1992L0096 — EN — 17.11.2000 — 002.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL DIRECTIVE 92/96/EEC
of 10 November 1992
on the coordination of laws, regulations and administrative provisions relating to direct life
assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance Directive)
(OJ L 360, 9.12.1992, p. 1)
Amended by:
Official Journal
Nopage date
►M1European Parliament and Council Directive 95/26/EC of 29 June 1995 L 168 7 18.7.1995
►M2Directive 2000/64/EC of the European Parliament and of the Council of 7
November 2000 L 290 27 17.11.2000
Corrected by:
►C1Corrigendum, OJ L 311, 14.11.1997, p. 34 (92/96/EEC)
NB: This consolidated version contains references to the European unit of account and/or the ecu, which from 1 January 1999
should be understood as references to the euro — Council Regulation (EEC) No 3308/80 (OJ L 345, 20.12.1980, p. 1) andCouncil Regulation (EC) No 1103/97 (OJ L 162, 19.6.1997, p. 1).
▼B
COUNCIL DIRECTIVE 92/96/EEC
of 10 November 1992
on the coordination of laws, regulations and administrative
provisions relating to direct life assurance and amending Directives
79/267/EEC and 90/619/EEC (third life assurance Directive)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European EconomicCommunity, and in particular Articles 57 (2) and 66 thereof,
Having regard to the proposal from the Commission(
1),
In cooperation with the European Parliament(2),
Having regard to the opinion of the Economic and Social Committee(3),
1.Whereas it is necessary toco mplete the internal market in direct
life assurance, from the point of view both of the right of
establishment and of the freedom to provide services, to make iteasier for assurance undertakings with head offices in theCommunity to cover commitments situated within the Commu-nity;
2.Whereas the Second Council Directive 90/619/EEC of 8November 1990 on the coordination of laws, regulations andadministrative provisions relating to direct life assurance, laying
down provisions to facilitate the effective exercise of freedom to
provide services and amending Directive 79/267/EEC(
4) has
already contributed substantially to the achievement of theinternal market in direct life assurance by granting policy-holderswho, by virtue of the fact that they take the initiative in entering
into a commitment with an assurance undertaking in another
Member State, do not require special protection in the MemberState of the commitment complete freedom to avail themselves ofthe widest possible life assurance market;
3.Whereas Directive 90/619/EEC therefore represents an importantstage in the merging of national markets into an integrated marketand that stage must be supplemented by other Communityinstruments with a view to enabling all policy-holders, irrespec-
tive of whether they themselves take the initiative, to have
recourse to any assurer with a head office in the Community whocarries on business there, under the right of establishment or thefreedom to provide services, while guaranteeing them adequateprotection;
4.Whereas this Directive forms part of the body of Communitylegislation already enacted which includes the First CouncilDirective 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(
5)
and Council Directive 91/674/EEC of 19 December 1991 on theannual accounts and consolidated accounts of insurance under-takings(
6);
5.Whereas the approach adopted consists in bringing about suchharmonization as is essential, necessary and sufficient to achievethe mutual recognition of authorizations and prudential control
systems, thereby making it possible to grant a single authorization
valid throughout the Community and apply the principle ofsupervision by the home Member State;1992L0096 — EN — 17.11.2000 — 002.001 — 2
(1) OJ NoC 99, 16. 4. 1991, p. 2.
(2) OJ No C 176, 13. 7. 1992, p. 93; and Decision of 28 October 1992 (not yet
published in the Official Journal).
(3) OJ NoC 14, 20. 1. 1992, p. 11.
(4) OJ NoL 330, 29. 11. 1990, p. 50.
(5) OJ NoL 63, 13. 3. 1979, p. 1. Directive as last amended by the Seco nd
Directive 90/619/EEC (OJ NoL 330, 29. 11. 1990, p. 50).
(6) OJ NoL 374, 31. 12. 1991, p. 7.
▼B
6.Whereas, as a result, the taking up and the pursuit of the business
of assurance are henceforth to be subject to the grant of a single
official authorization issued by the competent authorities of theMember State in which an assurance undertaking has its headoffice; whereas such authorization enables an undertaking to carryon business throughout the Community, under the right ofestablishment or the freedom to provide services; whereas the
Member State of the branch or of the provision of services may
no longer require assurance undertakings which wish to carry onassurance business there and which have already been authorizedin their home Member State to seek fresh authorization; whereasDirectives 79/267/EEC and 90/619/EEC should therefore be
amended along those lines;
7.Whereas the competent authorities of home Member States will
henceforth be responsible for monitoring the financial health ofassurance undertakings, including their state of solvency, theestablishment of adequate technical provisions and the covering
of those provisions by matching assets;
8.Whereas the performance of the operations referred to in Article 1
(2) (c) of Directive 79/267/EEC cannot under any circumstancesaffect the powers conferred on the respective authorities withregard to the entities holding the assets with which that provision
is concerned;
9.Whereas certain provisions of this Directive define minimum
standards; whereas a home Member State may lay down stricterrules for assurance undertakings authorized by its own competentauthorities;
10.Whereas the competent authorities of the Member States musthave at their disposal such means of supervision as are necessaryto ensure the orderly pursuit of business by assurance under-takings throughout the Community whether carried on under theright of establishment or the freedom to provide services;
whereas, in particular, they must be able to introduce appropriate
safeguards or impose sanctions aimed at preventing irregularitiesand infringements of the provisions on assurance supervision;
11.Whereas the provisions on transfers of portfolios must be adaptedto bring them into line with the single legal authorization system
introduced by this Directive;
12.Whereas provision should be made for the specialization rule laid
down by Directive 79/267/EEC to be relaxed so that thoseMember States which sowish are able togrant the sameundertaking authorizations for the classes referred to in the Annex
toDirective 79/267/EEC and the insurance business co ming
under classes 1 and 2 in the Annex toDirective 73/239/EEC(
1);
whereas that possibility may, however, be subject to certainconditions as regards compliance with accounting rules and ruleson winding-up;
13.Whereas it isnecessary from the point of view of the protection oflives assured that every assurance undertaking should establishadequate technical provisions; whereas the calculation of suchprovisions is based for the most part on actuarial principles;whereas those principles should be coordinated in order tofacilitate mutual recognition of the prudential rules applicable in
the various Member States;
14.Whereas it is desirable, in the interests of prudence, to establish a
minimum of coordination of rules limiting the rate ofinterest usedin calculating the technical provisions; whereas, for the purposesof such limitation, since existing methods are all equally correct,1992L0096 — EN — 17.11.2000 — 002.001 — 3
(1) 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 No L
228, 16. 8. 1973, p. 3). Directive as last amended by Directive 90/618/EEC
(OJ NoL 330, 29. 11. 1990, p. 44).
▼B
prudential and equivalent, it seems appropriate to leave Member
States a free choice as to the method to be used;
15.Whereas the rules governing the spread, localization andmatching of the assets used to cover technical provisions mustbe coordinated in order to facilitate the mutual recognition ofMember States' rules; whereas that coordination must takeaccount of the measures on the liberalization of capital move-ments provided for in Council Directive 88/361/EEC of 24 June
1988 for the implementation of Article 67 of the Treaty(
1) and the
progress made by the Community towards economic andmonetary union;
16.Whereas, however, the home Member State may not requireassurance undertakings toinvest the assets co vering their
technical provisions in particular categories of assets, as such a
requirement would be incompatible with the measures on theliberalization of capital movements provided for in Directive 88/361/EEC;
17.Whereas, pending the adoption of a directive on investment
services harmonizing inter alia the definition of the concept of a
regulated market, for the purposes of this Directive and withoutprejudice to such future harmonization that concept must bedefined provisionally, to be replaced by the definition harmonizedat Community level, which will give the home Member State ofthe market the responsibilities for these matters which this
Directive transitionally gives to the assurance undertaking's home
Member State;
18.Whereas the list of items of which the solvency margin requiredby Directive 79/267/EEC may be made up must be supplementedto take account of new financial instruments and of the facilities
granted to other financial institutions for the constitution of their
own funds;
19.Whereas the harmonization of assurance contract law is not aprior condition for the achievement of the internal market inassurance; whereas, therefore, the oppportunity afforded to theMember States of imposing the application of their law to
assurance contracts covering commitments within their territories
is likely to provide adequate safeguards for policy-holders;
20.Whereas within the framework of an internal market it is in thepolicy-holder's interest that he should have access to the widestpossible range of assurance products available in the Community
so that he can choose that which is best suited to his needs;
whereas it is for the Member State of the commitment to ensurethat there is nothing to prevent the marketing within its territoryof all the assurance products offered for sale in the Community aslong as they do not conflict with the legal provisions protecting
the general good in force in the Member State of the commitment
and in so far as the general good is not safeguarded by the rules ofthe home Member State, provided that such provisions must beapplied without discrimination to all undertakings operating inthat Member State and be objectively necessary and in proportiontothe o bjective pursued;
21.Whereas the Member States must be able toensure that theassurance products and contract documents used, under the rightof establishment or the freedom to provide services, to covercommitments within their territories comply with such specificlegal provisions protecting the general good as are applicable;
whereas the systems of supervision to be employed must meet the
requirements of an internal market but their employment may notconstitute a prior condition for carrying on assurance business;whereas, from this standpoint, systems for the prior approval ofpolicy conditions do not appear to be justified; whereas it istherefore necessary to provide for other systems better suited to1992L0096 — EN — 17.11.2000 — 002.001 — 4
(1) OJ NoL 178, 8. 7. 1988, p. 5.
