all the other remaining conditions of the Francovich test, solely by the national court deciding on the issue of damages. |
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3 and 4.

According to the rule established by the Court of Justice in the Francovich case law (2), in the absence of Community legislation concerning reparation, it is for the internal legal order of each Member State to designate the competent courts and lay down the detailed procedural rules for legal proceedings intended fully to safeguard the rights which individuals derive from Community law. Three conditions have to be met: the result prescribed by the Directive should entail the grant of rights to individuals; it should be possible to identify the content of those rights on the basis of the provisions of the Directive; and there should be a casual link between the breach — which must be sufficiently serious (3) — of the State's obligation and the loss and damage suffered by the injured parties. The notion of a sufficiently serious breach is to be determined, together with all the other remaining conditions of the Francovich test, solely by the national court deciding on the issue of damages.

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(1)  Commission Press Releases IP/01/1880 and IP/03/97.

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(2)  See judgement of the Court of 19 December 1991, Francovich and Bonifaci, joined cases C-6/90 and C-9/90, ECR(1991) p. I-5357.

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(3)  See judgement of the Court of 5 March 1996, Brasserie du Pêcheur and The Queen v. Secretary of State for transport, ex parte: Factortame Ltd and others, joined cases C-46/93 and C-48/93, ECR(1996) p. I-1029.

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