▼B
the requirements of an internal market which enable every
Member State to guarantee policy-holders adequate protection;
22.Whereas, for the purposes of implementing actuarial principles inconformity with this Directive, the home Member State maynevertheless require systematic notification of the technical basesused for calculating scales of premiums and technical provisions,with such notification of technical bases excluding notification ofthe general and special policy conditions and the undertaking's
commercial rates;
23.Whereas in a single assurance market the consumer will have a
wider and more varied choice of contracts; whereas, if he is toprofit fully from this diversity and from increased competition, hemust be provided with whatever information is necessary to
enable him to choose the contract best suited to his needs;
whereas this information requirement is all the more important asthe duration of commitments can be very long; whereas theminimum provisions must therefore be coordinated in order forthe consumer to receive clear and accurate information on the
essential characteristics of the products proposed to him as well as
the particulars of the bodies to which any complaints of policy-holders, assured persons or beneficiaries of contracts may beaddressed;
24.Whereas publicity for assurance products is an essential means of
enabling assurance business tobe carried o n effectively within the
Community; whereas it is necessary to leave open to assuranceundertakings the use of all normal means of advertising in theMember State of the branch or of provision of services; whereasMember States may nevertheless require compliance with theirnational rules on the form and content of advertising, whether laid
down pursuant to Community legislation on advertising or
adopted by Member States for reasons of the general good;
25.Whereas, within the framework of the internal market, noMember State may continue to prohibit the simultaneous carryingon of assurance business within its territory under the right of
establishment and the freedom to provide services; whereas the
option granted to Member States in this connection by Directive90/619/EEC should therefore be abolished;
26.Whereas provision should be made for a system of penalties to beimposed when, in the Member State in which the commitment is
entered into, an assurance undertaking does not comply with
those provisions protecting the general good that are applicable toit;
27.Whereas some Member States do not subject assurance transac-tions to any form of indirect taxation, while the majority apply
special taxes and other forms of contribution; whereas the
structures and rates of such taxes and contributions varyconsiderably between the Member States in which they areapplied; whereas it is desirable toprevent existing differencesleading to distortions of competition in assurance services
between Member States; whereas, pending subsequent harmoni-
zation, application of the tax systems and other forms ofcontribution provided for by the Member States in whichcommitments entered into are likely to remedy that problemand it is fo r the Member States tomake arrangements toensurethat such taxes and contributions are collected;
28.Whereas it is important to introduce Community coordination onthe winding-up of assurance undertakings; whereas it ishenceforth essential to provide, in the event of the winding-upof an assurance undertaking, that the system of protection in placein each Member State must guarantee equality of treatment for all
assurance creditors, irrespective of nationality and of the method
of entering into the commitment;
29.Whereas technical adjustments tothe detailed rules laid do wn inthis Directive may be necessary fro m time totime totake acco untof the future development of the assurance industry; whereas the1992L0096 — EN — 17.11.2000 — 002.001 — 5
▼B
Commission will make such adjustments as and when necessary,
after consulting the Insurance Committee set up by Directive 91/675/EEC(
1), in the exercise of the implementing powers
conferred on it by the Treaty;
30.Whereas it is necessary to adopt specific provisions intended to
ensure smooth transition from the legal arrangements in existencewhen this Directive becomes applicable to those that itintroduces; whereas care should be taken in such provisions not
to place an additional workload on Member States' competent
authorities;
31.Whereas, pursuant to Article 8c of the Treaty, account should betaken of the extent of the effort which must be made by certaineconomies at different stages of development; whereas, therefore,transitional arrangements should be adopted for the gradual
application of this Directive by certain Member States,
HAS ADOPTED THIS DIRECTIVE:
TITLE I
DEFINITIONS AND SCOPE
Article 1
For the purposes of this Directive:
(a)assurance undertaking shall mean an undertaking which has
received official authorization in accordance with Article 6 of
Directive 79/267/EEC;
(b)branchshall mean an agency or branch of an assurance under-
taking, having regard toArticle 3 o f Directive 90/619/EEC;
(c)commitment shall mean a commitment represented by one of the
kinds of insurance or operations referred to in Article 1 of Directive79/267/EEC;
(d)home Member State shall mean the Member State in which the head
office of the assurance undertaking covering the commitment is
situated;
(e)Member State of the branch shall mean the Member State in which
the branch covering the commitment is situated;
(f)Member State of the provision of services shall mean the Member
State of the commitment, as defined in Article 2 (e) of Directive 90/619/EEC, if the commitment is covered by an assurance under-taking or a branch situated in another Member State;
(g)controlshall mean the relationship between a parent undertaking
and a subsidiary, as defined in Article 1 of Directive 83/349/
EEC(
2), or a similar relationship between any natural or legal
person and an undertaking;
(h)qualifying holding shall mean a direct or indirect holding in an
undertaking which represents 10 % or more of the capital or of thevoting rights or which makes it possible to exercise a significant
influence over the management of the undertaking in which a
holding subsists.
For the purposes of this definition, in the context of Articles 7 and
14 and of the other levels of holding referred to in Article 14, the1992L0096 — EN — 17.11.2000 — 002.001 — 6
(1) OJ NoL 374, 31. 12. 1991, p. 32.
(2) Seventh Council Directive 83/349/EEC of 13 June 1983 based on Article 54
(3) (g) of the Treaty on consolidated accounts (OJ No L 193, 18. 7. 1983, p.1). Directive as last amended by Directive 90/605/EEC (OJ NoL 317, 16. 11.
1990, p. 60).
▼B
voting rights referred to in Article 7 of Directive 88/627/EEC(1)
shall be taken into consideration;
(i)parent undertaking shall mean a parent undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC;
(j)subsidiary shall mean a subsidiary undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC; any subsidiary of asubsidiary undertaking shall alsobe regarded as a subsidiary o f theundertaking which is those undertakings' ultimate parent under-
taking;
(k)regulated market shall mean a financial market regarded by an
undertaking's home Member State as a regulated market pending
the adoption of a definition in a Directive on investment services
and characterized by:
— regular operation, and
— the fact that regulations issued or approved by the appropriate
authorities define the conditions for the operation of the market,
the conditions for access to the market and, where CouncilDirective 79/279/EEC of 5 March 1979 coordinating theconditions for the admission of securities to official stock-exchange listing(
2) applies, the conditions for admission to
listing imposed in that Directive or, where that Directive does
not apply, the conditions to be satisfied by a financialinstrument in order to be effectively dealt in on the market.
For the purposes of this Directive, a regulated market may be
situated in a Member State or in a third country. In the latter event,the market must be recognized by the undertaking's home MemberState and meet comparable requirements. Any financial instrumentsdealt in must be of a quality comparable to that of the instrumentsdealt in on the regulated market or markets of the Member State in
question;
(l)competent authorities shall mean the national authorities which are
empowered by law or regulation to supervise assurance under-
takings;
(m) ‘close links’ shall mean a situation in which two or more natural or
legal persons are linked by:
(a) ‘participation’, which shall mean the ownership, direct or by
way of control, of 20 % or more of the voting rights or capital
of an undertaking or
(b) ‘control’, which shall mean the relationship between a parent
undertaking and a subsidiary, in all the cases referred toin
Article 1 (1) and (2) of Directive 83/349/EEC(
3), or a similar
relationship between any natural or legal person and anundertaking; any subsidiary undertaking of a subsidiary under-taking shall also be considered a subsidiary of the parentundertaking which is at the head of those undertakings.
A situation in which two or more natural or legal persons are
permanently linked to one and the same person by a controlrelationship shall also be regarded as constituting a close linkbetween such persons.1992L0096 — EN — 17.11.2000 — 002.001 — 7
(1) Council Directive 88/627/EEC of 12 December 1988 on the information to be
published when a major holding in a listed company is acquired or disposedof (OJ No L 348, 17. 12. 1988, p. 62).
(
2) OJ NoL 66, 13. 3. 1979, p. 21. Directive as last amended by Directive 82/
148/EEC (OJ NoL 62, 5. 3. 1982, p. 22).
(3) OJ NoL 193, 18. 7. 1983, p. 1. Directive as last amended by Directive 90/
605/EEC (OJ NoL 317, 16. 11. 1990, p. 60).▼M1
▼B
Article 2
1. This Directive shall apply tothe co mmitments and undertakings
referred toin Article 1 o f Directive 79/267/EEC.
2. In Article 1 (2) of Directive 79/267/EEC the words ‘and are
authorized in the country concerned’ shall be deleted.
3. This Directive shall apply neither to classes of insurance or
operations nor to undertakings or institutions to which Directive 79/267/EEC does not apply, nor shall it apply to the bodies referred to in Article4 of that Directive.
TITLE II
THE TAKING-UP OF THE BUSINESS OF LIFE ASSURANCE
Article 3
Article 6 of Directive 79/267/EEC shall be replaced by the following:
‘Article 6
The taking-up of the activities covered by this Directive shall be
subject to prior official authorization.
Such authorization shall be sought from the authorities of the home
Member State by:
(a) any undertaking which establishes its head office in the territory
of that State;
(b) any undertaking which, having received the authorization
required in the first subparagraph, extends its business toan
entire class or to other classes.’
Article 4
Article 7 of Directive 79/267/EEC shall be replaced by the following:
‘Article 7
1. Authorization shall be valid for the entire Community. It shall
permit an undertaking tocarry o n business there, under either theright of establishment or freedom to provide services.
2. Authorization shall be granted for a particular class of
assurance as listed in the Annex. It shall cover the entire class,unless the applicant wishes to cover only some of the riskspertaining tothat class.
The competent authorities may restrict authorization requested for
one of the classes to the operations set out in the scheme ofoperations referred to in Article 9.
Each Member State may grant authorization for two or more of the
classes, where its national laws permit such classes to be carried onsimultaneously.’
Article 5
Article 8 of Directive 79/267/EEC shall be replaced by the following:
‘Article 8
1. The home Member State shall require every assurance
undertaking for which authorization is sought to:
(a) adopt one of the following forms:
— in the case of the Kingdom of Belgium: “société anonyme/
naamloze vennootschap”, “société en commandite paractions/commanditaire vennootschap op aandelen”, “associa-tion d'assurance mutuelle/onderlingeverzekeringsvereniging”, “société coopérative/coöperatievevennootschap”,1992L0096 — EN — 17.11.2000 — 002.001 — 8
▼B
— in the case of the Kingdom of Denmark: “aktieselskaber”,
“gensidige selskaber”, “pensionskasser omfattet af lov omforsikringsvirksomhed (tværgående pensionskasser)”,
— in the case of the Federal Republic of Germany: “Aktienge-
sellschaft”, “Versicherungsverein auf Gegenseitigkeit”,“öffentlich-rechtliches Wettbewerbsversicherungsunter-
nehmen”,
— in the case of the French Republic: “société anonyme”,
“société d'assurance mutuelle”, “institution de prévoyance
régie par le code de la sécurité sociale”, “institution de
prévoyance régie par le code rural” and “mutuelles régies parle code de la mutualité”,
— in the case of Ireland: incorporated companies limited by
shares or by guarantee or unlimited, societies registeredunder the Industrial and Provident Societies Acts andsocieties registered under the Friendly Societies Acts,
— in the case of the Italian Republic: “societá per azioni”,
“societá cooperativa”, “mutua di assicurazione”,
— in the case of the Grand Duchy of Luxembourg: “société
anonyme”, “société en commandite par actions”, “associationd'assurances mutuelles”, “société coopérative”,
— in the case of the Kingdom of the Netherlands: “naamloze
vennootschap”, “onderlinge waarborgmaatschappij”,
— in the case of the United Kingdom: incorporated companies
limited by shares or by guarantee or unlimited, societies
registered under the Industrial and Provident Societies Acts,
societies registered or incorporated under the FriendlySocieties Acts, the association of underwriters known asLloyd's,
— in the case of the Hellenic Republic: “ ανώνυµη εταιρία ”,
— in the case of the Kingdom of Spain: “sociedad anonima”,
“sociedad mutua”, “sociedad cooperativa”,
— in the case of the Portuguese Republic: “sociedade anónima”,
“mútua de seguros”.
An assurance undertaking may also adopt the form of a European
company when that has been established.
Furthermore, Member States may, where appropriate, set up
undertakings in any public-law form provided that such bodieshave as their object insurance operations under conditions equivalent
to those under which private-law undertakings operate;
(b) limit its objects to the business provided for in this Directive and
operations directly arising therefrom, to the exclusion of all
other commercial business;
(c) submit a scheme of operations in accordance with Article 9;
(d) possess the minimum guarantee fund provided for in Article 20
(2);
(e) be effectively run by persons of good repute with appropriate
professional qualifications or experience.
2. An undertaking seeking authorization to extend its business to
other classes or to extend an authorization covering only some of therisks pertaining too ne class shall be required tosubmit a scheme o f
operations in accordance with Article 9.
It shall, furthermore, be required to show proof that it possesses the
solvency margin provided for in Article 19 and the guarantee fundreferred toin Article 20 (1) and (2).
3. Member States shall not adopt provisions requiring the prior
approval or systematic notification of general and special policy
conditions, of scales of premiums, of the technical bases, used inparticular for calculating scales of premiums and technicalprovisions or of forms and other printed documents which anassurance undertaking intends touse in its dealings with po licy-holders.1992L0096 — EN — 17.11.2000 — 002.001 — 9
▼B
Notwithstanding the first subparagraph, for the sole purpose of
verifying compliance with national provisions concerning actuarialprinciples, the home Member State may require systematic
notification of the technical bases used for calculating scales of
premiums and technical provisions, without that requirementconstituting a prior condition for an undertaking to carry on itsbusiness.
Nothing in this Directive shall prevent Member States from
maintaining in force or introducing laws, regulations or adminis-
trative provisions requiring approval of the memorandum andarticles of association and the communication of any otherdocuments necessary for the normal exercise of supervision.
Not later than five years after the date of entry into force of
Directive 92/96/EEC(*), the Commission shall submit a report to
the Council on the implementation of this paragraph.
4. The abovementioned provisions may not require that any
application for authorization be considered in the light of theeconomic requirements of the market.’
Article 6
Article 9 of Directive 79/267/EEC shall be replaced by the following:
‘Article 9
The scheme of operations referred to in Article 8 (1) (c) and (2) shall
include particulars or proof concerning:
(a) the nature of the commitments which the undertaking proposes
toco ver;
(b) the guiding principles as toreassurance;
(c) the items constituting the minimum guarantee fund;
(d) estimates relating to the costs of setting up the administrative
services and the organization for securing business and thefinancial resources intended to meet those costs;in addition, for
the first three financial years:
(e) a plan setting out detailed estimates of income and expenditure
in respect of direct business, reassurance acceptances andreassurance cessions;
(f) a forecast balance sheet;
(g) estimates relating tothe financial reso urces intended toco ver
underwriting liabilities and the solvency margin.’
Article 7
The competent authorities of the home Member State shall not grant an
undertaking authorization to take up the business of assurance beforethey have been informed of the identities of the shareholders or
members, direct or indirect, whether natural or legal persons, who have
qualifying holdings in that undertaking and of the amounts of thoseholdings.
The same authorities shall refuse authorization if, taking into account the
need to ensure the sound and prudent management of an assuranceundertaking, they are not satisfied as to the qualifications of theshareholders or members.1992L0096 — EN — 17.11.2000 — 002.001 — 10
(*) OJ NoL 360, 9. 12. 1992, p. 1.
▼B
TITLE III
HARMONIZATION OF CONDITIONS GOVERNING PURSUIT OF
BUSINESS
Chapter 1
Article 8
Article 15 of Directive 79/267/EEC shall be replaced by the following:
‘Article 15
1. The financial supervision of an assurance undertaking,
including that of the business it carries on either through branchesor under the freedom to provide services, shall be the sole
responsibility of the home Member State. If the competent
authorities of the Member State of the commitment have reason toconsider that the activities of an assurance undertaking might affectits financial soundness, they shall inform the competent authoritiesof the undertaking's home Member State. The latter authorities shalldetermine whether the undertaking is complying with the prudential
principles laid down in this Directive.
2. That financial supervision shall include verification, with
respect to the assurance undertaking's entire business, of its state ofsolvency, the establishment of technical provisions, includingmathematical provisions, and of the assets covering them, in
accordance with the rules laid down or practices followed in the
home Member State pursuant to the provisions adopted atCommunity level.
3. The competent authorities of the home Member State shall
require every assurance undertaking tohave so und administrativeand accounting procedures and adequate internal control mechan-
isms.’
Article 9
Article 16 of Directive 79/267/EEC shall be replaced by the following:
‘Article 16
The Member State of the branch shall provide that, where an
assurance undertaking authorized in another Member State carrieson business through a branch, the competent authorities of the home
Member State may, after having first informed the competent
authorities of the Member State of the branch, carry out themselves,or through the intermediary of persons they appoint for that purpose,on-the-spot verification of the information necessary to ensure thefinancial supervision of the undertaking. The authorities of theMember State of the branch may participate in that verification’.
Article 10
Article 23 (2) and (3) of Directive 79/267/EEC shall be replaced by the
following:
‘2. Member States shall require assurance undertakings with head
offices within their territories to render periodically the returns,
together with statistical documents, which are necessary for the
purposes of supervision. The competent authorities shall provideeach other with any documents and information that are useful forthe purposes of supervision.
3. Every Member State shall take all steps necessary toensure
that the competent authorities have the powers and means necessary
for the supervision of the business of assurance undertakings withhead offices within their territories, including business carried onoutside those territories, in accordance with the Council directivesgoverning those activities and for the purpose of seeing that they areimplemented.1992L0096 — EN — 17.11.2000 — 002.001 — 11
▼B
These powers and means must, in particular, enable the competent
authorities to:
(a) make detailed enquiries regarding the undertaking's situation and
the whole of its business, inter alia by:
— gathering information or requiring the submission of
documents concerning its assurance business,
— carrying out on-the-spot investigations at the undertaking's
premises;
(b) take any measures, with regard tothe undertaking, its directo rs
or managers or the persons who control it, that are appropriate
and necessary toensure that the undertaking's business co ntinues
to comply with the laws, regulations and administrativeprovisions with which the undertaking must comply in eachMember State and in particular with the scheme of operations inso far as it remains mandatory, and to prevent or remedy anyirregularities prejudicial to the interests of the assured persons;
(c) ensure that those measures are carried out, if need be by
enforcement, where appropriate through judicial channels.
Member States may also make provision for the competent
authorities to obtain any information regarding contracts which are
held by intermediaries.’
Article 11
1. Article 6 (2) to(7) o f Directive 90/619/EEC shall be deleted.
2. Under the conditions laid down by national law, each Member
State shall authorize assurance undertakings with head offices within its
territory to transfer all or part of their portfolios of contracts, concludedunder either the right of establishment or the freedom to provideservices, to an accepting office established within the Community, if thecompetent authorities of the home Member State of the accepting office
certify that after taking the transfer into account the latter possesses the
necessary solvency margin.
3. Where a branch proposes to transfer all or part of its portfolio of
contracts, concluded under either the right of establishment or thefreedom to provide services, the Member State of the branch shall beconsulted.
4. In the circumstances referred toin paragraph 2 and 3, the
authorities of the home Member State of the transferring undertakingshall authorize the transfer after obtaining the agreement of the
competent authorities of the Member States of the commitment.
5. The competent authorities of the Member States consulted shall
give their opinion or consent to the competent authorities of the homeMember State of the transferring assurance undertaking within threemonths of receiving a request; the absence of any response within thatperiod from the authorities consulted shall be considered equivalent to a
favourable opinion or tacit consent.
6. A transfer authorized in accordance with this Article shall be
published as laid down by national law in the Member State of the
commitment. Such transfers shall automatically be valid against policy-holders, the assured persons and any other person having rights orobligations arising out of the contracts transferred.
This provision shall not affect the Member States' rights to give policy-
holders the option of cancelling contracts within a fixed period after a
transfer.
Article 12
1. Article 24 of Directive 79/267/EEC shall be replaced by the
following:1992L0096 — EN — 17.11.2000 — 002.001 — 12
▼B
‘Article 24
1. If an undertaking does not comply with Article 17, the
competent authority of its home Member State may prohibit the free
disposal of its assets after having communicated its intention to thecompetent authorities of the Member States of commitment.
2. For the purposes of restoring the financial situation of an
undertaking the solvency margin of which has fallen below the
minimum required under Article 19, the competent authority of the
home Member State shall require that a plan for the restoration of asound financial position be submitted for its approval.
In exceptional circumstances, if the competent authority is of the
opinion that the financial situation of the undertaking will further
deteriorate, it may also restrict or prohibit the free disposal of theundertaking's assets. It shall inform the authorities of other MemberStates within the territories of which the undertaking carries onbusiness of any measures it has taken and the latter shall, at therequest of the former, take the same measures.
3. If the solvency margin falls below the guarantee fund as
defined in Article 20, the competent authority of the home MemberState shall require the undertaking tosubmit a sho rt-term financescheme for its approval.
It may also restrict or prohibit the free disposal of the undertaking's
assets. It shall inform the authorities of other Member States withinthe territories of which the undertaking carries on businessaccordingly and the latter shall, at the request of the former, takethe same measures.
4. The competent authorities may further take all measures
necessary to safeguard the interests of the assured persons in thecases provided for in paragraphs 1, 2 and 3.
5. Each Member State shall take the measures necessary tobe
able in accordance with its national law to prohibit the free disposal
of assets located within its territory at the request, in the casesprovided for in paragraphs 1, 2 and 3, of the undertaking's homeMember State, which shall designate the assets tobe co vered bysuch measures.’
Article 13
Article 26 of Directive 79/267/EEC shall be replaced by the following:
‘Article 26
1. Authorization granted to an assurance undertaking by the
competent authority of its home Member State may be withdrawn by
that authority if that undertaking:
(a) does not make use of the authorization within 12 months,
expressly renounces it or ceases to carry on business for more
than six months, unless the Member State concerned has madeprovision for authorization to lapse in such cases;
(b) no longer fulfils the conditions for admission;
(c) has been unable, within the time allowed, to take the measures
specified in the restoration plan or finance scheme referred to inArticle 24;
(d) fails seriously in its obligations under the regulations to which it
is subject.
In the event of the withdrawal or lapse of the authorization, the
competent authority of the home Member State shall notify thecompetent authorities of the other Member States accordingly andthey shall take appropriate measures to prevent the undertaking from
commencing new operations within their territories, under either the
freedom of establishment or the freedom to provide services. Thehome Member State's competent authority shall, in conjunction withthose authorities, take all necessary measures to safeguard theinterests of the assured persons and shall restrict, in particular, thefree disposal of the assets of the undertaking in accordance with1992L0096 — EN — 17.11.2000 — 002.001 — 13
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Article 24 (1), (2), second subparagraph, or (3), second subpara-
graph.
2. Any decision to withdraw an authorization shall be supported
by precise reasons and notified to the undertaking in question.’
Article 14
1. Member States shall require any natural or legal person ►C1who
proposes to hold, ◄directly or indirectly, a qualifying holding in an
assurance undertaking first to inform the competent authorities of the
home Member State, indicating the size of the intended holding. Such aperson must likewise inform the competent authorities of the homeMember State if he proposes to increase his qualifying holding so thatthe proportion of the voting rights or of the capital held by him wouldreach or exceed 20, 33 or 50 % or so that the assurance undertaking
would become his subsidiary.
The competent authorities of the home Member State shall have a
maximum of three months from the date of the notification provided for
in the first subparagraph to oppose such a plan if, in view of the need to
ensure sound and prudent management of the assurance undertaking,they are not satisfied as to the qualifications of the person referred to inthe first subparagraph. If they do not oppose the plan in question theymay fix a maximum period for its implementation.
2. Member States shall require any natural or legal person who
proposes to dispose, directly or indirectly, of a qualifying holding in anassurance undertaking first to inform the competent authorities of thehome Member State, indicating the size of his intended holding. Such aperson must likewise inform the competent authorities if he proposes to
reduce his qualifying holding so that the proportion of the voting rights
or of the capital held by him would fall below 20, 33 or 50 % or so thatthe assurance undertaking would cease to be his subsidiary.
3. On becoming aware of them, assurance undertakings shall inform
the competent authorities of their home Member States of any
acquisitions or disposals of holdings in their capital that cause holdingsto exceed or fall below one of the thresholds referred to in paragraphs 1and 2.
They shall also, at least once a year, inform them of the names of
shareholders and members possessing qualifying holdings and the sizesof such holdings as shown, for example, by the information received atthe annual general meetings of shareholders and members or as a resultof compliance with the regulations relating to companies listed on stock
exchanges.
4. Member States shall require that, if the influence exercised by the
persons referred to in paragraph 1 is likely to operate to the detriment ofthe prudent and sound management of the assurance undertaking, the
competent authorities of the home Member State shall take appropriate
measures to put an end to that situation. Such measures may consist, forexample, in injunctions, sanctions against directors and managers, or thesuspension of the exercise of the voting rights attaching to the sharesheld by the shareholders or members in question.
Similar measures shall apply to natural or legal persons failing to
comply with the obligation to provide prior information, as laid down inparagraph 1. If a holding is acquired despite the opposition of thecompetent authorities, the Member States shall, regardless of any other
sanctions to be adopted, provide either for exercise of the corresponding
voting rights to be suspended, or for the nullity of votes cast or for thepossibility of their annulment.
Article 15
1. The Member States shall provide that all persons working or who
have worked for the competent authorities, as well as auditors or expertsacting on behalf of the competent authorities, shall be bound by theobligation of professional secrecy. This means that no confidentialinformation which they may receive in the course of their duties may be1992L0096 — EN — 17.11.2000 — 002.001 — 14
▼B
divulged to any person or authority whatsoever, except in summary or
aggregate form, such that individual assurance undertakings cannot beidentified, without prejudice to cases covered by criminal law.
Nevertheless, where an assurance undertaking has been declared
bankrupt or is being compulsorily wound up, confidential informationwhich does not concern third parties involved in attempts to rescue thatundertaking may be divulged in civil or commercial proceedings.
2. Paragraph 1 shall not prevent the competent authorities of the
different Member States from exchanging information in accordancewith the directives applicable toassurance undertakings. That info rma-tion shall be subject to the conditions of professional secrecy indicated
in paragraph 1.
3. Member States may conclude cooperation agreements providing
for exchange of information with the competent authorities of thirdcountries or with authorities or bodies of third countries as defined inparagraphs 5 and 5a only if the information disclosed is subject toguarantees of professional secrecy at least equivalent to those referred to
in this Article. Such exchange of information must be intended for the
performance of the supervisory task of the authorities or bodiesmentioned.
Where the information originates in another Member State, it may not be
disclosed without the express agreement of the competent authorities
which have disclosed it and, where appropriate, solely for the purposesfor which those authorities gave their agreement.
4. Competent authorities receiving confidential information under
paragraphs 1 or 2 may use it only in the course of their duties:
— to check that the conditions governing the taking-up of the business
of assurance are met and to facilitate monitoring of the conduct ofsuch business, especially with regard to the monitoring of technical
provisions, solvency margins, administrative and accounting proce-
dures and internal control mechanisms, or
— to impose sanctions, or— in administrative appeals against decisions of the competent
authority, or
— in court proceedings initiated pursuant to Article 50 or under special
provisions provided for in the directives adopted in the field ofassurance undertakings.
5. Paragraphs 1 and 4 shall not preclude the exchange of information
within a Member State, where there are two or more competent
authorities in the same Member State, or, between Member States,between competent authorities and:
— authorities responsible for the official supervision of credit
institutions and other financial organizations and the authoritiesresponsible for the supervision of financial markets,
— bodies involved in the liquidation and bankruptcy of assurance
undertakings and in other similar procedures, and
— persons responsible for carrying out statutory audits of the accounts
of assurance undertakings and other financial institutions, in thedischarge of their supervisory functions, and the disclosure, to bodieswhich administer (compulsory) winding-up proceedings or guarantee
funds, of information necessary to the performance of their duties.
The information received by these authorities, bodies and personsshall be subject to the obligation of professional secrecy laid down inparagraph 1.
in the discharge of their supervisory functions, and the disclosure, to
bodies which administer (compulsory) winding-up proceedings orguarantee funds, of information necessary to the performance of theirduties. The information received by these authorities, bodies and personsshall be subject to the obligation of professional secrecy laid down inparagraph 1.1992L0096 — EN — 17.11.2000 — 002.001 — 15
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5a. Notwithstanding paragraphs 1 to 4, Member States may authorize
exchanges of information between the competent authorities and:
— the authorities responsible for overseeing the bodies involved in the
liquidation and bankruptcy of insurance undertakings and othersimilar procedures, or
— the authorities responsible for overseeing the persons charged with
carrying out statutory audits of the accounts of insurance under-takings, credit institutions, investment firms and other financialinstitutions, or
— independent actuaries of insurance undertakings carrying out legal
supervision of those undertakings and the bodies responsible for
overseeing such actuaries.
Notwithstanding paragraphs 1 to 4, Member States may authorize
exchanges of information between the competent authorities and:
— this information shall be for the purpose of carrying out the
overseeing or legal supervision referred to in the first subparagraph,
— information received in this context will be subject to the conditions
of professional secrecy imposed in paragraph 1,
— where the information originates in another Member State, it may
not be disclosed without the express agreement of the competentauthorities which have disclosed it and, where appropriate, solely for
the purposes for which those authorities gave their agreement.
Member States shall communicate to the Commission and to the other
Member States the names of the authorities, person and bodies whichmay receive information pursuant to this paragraph.
5b. Notwithstanding paragraphs 1 to 4, Member States may, with the
aim of strengthening the stability, including integrity, of the financialsystem, authorize the exchange of information between the competent
authorities and the authorities or bodies responsible under the law for the
detection and investigation of breaches of company law.
Member States which have recourse to the option provided for in the
first subparagraph shall require at least that the following conditons aremet:
— the information shall be for the purpose of performing the task
referred toin the first subparagraph,
— information received in this context shall be subject to the conditions
of professional secrecy imposed in paragraph 1,
— where the information originates in another Member State, it may
not be disclosed without the express agreement of the competent
authorities which have disclosed it and, where appropriate, solely forthe purposes for which those authorities gave their agreement.
Where, in a Member State, the authorities or bodies referred to in the
first subparagraph perform their task of detection or investigation withthe aid, in view of their specific competence, of persons appointed for
that purpose and not employed in the public sector, the possibility of
exchanging information provided for in the first subparagraph may beextended to such persons under the conditions stipulated in the secondsubparagraph.
In order to implement the final indent of the second subparagraph, the
authorities or bodies referred to in the first subparagraph shallcommunicate to the competent authorities which have disclosed the
information, the names and precise responsibilities of the persons to
whom it is to be sent.
Member States shall communicate to the Commission and to the other
Member States the names of the authorities or bodies which may receiveinformation pursuant to this paragraph.
Before 31 December 2000, the Commission shall draw up a report on
the application of the provisions of this paragraph.1992L0096 — EN — 17.11.2000 — 002.001 — 16
▼M1
5c. Member States may authorize the competent authorities to
transmit:
— to central banks and other bodies with a similar function in their
capacity as monetary authorities,
— where appropriate, to other public authorities responsible for
overseeing payment systems,
information intended for the performance of their task and may
authorize such authorities or bodies to communicate to the competent
authorities such information as they may need for the purposes of
paragraph 4. Information received in this context shall be subject to theconditions of professonial secrecy imposed in this Article.
6. In addition, notwithstanding paragraphs 1 and 4, Member States
may, under provisions laid down by law, authorize the disclosure of
certain information to other departments of their central government
administrations responsible for legislation on the supervision of creditinstitutions, financial institutions, investment services and assuranceundertakings and to inspectors acting on behalf of those departments.
However, such disclosures may be made only where necessary for
reasons of prudential control.
However, Member States shall provide that information received under
paragraphs 2 and 5 and that obtained by means of the on-the-spotverification referred to in Article 16 of Directive 79/267/EEC may neverbe disclosed in the cases referred to in this paragraph except with theexpress consent of the competent authorities which disclosed theinformation or of the competent authorities of the Member State in
which on-the-spot verification was carried out.
Article 15a
1. Member States shall provide at least that:
(a) any person authorized within the meaning of Directive 84/253/
EEC(
1), performing in a insurance undertaking the task described in
Article 51 of Directive 78/660/EEC(2), Article 37 of Directive 83/
349/EEC or Article 31 of Directive 85/611/EEC or any other
statutory task, shall have a duty to report promptly to the competentauthorities any fact or decision concerning that undertaking of whichhe has become aware while carrying out that task which is liable to:
— constitute a material breach of the laws, regulations or
administrative provisions which lay down the conditionsgoverning authorization or which specifically govern pursuit ofthe activities of insurance undertakings, or
— affect the continuous functioning of the insurance undertaking,
or
— lead to refusal to certify the accounts or to the expression of
reservations;
(b) that person shall likewise have a duty to report any facts and
decisions of which he becomes aware in the course of carrying out atask asdescribed in (a) in an undertaking having close links resultingfrom a control relationship with the insurance undertaking withinwhich he is carrying out the abovementioned task.
2. The disclosure in good faith to the competent authorities, by
persons authorized within the meaning of Directive 84/253/EEC, of anyfact or decision referred to in paragraph 1 shall not constitute a breach ofany restriction on disclosure of information imposed by contract of byany legislative, regulatory or administrative provision and shall notinvolce such persons in liability of any kind.1992L0096 — EN — 17.11.2000 — 002.001 — 17
(1) OJ NoL 126, 12. 5. 1984, p. 20.
(2) OJ NoL 222, 14. 8. 1978, p. 11. Directive as last amended by Directive 90/
605/EEC (OJ NoL 317, 16. 11. 1990, p. 60).▼B
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Article 16
Article 13 of Directive 79/267/EEC shall be replaced by the following:
‘Article 13
1. Without prejudice to paragraphs 3 and 7, no undertaking may
be authorized both pursuant to this Directive and pursuant toDirective 73/239/EEC.
2. However, Member States may provide that:
— undertakings authorized pursuant to this Directive may also
obtain authorization, in accordance with Article 6 of Directive
73/239/EEC for the risks listed in classes 1 and 2 in the Annex to
that Directive,
— undertakings authorized pursuant to Article 6 of Directive 73/
239/EEC solely for the risks listed in classes 1 and 2 in theAnnex to that Directive may obtain authorization pursuant to this
Directive.
3. Subject toparagraph 6, undertakings referred toin paragraph 2
and those which at the time of notification of this Directive carry onsimultaneously both of the activities covered by this Directive andby Directive 73/239/EEC may continue to do so, provided that eachactivity is separately managed in accordance with Article 14.
4. Member States may provide that the undertakings referred to in
paragraph 2 shall comply with the accounting rules governing
undertakings authorized pursuant to this Directive for all of their
activities. Pending coordination in this respect, Member States mayalso provide that, with regard to rules on winding-up, activitiesrelating tothe risks listed in classes 1 and 2 in the Annex toDirective 73/239/EEC carried on by the undertakings referred to inparagraph 2 shall be governed by the rules applicable to life
assurance activities.
5. Where an undertaking carrying on the activities referred to in
the Annex to Directive 73/239/EEC has financial, commercial oradministrative links with an undertaking carrying on the activitiescovered by this Directive, the supervisory authorities of the MemberStates within whose territories the head offices of those undertakingsare situated shall ensure that the accounts of the undertakings in
question are not distorted by agreements between these undertakings
or by any arrangement which could affect the apportionment ofexpenses and income.
6. Any Member State may require undertakings whose head
offices are situated in its territory to cease, within a period to bedetermined by the Member State concerned, the simultaneouspursuit of activities in which they were engaged at the time of
notification of this Directive.
7. The provisions of this Article shall be reviewed on the basis of
a report from the Commission to the Council in the light of futureharmonization of the rules on winding-up, and in any case before 31December 1999.’
Article 17
Article 35 of Directive 79/267/EEC and Article 18 of Directive 90/619/
EEC shall be deleted.
Chapter 2
Article 18
Article 17 of Directive 79/267/EEC shall be replaced by the following:
‘Article 17
1. The home Member State shall require every assurance
undertaking to establish sufficient technical provisions, includingmathematical provisions, in respect of its entire business.1992L0096 — EN — 17.11.2000 — 002.001 — 18
▼B
The amount of such technical provisions shall be determined
according to the following principles:
A. (i) The amount of the technical life-assurance provisions shall
be calculated by a sufficiently prudent prospective actuarial
valuation, taking account of all future liabilities as
determined by the policy conditions for each existingcontract, including:
— all guaranteed benefits, including guaranteed surrender
values,
— bonuses to which policy-holders are already either
collectively or individually entitled, however those
bonuses are described — vested, declared or allotted,
— all options available to the policy-holder under the terms
of the contract,
— expenses, including commissions;
taking credit for future premiums due;
(ii) the use of a retrospective method is allowed, if it can be
shown that the resulting technical provisions are not lowerthan would be required under a sufficiently prudentprospective calculation or if a prospective method cannot
be used for the type of contract involved;
(iii) a prudent valuation is not a “best estimate” valuation, but
shall include an appropriate margin for adverse deviation of
the relevant factors;
(iv) the method of valuation for the technical provisions must
not only be prudent in itself, but must also be so having
regard to the method of valuation for the assets covering
those provisions;
(v) technical provisions shall be calculated separately for each
contract. The use of appropriate approximations or general-izations is allowed, however, where they are likely to giveapproximately the same result as individual calculations.The principle of separate calculation shall in no way preventthe establishment of additional provisions for general risks
which are not individualized;
vi) where the surrender value of a contract is guaranteed, the
amount of the mathematical provisions for the contract at
any time shall be at least as great as the value guaranteed atthat time.
B. The rate of interest used shall be chosen prudently. It shall be
determined in accordance with the rules of the competent
authority in the home Member State, applying the following
principles:
(a) for all contracts, the competent authority of the undertaking's
home Member State shall fix one or more maximum rates ofinterest, in particular in accordance with the following rules:
(i) when contracts contain an interest rate guarantee, the
competent authority in the home Member State shall set
a single maximum rate of interest. It may differaccording to the currency in which the contract isdenominated, provided that it is not more than 60 % ofthe rate on bond issues by the State in whose currencythe contract is denominated. In the case of a contract
denominated in ecus, this limit shall be set by reference
to ecu-denominated issues by the Community institu-tions.
If a Member State decides, pursuant tothe seco nd
sentence of the preceding paragraph, to set a maximumrate of interest for contracts denominated in anotherMember State's currency, it shall first consult thecompetent authority of the Member State in whose
currency the contract is denominated;
(ii) however, when the assets of the undertaking are not
valued at their purchase price, a Member State may1992L0096 — EN — 17.11.2000 — 002.001 — 19
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stipulate that one or more maximum rates may be
calculated taking into account the yield on the corre-sponding assets currently held, minus a prudential
margin and, in particular for contracts with periodic
premiums, furthermore taking into account the antici-pated yield on future assets. The prudential margin andthe maximum rate or rates of interest applied to theanticipated yield on future assets shall be fixed by the
competent authority of the home Member State;
(b) the establishment of a maximum rate of interest shall not
imply that the undertaking is bound to use a rate as high asthat;
(c) the home Member State may decide not to apply (a) to the
following categories of contracts:
— unit-linked contracts,
— single-premium contracts for a period of up to eight
years, — without-profits contracts, and annuity contractswith nosurrender value.
— without-profits contracts, and annuity contracts with no
surrender value.
In the cases referred toin the last twoindents o f the first
subparagraph, in choosing a prudent rate of interest, accountmay be taken of the currency in which the contract isdenominated and corresponding assets currently held andwhere the undertaking's assets are valued at their current
value, the anticipated yield on future assets.
Under nocircumstances may the rate o f interest used be
higher than the yield on assets as calculated in accordancewith the accounting rules in the home Member State, less an
appropriate deduction;
(d) the Member State shall require an undertaking toset aside in
its accounts a provision to meet interest-rate commitments
vis-à-vispolicy-holders if the present or foreseeable yield on
the undertaking's assets is insufficient to cover thosecommitments;
(e) the Commission and the competent authorities of the
Member States which so request shall be notified of the
maximum rates of interest set under (a).
C. The statistical elements of the valuation and the allowance for
expenses used shall be chosen prudently, having regard to the
State of the commitment, the type of policy and the adminis-trative costs and commissions expected to be incurred.
D. In the case of participating contracts, the method of calculation
for technical provisions may take into account, either implicitly
or explicitly, future bonuses of all kinds, in a manner consistentwith the other assumptions on future experience and with thecurrent method of distribution of bonuses.
E. Allowance for future expenses may be made implicitly, for
instance by the use of future premiums net of managementcharges. However, the overall allowance, implicit or explicit,shall be not less than a prudent estimate of the relevant futureexpenses.
F. The method of calculation of technical provisions shall not be
subject to discontinuities from year to year arising from arbitrarychanges to the method or the bases of calculation and shall besuch as to recognize the distribution of profits in an appropriate
way over the duration of each policy.
2. Assurance undertakings shall make available tothe public the
bases and methods used in the calculation of the technical
provisions, including provisions for bonuses.
3. The home Member State shall require every assurance
undertaking to cover the technical provisions in respect of its entirebusiness by matching assets, in accordance with Article 24 of1992L0096 — EN — 17.11.2000 — 002.001 — 20
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Directive 92/96/EEC. In respect of business written in the
Community, these assets must be localized within the Community.Member States shall not require assurance undertakings to localize
their assets in a particular Member State. The home Member State
may, however, permit relaxations in the rules on the localization ofassets.
4. If the home Member State allows any technical provisions to
be covered by claims against reassurers, it shall fix the percentage so
allowed. In such case, it may not require the localization of the
assets representing such claims.’
Article 19
Premiums for new business shall be sufficient, on reasonable actuarial
assumptio ns, toenable assurance undertakings tomeet all theircommitments and, in particular, to establish adequate technical
provisions.
For this purpose, all aspects of the financial situation of an assurance
undertaking may be taken into account, without the input from resources
other than premiums and income earned thereon being systematic andpermanent in such a way that it may jeopardize the undertaking'ssolvency in the long term.
Article 20
The assets covering the technical provisions shall take account of the
type of business carried on by an undertaking in such a way as to secure
the safety, yield and marketability of its investments, which theundertaking shall ensure are diversified and adequately spread.
Article 21
1. The home Member State may not authorize assurance undertakings
to cover their technical provisions with any but the following categories
of assets:
A. Investments
(a) debt securities, bonds and other money- and capital-market
instruments;
(b) loans;
(c) shares and other variable-yield participations;
(d) units in undertakings for collective investment in transferable
securities and other investment funds;
(e) land, buildings and immovable property rights;
B. Debts and claims
(f) debts owed by reassurers, including reassurers' shares of
technical provisions;
(g) deposits with and debts owed by ceding undertakings;(h) debts owed by policy-holders and intermediaries arising out of
direct and reassurance operations;
(i) advances against policies;
(j) tax recoveries;
(k) claims against guarantee funds;
C. Others
(l) tangible fixed assets, other than land and buildings, valued on
the basis of prudent amortization;
(m) cash at bank and in hand, deposits with credit institutions and
any other body authorized to receive deposits;
(n) deferred acquisition costs;(o) accrued interest and rent, other accrued income and prepay-
ments;1992L0096 — EN — 17.11.2000 — 002.001 — 21
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(p) reversionary interests.
In the case of the association of underwriters known as Lloyd's, asset
categories shall also include guarantees and letters of credit issued bycredit institutions within the meaning of Directive 77/780/EEC(
1)orb y
assurance undertakings, together with verifiable sums arising out of life
assurance policies, to the extent that they represent funds belonging to
members.
The inclusion of any asset or category of assets listed in the first
subparagraph shall not mean that all these assets should automatically be
accepted as cover for technical provisions. The home Member Stateshall lay down more detailed rules fixing the conditions for the use ofacceptable assets; in this connection, it may require valuable security orguarantees, particularly in the case of debts owed by reassurers.
In determining and applying the rules which it lays down, the home
Member State shall, in particular, ensure that the following principlesare complied with:
(i) assets covering technical provisions shall be valued net of any
debts arising out of their acquisition;
(ii) all assets must be valued on a prudent basis, allowing for the risk
of any amounts not being realizable. In particular, tangible fixedassets other than land and buildings may be accepted as cover fortechnical provisions only if they are valued on the basis of prudent
amortization;
(iii) loans, whether to undertakings, to a State or international
organization, to local or regional authorities or to natural persons,may be accepted as cover for technical provisions only if there are
sufficient guarantees as totheir security, whether these are based
on the status of the borrower, mortgages, bank guarantees orguarantees granted by assurance undertakings or other forms ofsecurity;
(iv) derivative instruments such as options, futures and swaps in
connection with assets covering technical provisions may be usedin so far as they contribute to a reduction of investment risks orfacilitate efficient portfolio management. They must be valued ona prudent basis and may be taken into account in the valuation ofthe underlying assets;
(v) transferrable securities which are not dealt in on a regulated
market may be accepted as cover for technical provisions only ifthey can be realized in the short term or if they are holdings incredits institutions, in assurance undertakings, within the limits
permitted by Article 8 of Directive 79/267/EEC, or in investment
undertakings established in a Member State;
(vi) Forderungen an einen Dritten können zur Bedeckung der
versicherungstechnischen Rückstellungen nur nach Abzug aller
aufrechenbaren Gegenforderungen an diesen Dritten zugelassen
werden.
(vii) the value of any debts and claims accepted as cover for technical
provisions must be calculated on a prudent basis, with due
allowance for the risk of any amounts not being realizable. In
particular, debts owed by policy-holders and intermediaries arisingout of assurance and reassurance operations may be accepted onlyin so far as they have been outstanding for not more than threemonths;
(viii) where the assets held include an investment in a subsidiary
undertaking which manages all or part of the assurance under-taking's investments on its behalf, the home Member State must,when applying the rules and principles laid down in this Article,take intoacco unt the underlying assets held by the subsidiary1992L0096 — EN — 17.11.2000 — 002.001 — 22
(1) First Council Directive 77/780/EEC of 12 December 1977 on the
coordination of the laws, regulations and administrative provisions relating
to the taking up and pursuit of the business of credit institutions (OJ No L
322, 17. 12. 1977, p. 30). Directive as last amended by Directive 89/646/EEC
(OJ NoL 386, 30. 12. 1989, p. 1).
▼B
undertaking; the home Member State may treat the assets of other
subsidiaries in the same way;
(ix) deferred acquisition costs may be accepted as cover for technical
provisions only to the extent that this is consistent with thecalculation of the mathematical provisions.
2. Notwithstanding paragraph 1, in exceptional circumstances and at
an assurance undertaking's request, the home Member State may,
temporarily and under a properly reasoned decision, accept other
categories of assets as cover for technical provisions, subject to Article20.
Article 22
1. As regards the assets covering technical provisions, the home
Member State shall require every assurance undertaking toinvest nomore than:
(a) 10 % of its total gross technical provisions in any one piece of land
or building, or a number of pieces of land or buildings close enough
to each other to be considered effectively as one investment;
(b) 5 % of its total gross technical provisions in shares and other
negotiable securities treated as shares, bonds, debt securities andother money- and capital-market instruments from the sameundertaking, or in loans granted to the same borrower, takentogether, the loans being loans other than those granted to a State,
regional or local authority or to an international organization of
which one or more Member States are members. This limit may beraised to 10 % if an undertaking invests not more than 40 % of itsgross technical provisions in the loans or securities of issuing bodiesand borrowers in each of which it invests more than 5 % of itsassets;
(c) 5 % of its total gross technical provisions in unsecured loans,
including 1 % for any single unsecured loan, other than loans
granted tocredit institutio ns, assurance undertakings — in sofar as
Article 8 of Directive 79/267/EEC allows it — and investmentundertakings established in a Member State. The limits may beraised to 8 and 2 % respectively by a decision taken on a case-by-case basis by the competent authority of the home Member State;
(d) 3 % of its total gross technical provisions in the form of cash in
hand;
(e) 10 % of its total gross technical provisions in shares, other securities
treated as shares and debt securities which are not dealt in on a
regulated market.
2. The absence of a limit in paragraph 1 on investment in any
particular category does not imply that assets in that category should beaccepted as cover for technical provisions without limit. The homeMember State shall lay down more detailed rules fixing the conditions
for the use of acceptable assets. In particular it shall ensure, in the
determination and the application of those rules, that the followingprinciples are complied with:
(i) assets covering technical provisions must be diversified and spread
in such a way as toensure that there is noexcessive reliance o n anyparticular category of asset, investment market or investment;
(ii) investment in particular types of asset which show high levels of
risk, whether because of the nature of the asset or the quality of the
issuer, must be restricted toprudent levels;
(iii) limitations on particular categories of asset must take account of the
treatment of reassurance in the calculation of technical provisions;
(iv) where the assets held include an investment in a subsidiary
undertaking which manages all or part of the assurance under-
taking's investments on its behalf, the home Member State must,when applying the rules and principles laid down in this Article,take intoacco unt the underlying assets held by the subsidiaryundertaking; the home Member State may treat the assets of othersubsidiaries in the same way;1992L0096 — EN — 17.11.2000 — 002.001 — 23
▼B
(v) the percentage of assets covering technical provisions which are the
subject of non-liquid investments must be kept to a prudent level;
(vi) where the assets held include loans to or debt securities issued by
certain credit institutions, the home Member State may, whenapplying the rules and principles contained in this Article, take intoaccount the underlying assets held by such credit institutions. Thistreatment may be applied only where the credit institution has its
head office in a Member State, is entirely owned by that Member
State and/or that State's local authorities and its business, accordingto its memorandum and articles of association, consists ofextending, through its intermediaries, loans to, or guaranteed by,States or local authorities or of loans to bodies closely linked to theState or to local authorities.
3. In the context of the detailed rules laying down the conditions for
the use of acceptable assets, the Member State shall give more limitativetreatment to:
— any loan unaccompanied by a bank guarantee, a guarantee issued by
an assurance undertaking, a mortgage or any other form of security,
as compared with loans accompanied by such collateral,
— UCITS not coordinated within the meaning of Directive 85/611/
EEC(
1) and other investment funds, as compared with UCITS
coordinated within the meaning of that Directive,
— securities which are not dealt in on a regulated market, as compared
with those which are,
— bonds, debt securities and other money- and capital-market
instruments not issued by States, local or regional authorities or
undertakings belonging to Zone A as defined in Directive 89/647/
EEC(2), or the issuers of which are international organizations not
numbering at least one Community Member State among theirmembers, as compared with the same financial instruments issued bysuch bodies.
4. Member States may raise the limit laid down in paragraph 1 (b) to
40 % in the case of certain debt securities when these are issued by acredit institution which has its head office in a Member State and issubject by law to special official supervision designed to protect the
holders of those debt securities. In particular, sums deriving from the
issue of such debt securities must be invested in accordance with the lawin assets which, during the whole period of validity of the debtsecurities, are capable of covering claims attaching to debt securities andwhich, in the event of failure of the issuer, would be used on a priority
basis for the reimbursement of the principal and payment of the accrued
interest.
5. Member States shall not require assurance undertakings to invest
in particular categories of assets.
6. Notwithstanding paragraph 1, in exceptional circumstances and at
the assurance undertaking's request, the home Member State may,temporarily and under a properly reasoned decision, allow exceptions to
the rules laid do wn in paragraph 1 (a) to(e), subject toArticle 20.
Article 23
1. Where the benefits provided by a contract are directly linked to the
value of units in an UCITS or to the value of assets contained in aninternal fund held by the insurance undertaking, usually divided intounits, the technical provisions in respect of those benefits must berepresented as closely as possible by those units or, in the case whereunits are not established, by those assets.1992L0096 — EN — 17.11.2000 — 002.001 — 24
(1) Council Directive 85/611/EEC of 20 December 1985 on the coordination of
laws, regulations and administrative provisions relating to undertakings forcollective investment in transferable securities (UCITS) (OJ No L 375, 31.
12. 1985, p. 3). Directive as amended by Directive 88/220/EEC (OJ NoL
100, 19. 4. 1988, p. 31).
(
2) Council Directive 89/647/EEC of 18 December 1989 on a solvency ratio for
credit institutions (OJ No L 386, 30. 12. 1989, p. 14).
▼B
2. Where the benefits provided by a contract are directly linked to a
share index or some other reference value other than those referred to inparagraph 1, the technical provisions in respect of those benefits must be
represented as closely as possible either by the units deemed to represent
the reference value or, in the case where units are not established, byassets of appropriate security and marketability which correspond asclosely as possible with those on which the particular reference value isbased.
3. Articles 20 and 22 shall no t apply toassets held tomatch liabilities
which are directly linked tothe benefits referred toin paragraphs 1 and2. References to the technical provisions in Article 22 shall be to thetechnical provisions excluding those in respect of such liabilities.
4. Where the benefits referred toin paragraph 1 and 2 include a
guarantee of investment performance or some other guaranteed benefit,the corresponding additional technical provisions shall be subject toArticles 20, 21 and 22.
Article 24
1. For the purposes of Articles 17 (3) and 28 of Directive 79/267/
EEC, Member States shall comply with Annex I to this Directive asregards the matching rules.
2. This Article shall not apply to the commitments referred to in
Article 23 of this Directive.
Article 25
Article 18, second subparagraph, point 1 of Directive 79/267/EEC shall
be replaced by the following:
‘1. the assets of the undertaking free of any foreseeable liabilities,
less any intangible items. In particular the following shall beincluded:
— the paid-up share capital or, in the case of a mutual assurance
undertaking, the effective initial fund plus any members'accounts which meet all the following criteria:
(a) the memorandum and articles of association must
stipulate that payments may be made from these accountsto members only in so far as this does not cause thesolvency margin to fall below the required level, or, afterthe dissolution of the undertaking, if all the undertaking's
other debts have been settled;
(b) the memorandum and articles of association must
stipulate, with respect to any such payments for reasons
other than the individual termination of membership, thatthe competent authorities must be notified at least onemonth in advance and can prohibit the payment withinthat period;
(c) the relevant provisions of the memorandum and articles
of association may be amended only after the competentauthorities have declared that they have no objection to
the amendment, without prejudice to the criteria stated in
(a) and (b),
— one half of the unpaid share capital or initial fund, once the
paid-up part amounts to 25 % of that share capital or fund,
— reserves (statutory reserves and free reserves) not corre-
sponding to underwriting liabilities,
— any profits brought forward,— cumulative preferential share capital and subordinated loan
capital may be included but, if so, only up to 50 % of themargin, no more than 25 % of which shall consist ofsubordinated loans with a fixed maturity, or fixed-term1992L0096 — EN — 17.11.2000 — 002.001 — 25
▼B
cumulative preferential share capital, if the following
minimum criteria are met:
(a) in the event of the bankruptcy or liquidation of the
assurance undertaking, binding agreements must existunder which the subordinated loan capital or preferentialshare capital ranks after the claims of all other creditors
and is not to be repaid until all other debts outstanding at
the time have been settled.
Subordinated loan capital must also fulfil the following
conditions:
(b) only fully paid-up funds may be taken into account;
(c) for loans with a fixed maturity, the original maturity must
be at least five years. No later than one year before therepayment date the assurance undertaking must submit tothe competent authorities for their approval a plan
showing how the solvency margin will be kept at or
brought to the required level at maturity, unless theextent to which the loan may rank as a component of thesolvency margin is gradually reduced during at least thelast five years before the repayment date. The competentauthorities may authorize the early repayment of such
loans provided application is made by the issuing
assurance undertaking and its solvency margin will notfall below the required level;
(d) loans the maturity of which is not fixed must be
repayable only subject to five years' notice unless theloans are no longer considered as a component of the
solvency margin or unless the prior consent of the
competent authorities is specifically required for earlyrepayment. In the latter event the assurance undertakingmust notify the competent authorities at least six monthsbefore the date of the proposed repayment, specifying theactual and required solvency margin both before and
after that repayment. The competent authorities shall
authorize repayment only if the assurance undertaking'ssolvency margin will not fall below the required level;(e) the loan agreement must not include any clauseproviding that in specified circumstances, other than thewinding-up of the assurance undertaking, the debt will
become repayable before the agreed repayment dates;
(e) the loan agreement must not include any clause providing
that in specified circumstances, other than the winding-up of the assurance undertaking, the debt will becomerepayable before the agreed repayment dates;
(f) the loan agreement may be amended only after the
competent authorities have declared that they have noobjection to the amendment,
— securities with nospecified maturity date and o ther
instruments that fulfil the following conditions, includingcumulative preferential shares other than those mentioned inthe preceding indent, up to 50 % of the margin for the total of
such securities and the subordinated loan capital referred to
in the preceding indent:
(a) they may not be repaid on the initiative of the bearer or
without the prior consent of the competent authority;
(b) the contract of issue must enable the assurance under-
taking to defer the payment of interest on the loan;
(c) the lender's claims on the assurance undertaking must
rank entirely after those of all non-subordinated cred-itors;
(d) the documents governing the issue of the securities must
provide for the loss-absorption capacity of the debt andunpaid interest, while enabling the assurance undertakingtoco ntinue its business;1992L0096 — EN — 17.11.2000 — 002.001 — 26
▼B
(e) only fully paid-up amounts may be taken into account.’
Article 26
No more than three years after the date of application of this Directive,
the Commission shall submit a report to the Insurance Committee on the
need for further harmonization of the solvency margin.
Article 27
Article 21 of Directive 79/267/EEC shall be replaced by the following:
‘Article 21
1. Member States shall not prescribe any rules as to the choice of
the assets that need not be used as cover for the technical provisionsreferred toin Article 17.
2. Subject toArticle 17 (3), Article 24 (1), (2), (3) and (5) and the
second subparagraph of Article 26 (1), Member States shall notrestrain the free disposal of those assets, whether movable orimmovable, that form part of the assets of authorized assuranceundertakings.
3. Paragraphs 1 and 2 shall not preclude any measures which
Member States, while safeguarding the interests of the lives assured,are entitled to take as owners or members of or partners in theundertakings in question.’
Chapter 3
Article 28
The Member State of the commitment shall not prevent a policy-holder
from concluding a contract with an assurance undertaking authorizedunder the conditions of Article 6 of Directive 79/267/EEC, as long asthat does not conflict with legal provisions protecting the general good
in the Member State of the commitment.
Article 29
Member States shall not adopt provisions requiring the prior approval or
systematic notification of general and special policy conditions, scales ofpremiums, technical bases used in particular for calculating scales ofpremiums and technical provisions or forms and other printeddocuments which an assurance undertaking intends to use in its dealings
with policy-holders.
Notwithstanding the first subparagraph, for the sole purpose of verifying
compliance with national provisions concerning actuarial principles, theMember State of origin may require systematic communication of thetechnical Bases used in particular for calculating scales of premiums and
technical provisions, without that requirement constituting a prior
condition for an undertaking to carry on its business.
Not later than five years after the date of application of this Directive,
the Commission shall submit a report to the Council on theimplementation of those provisions.
Article 30
1. In the first subparagraph of Article 15 (1) of Directive 90/619/EEC
the words ‘in one of the cases referred to in Title III’' shall be deleted.
2. Article 15 (2) of Directive 90/619/EEC shall be replaced by the
following:
‘2. The Member States need not apply paragraph 1 to contracts of
six months' duration or less, nor where, because of the status of thepolicy-holder or the circumstances in which the contract isconcluded, the policy-holder does not need this special protection.Member States shall specify in their rules where paragraph 1 is notapplied.’1992L0096 — EN — 17.11.2000 — 002.001 — 27
▼B
Article 31
1. Before the assurance contract is concluded, at least the information
listed in point A of Annex II shall be communicated to the policy-
holder.
2. The policy-holder shall be kept informed throughout the term of
the contract of any change concerning the information listed in point Bof Annex II.
3. The Member State of the commitment may require assurance
undertakings to furnish information in addition to that listed in Annex IIonly if it is necessary for a proper understanding by the policy-holder ofthe essential elements of the commitment.
4. The detailed rules for implementing this Article and Annex II shall
be laid down by the Member State of the commitment.
TITLE IV
PROVISIONS RELATING TO RIGHT OF ESTABLISHMENT AND
FREEDOM TO PROVIDE SERVICES
Article 32
Article 10 of Directive 79/267/EEC shall be replaced by the following:
‘Article 10
1. An assurance undertaking that proposes to establish a branch
within the territory of another Member State shall notify thecompetent authorities of its home Member State.
2. The Member States shall require every assurance undertaking
that proposes to establish a branch within the territory of another
Member State to provide the following information when effectingthe notification provided for in paragraph 1:
(a) the Member State within the territory of which it proposes to
establish a branch;
(b) a scheme of operations setting out inter alia the types of
business envisaged and the structural organization of the branch;
(c) the address in the Member State of the branch from which
documents may be obtained and to which they may be delivered,it being understood that that address shall be the one to which all
communications to the authorized agent are sent;
(d) the name of the branch's authorized agent, who must possess
sufficient powers to bind the undertaking in relation to thirdparties and to represent it in relations with the authorities and
courts of the Member State of the branch. With regard to
Lloyd's, in the event of any litigation in the Member State of thebranch arising out of underwritten commitments, the assuredpersons must not be treated less favourably than if the litigationhad been brought against businesses of a conventional type. Theauthorized agent must, therefore, possess sufficient powers for
proceedings to be taken against him and must in that capacity be
able to bind the Lloyd's underwriters concerned.
3. Unless the competent authorities of the home Member State
have reason to doubt the adequacy of the administrative structure or
the financial situation of the assurance undertaking or the good
repute and professional qualification or experience of the directorsor managers or the authorized agent, taking into account the businessplanned, they shall within three months of receiving all theinformation referred to in paragraph 2 communicate that informationto the competent authorities of the Member State of the branch and
shall inform the undertaking concerned accordingly.
The competent authorities of the home Member State shall also
attest that the assurance undertaking has the minimum solvencymargin calculated in accordance with Articles 19 and 20.1992L0096 — EN — 17.11.2000 — 002.001 — 28
▼B
Where the competent authorities of the home Member State refuse to
communicate the information referred to in paragraph 2 to thecompetent authorities of the Member State of the branch they shall
give the reasons for their refusal to the undertaking concerned within
three months of receiving all the information in question. Thatrefusal o r failure toact shall be subject toa right toapply tothecourts in the home Member State.
4. Before the branch of an assurance undertaking starts business,
the competent authorities of the Member State of the branch shall,
within two months of receiving the information referred to in
paragraph 3, inform the competent authority of the home MemberState, if appropriate, of the conditions under which, in the interest ofthe general good, that business must be carried on in the MemberState of the branch.
5. On receiving a communication from the competent authorities
of the Member State of the branch or, if no communication is
received from them, on expiry of the period provided for in
paragraph 4, the branch may be established and start business.
6. In the event of a change in any of the particulars commu-
nicated under paragraph 2 (b), (c) or (d), an assurance undertakingshall give written notice of the change to the competent authoritiesof the home Member State and of the Member State of the branch atleast one month before making the change so that the competent
authorities of the home Member State and the competent authorities
of the Member State of the branch may fulfil their respective rolesunder paragraphs 3 and 4.’
Article 33
Article 11 of Directive 79/267/EEC shall be deleted.
Article 34
Article 11 of Directive 90/619/EEC shall be replaced by the following:
‘Article 11
Anyundertaking that intends to carry on business for the first time in
one or more Member States under the freedom to provide services
shall first inform the competent authorities of the home Member
State, indicating the nature of the commitments it proposesto cover.’
Article 35
Article 14 of Directive 90/619/EEC shall be replaced by the following:
‘Article 14
1. Within one month of the notification provided for in Article
11, the competent authorities of the home Member State shallcommunicate to the Member State or Member States within the
territory of which the undertaking intends to carry on business by
way of the freedom to provide services:
(a) a certificate attesting that the undertaking has the minimum
solvency margin calculated in accordance with Articles 19 and
20 of Directive 79/267/EEC;
(b) the classes which the undertaking has been authorized to offer;
(c) the nature of the commitments which the undertaking proposes
to cover in the Member State of the provision of services.
At the same time, they shall inform the undertaking concerned
accordingly.
2. Where the competent authorities of the home Member State do
not communicate the information referred to in paragraph 1 withinthe period laid down, they shall give the reasons for their refusal tothe undertaking within that same period. The refusal shall be subjecttoa right toapply tothe co urts in the ho me Member State.1992L0096 — EN — 17.11.2000 — 002.001 — 29
▼B
3. The undertaking may start business on the certified date on
which it is informed of the communication provided for in the firstsubparagraph of paragraph 1.’
Article 36
Article 17 of Directive 90/619/EEC shall be replaced by the following:
‘Article 17
Any change which an undertaking intends tomake tothe
information referred to in Article 11 shall be subject to theprocedure provided for in Articles 11 and 14.’
Article 37
Articles 10, 12, 13, 16, 22 and 24 of Directive 90/619/EEC shall be
deleted.
Article 38
The competent authorities of the Member State of the branch or the
Member State of the provision of services may require that theinformation which they are authorized under this Directive to request
with regard to the business of assurance undertakings operating in the
territory of that State shall be supplied to them in the official language orlanguages of that State.
Article 39
1. Article 19 of Directive 90/619/EEC shall be deleted.
2. The Member State of the branch or of provision of services shall
not lay down provisions requiring the prior approval or systematicnotification of general and special policy conditions, scales of
premiums, technical bases used in particular for calculating scales of
premiums and technical provisions, forms and other printed documentswhich an undertaking intends to use in its dealings with policy-holders.For the purpose of verifying compliance with national provisionsconcerning assurance contracts, it may require an undertaking thatproposes to carry on assurance business within its territory, under the
right of establishment or the freedom to provide services, to effect only
non-systematic notification of those policy conditions and other printeddocuments without that requirement constituting a prior condition for anundertaking tocarry o n its business.
Article 40
1. Article 20 of Directive 90/619/EEC shall be deleted.
2. Any undertaking carrying on business under the right of
establishment or the freedom to provide services shall submit to the
competent authorities of the Member State of the branch and/or of the
Member State of the provision of services all documents requested of itfor the purposes of this Article in so far as undertakings the head officeof which is in those Member States are also obliged to do so.
3. If the competent authorities of a Member State establish that an
undertaking with a branch or carrying on business under the freedom toprovide services in its territory is not complying with the legal
provisions applicable to it in that State, they shall require the
undertaking concerned to remedy that irregular situation.
4. If the undertaking in question fails to take the necessary action, the
competent authorities of the Member State concerned shall inform the
competent authorities of the home Member State accordingly. The latterauthorities shall, at the earliest opportunity, take all appropriatemeasures toensure that the undertaking co ncerned remedies thatirregular situation. The nature of those measures shall be communicated
to the competent authorities of the Member State concerned.
5. If, despite the measures taken by the home Member State or
because those measures prove inadequate or are lacking in that State, the1992L0096 — EN — 17.11.2000 — 002.001 — 30
▼B
undertaking persists in violating the legal provisions in force in the
Member State concerned, the latter may, after informing the competentauthorities of the home Member State, take appropriate measures to
prevent or penalize further irregularities, including, in so far as is strictly
necessary, preventing that undertaking from continuing to conclude newassurance contracts within its territory. Member States shall ensure thatin their territories it is possible to serve the legal documents necessaryfor such measures on assurance undertakings.
6. Paragraphs 3, 4 and 5 shall not affect the emergency power of the
Member States concerned to take appropriate measures to prevent or
penalize irregularities committed within their territories. This shall
include the possibility of preventing assurance undertakings fromcontinuing to conclude new assurance contracts within their territories.
7. Paragraph 3, 4 and 5 shall not affect the power of the Member
States topenalize infringements within their territo ries.
8. If an undertaking which has committed an infringement has an
establishment or possesses property in the Member State concerned, thecompetent authorities of the latter may, in accordance with national law,apply the administrative penalties prescribed for that infringement by
way of enforcement against that establishment or property.
9. Any measure adopted under paragraphs 4 to 8 involving penalties
or restrictions on the conduct of assurance business must be properlyreasoned and communicated to the undertaking concerned.
10. Every two years, the Commission shall submit to the Insurance
Committee a report summarizing the number and type of cases in which,in each Member State, authorization has been refused pursuant to Article10 of Directive 79/267/EEC or Article 14 of Directive 90/619/EEC asamended by this Directive or measures have been taken under paragraph
5. Member States shall cooperate with the Commission by providing it
with the information required for that report.
Article 41
Nothing in this Directive shall prevent assurance undertakings with head
offices in other Member States from advertising their services through
all available means of communication in the Member State of the branchor Member State of the provision of services, subject to any rulesgoverning the form and content of such advertising adopted in theinterest of the general good.
Article 42
1. Article 21 of Directive 90/619/EEC shall be deleted.2. Should an assurance undertaking be wound up, commitments
arising out of contracts underwritten through a branch or under thefreedom to provide services shall be met in the same way as thosearising out of that undertaking's other assurance contracts, withoutdistinction as to nationality as far as the lives assured and the
beneficiaries are concerned.
Article 43
1. Article 23 of Directive 90/619/EEC shall be deleted.2. Every assurance undertaking shall inform the competent authority
of its home Member State, separately in respect of transactions carriedout under the right of establishment and those carried out under the
freedom to provide services, of the amount of the premiums, without
deduction of reassurance, by Member State and by each of classes I toIX, as defined in the Annex toDirective 79/267/EEC.
The competent authority of the home Member State shall, within a
reasonable time and on an aggregate basis forward this information tothe competent authorities of each of the Member States concerned whichsorequest.1992L0096 — EN — 17.11.2000 — 002.001 — 31
▼B
Article 44
1. Article 25 of Directive 90/619/EEC shall be deleted.2. Without prejudice to any subsequent harmonization, every
assurance contract shall be subject exclusively to the indirect taxesand parafiscal charges on assurance premiums in the Member State ofthe commitment within the meaning of Article 2 (e) of Directive 90/619/EEC and also , with regard toSpain, tothe surcharges legally established
in favour of the Spanish ‘Consorcio de compensación de seguros’ for the
performance of its functions relating to the compensation of lossesarising from extraordinary events occurring in that Member State.
The law applicable to the contract pursuant to Article 4 of Directive 90/
619/EEC shall not affect the fiscal arrangements applicable.
Pending future harmonization, each Member State shall apply to those
undertakings which cover commitments situated within its territory itsown national provisions for measures to ensure the collection of indirecttaxes and parafiscal charges due under the first subparagraph.
TITLE V
TRANSITIONAL PROVISIONS
Article 45
Member States may allow assurance undertakings with head offices in
their territories, and whose buildings and land covering their technicalprovisions exceed, at the time of the notification of this Directive, thepercentage laid down in Article 22 (1) (a) a period expiring no later than31 December 1998 within which to comply with that provision.
Article 46
1. Article 26 of Directive 90/619/EEC shall be deleted.2. Spain and Portugal, until 31 December 1995, and Greece, until 31
December 1998, may operate the following transitional arrangements forcontracts in respect of which one of those Member States is the MemberState of the commitment:
(a) by way of derogation from Article 8 (3) of Directive 79/267/EEC
and from Articles 29 and 39 of this Directive, the competentauthorities of the Member States in question may require the
communication, before use, of general and special insurance policy
conditions;
(b) the amount of the technical provisions relating to such contracts
shall be determined under the supervision of the Member Stateconcerned in accordance with its own rules or, failing that, inaccordance with the procedures established in that State in
accordance with this Directive. Cover of those technical provisions
by equivalent and matching assets and the localization of thoseassets shall be effected under the supervision of that Member Statein accordance with its rules and practices adopted in accordancewith this Directive.
TITLE VI
FINAL PROVISIONS
Article 47
The following technical adjustments to be made to Directives 79/267/
EEC and 90/619/EEC and tothis Directive shall be ado pted inaccordance with the procedure laid down in Directive 91/675/EEC:
— extension of the legal forms provided for in Article 8 (1) (a) of
Directive 79/267/EEC,1992L0096 — EN — 17.11.2000 — 002.001 — 32
▼B
— amendments tothe list set o ut in the Annex toDirective 79/267/EEC,
or adaptation of the terminology used in that list to take account ofthe development of assurance markets,
— clarification of the items constituting the solvency margin listed in
Article 18 of Directive 79/267/EEC to take account of the creation ofnew financial instruments,
— alteration of the minimum guarantee fund provided for in Article 20
(2) of Directive 79/267/EEC to take account of economic and
financial developments,
— amendments, to take account of the creation of new financial
instruments, to the list of assets acceptable as cover for technicalprovisions set out in Article 21 of this Directive and to the rules on
the spreading of investments laid down in Article 22 of this
Directive,
— changes in the relaxations in the matching rules laid down in Annex I
to this Directive, to take account of the development of newcurrency-hedging instruments or progress made in economic and
monetary union,
— clarification of the definitions in order to ensure uniform application
of Directives 79/267/EEC and 90/619/EEC and of this Directivethroughout the Community,
— the technical adjustments necessary tothe rules fo r setting the
maxima applicable tointerest rates, pursuant toArticle 17 o f
Directive 79/267/EEC, as amended by this Directive, in particular totake account of progress made in economic and monetary union.
Article 48
1. Branches which have started business, in accordance with the
provisions in force in their Member State of establishment, before theentry into force of the provisions adopted in implementation of thisDirective shall be presumed tohave been subject tothe pro cedure laid
down in Article 10 (1) to (5) of Directive 79/267/EEC. They shall be
governed, from the date of that entry into force, by Articles 17, 23, 24and 26 of Directive 79/267/EEC and by Article 40 of this Directive.
2. Articles 11 and 14 of Directive 90/619/EEC, as amended by this
Directive, shall not affect rights acquired by assurance undertakings
carrying on business under the freedom to provide services before theentry into force of the provisions adopted in implementation of thisDirective.
Article 49
The following Article 31a shall be inserted in Directive 79/267/EEC:
‘Article 31a
1. Under the conditions laid down by national law, each Member
State shall authorize agencies and branches set up within its territory
and covered by this Title to transfer all or part of their portfolios ofcontracts to an accepting office established in the same MemberState if the competent authorities of that Member State or, ifappropriate, those of the Member State referred to in Article 30certify that after taking the transfer into account the accepting office
possesses the necessary solvency margin.
2. Under the conditions laid down by national law, each Member
State shall authorize agencies and branches set up within its territoryand covered by this Title to transfer all or part of their portfolios ofcontracts to an assurance undertaking with a head office in anotherMember State if the competent authorities of that Member Statecertify that after taking the transfer into account the accepting office
possesses the necessary solvency margin.
3. If under the conditions laid down by national law a Member
State authorizes agencies and branches set up within its territory andcovered by this Title to transfer all or part of their portfolios ofcontracts to an agency or branch covered by this Title and set upwithin the territory of another Member State it shall ensure that thecompetent authorities of the Member State of the accepting office or,1992L0096 — EN — 17.11.2000 — 002.001 — 33
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if appropriate, of the Member State referred to in Article 30 certify
that after taking the transfer into account the accepting officepossessesthe necessary solvency margin, that the law ofthe Member
State of the accepting office permits such a transfer and that the
State has agreed tothe transfer.
4. In the circumstances referred toin paragraphs 1, 2 and 3 the
Member State in which the transferring agency or branch is situated
shall authorize the transfer after obtaining the agreement of the
competent authorities of the Member State of the commitment,where different from the Member State in which the transferringagency or branch is situated.
5. The competent authorities of the Member States consulted
shall give their opinion or consent to the competent authorities of thehome Member State of the transferring assurance undertaking withinthree months of receiving a request; the absence of any responsefrom the authorities consulted within that period shall be consideredequivalent to a favourable opinion or tacit consent.
6. A transfer authorized in accordance with this Article shall be
published as laid down by national law in the Member State of thecommitment. Such transfers shall automatically be valid againstpolicy-holders, assured persons and any other persons having rights
or obligations arising out of the contracts transferred.
This provision shall not affect the Member States' right to give
policy-holders the opinion of cancelling contracts within a fixedperiod after a transfer.’
Article 50
Member States shall ensure that decisions taken in respect of an
assurance undertaking under laws, regulations and administrative
provisions adopted in accordance with this Directive may be subject
tothe right toapply tothe co urts.
Article 51
1. Member States shall adopt the laws, regulations and administrative
provisions necessary for their compliance with this Directive no laterthan 31 December 1993 and bring them intofo rce nolater than 1 July1994. They shall forthwith inform the Commission thereof.
When they adopt such measures, the Member States shall include
references tothis Directive o r shall make such references when they
effect official publication. The manner in which such references are to
be made shall be laid down by the Member States.
2. The Member States shall communicate to the Commission the
texts of the main provisions of national law which they adopt in the fieldcovered by this Directive.
Article 52
This Directive is addressed tothe Member States.1992L0096 — EN — 17.11.2000 — 002.001 — 34
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ANNEX I
MATCHING RULES
The currency in which the assurer's commitments are payable shall be determined
in accordance with the following rules:
1. Where the cover provided by a contract is expressed in terms of a particular
currency, the assurer's commitments are considered to be payable in that
currency.
2. Member States may authorize undertakings not to cover their technical
provisions, including their mathematical provisions, by matching assets if
application of the above procedures would result in the undertaking being
obliged, in order to comply with the matching principle, to hold assets in a
currency amounting to not more than 7 % of the assets existing in other
currencies.
3. Member States may choose not to require undertakings to apply the matching
principle where commitments are payable in a currency other than the
currency of one of the Community Member States, if investments in that
currency are regulated, if the currency is subject to transfer restrictions or if,
for similar reasons, it is not suitable for covering technical provisions.
4. Undertakings are authorized not to hold matching assets to cover an amount
not exceeding 20 % of their commitments in a particular currency.
However, total assets in all currencies combined must be at least equal to total
commitments in all currencies combined.
5. Each Member State may provide that, whenever under the preceding
procedures a commitment has to be covered by assets expressed in the
currency of a Member State, this requirement shall also be considered to be
satisfied when the assets are expressed in ecus.1992L0096 — EN — 17.11.2000 — 002.001 — 35
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ANNEX II
INFORMATION FOR POLICY-HOLDERS
The following information, which is to be communicated to the policy-holder
before the contract is concluded (A) or during the term of the contract (B), must
be provided in a clear and accurate manner, in writing, in an official language of
the Member State of the commitment.
However, such information may be in another language if the policy-holder so
requests and the law of the Member State sopermits or the policy-holder is free to
choose the law applicable.
A.Before concluding the contract
Information about the assurance undertaking Information about the commitment
(a) 1. The name of the undertaking and its legal
form
(a) 2. The name of the Member State in which
the head office and, where appropriate,
the agency or branch concluding the
contract is situated
(a) 3. The address of the head office and, where
appropriate, of the agency or branch
concluding the contract(a) 4. Definition of each benefit and each
option
(a) 5. Term of the contract(a) 6. Means of terminating the contract
(a) 7. Means of payment of premiums and
duration of payments
(a) 8. Means of calculation and distribution of
bonuses
(a) 9. Indication of surrender and paid-up
values and the extent towhich they are
guaranteed
(a) 10. Information on the premiums for each
benefit, both main benefits and supple-
mentary benefits, where appropriate
(a) 11. For unit-linked policies, definition of the
units towhich the benefits are linked
(a) 12. Indication of the nature of the under-
lying assets for unit-linked policies
(a) 13. Arrangements for application of the
cooling-off period
(a) 14. General information on the tax arrange-
ments applicable to the type of policy
(a) 15. The arrangements for handling
complaints concerning contracts by
policy-holders, lives assured or benefi-ciaries under contracts including, where
appropriate, the existence of a
complaints body, without prejudice to
the right totake legal pro ceedings
(a) 16. Law applicable tothe co ntract where the
parties do not have a free choice or,
where the parties are free to choose the
law applicable, the law the assurer
proposes to choose
B.During the term of the contract
In addition to the policy conditions, both general and special, the policy-
holder must receive the following information throughout the term of the
contract.
Information about the assurance undertaking Information about the commitment
(b) 1. Any change in the name of the under-
taking, its legal form or the address of its
head office and, where appropriate, of the
agency or branch which concluded the
contract(b) 2. All the information listed in points (a) (4)
to (a) (12) of A in the event of a change
in the policy conditions or amendment of
the law applicable tothe co ntract
(b) 3. Every year, information on the state of
bonuses1992L0096 — EN — 17.11.2000 — 002.001 — 36