1992L0049 — EN — 07.08.1995 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL DIRECTIVE 92/49/EEC
of 18 June 1992
on the coordination of laws, regulations and administrative provisions relating to direct insurance
other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life
insurance Directive)
(OJ L 228, 11.8.1992, p. 1)
Amended by:
Official Journal
No page date
►M1European Parliament and Council Directive 95/26/EC of 29 June 1995 L168 7 18.7.1995
Corrected by:
►C1Corrigendum, OJ L 311, 14.11.1997, p. 34 (92/49)
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▼B
COUNCIL DIRECTIVE 92/49/EEC
of 18 June 1992
on the coordination of laws, regulations and administrative provi-
sions relating to direct insurance other than life assurance andamending Directives 73/239/EEC and 88/357/EEC (third non-life
insurance 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),
HavingregardtotheopinionoftheEconomicandSocialCommittee(3),
(1)Whereas it is necessary to complete the internal market in direct
insuranceotherthanlifeassurancefromthepointofviewbothofthe right of establishment and of the freedom to provide services,to make it easier for insurance undertakings with head offices inthe Community to cover risks situated within the Community;
(2)Whereas the Second Council Directive of 22 June 1988 on thecoordination of laws, regulations and administrative provisionsrelating to direct insurance other than life assurance and layingdown provisions to facilitate the effective exercise of freedom toprovide services and amending Directive 72/239/EEC (88/357/EEC)(
4)has already contributed substantially to the achieve-
ment of the internal market in direct insurance other than lifeassurance by granting policyholders who, by virtue of theirstatus, their size or the nature of the risks to be insured, do notrequire special protection in the Member State in which a risk issituated complete freedom to avail themselves of the widestpossible insurance market;
(3)Whereas Directive 88/357/EEC therefore represents an importantstage in the merging of national markets into an integratedmarketandthatstagemustbesupplementedbyotherCommunityinstrumentswithaviewtoenablingallpolicyholders,irrespectiveof their status, their size or the nature of the risks to be insured,to have recourse to any insurer with a head office in theCommunity who carries on business there, under the right ofestablishment or the freedom to provide services, while guaran-teeing them adequate protection;
(4)Whereas this Directive forms part of the body of Communitylegislation already enacted which includes the First CouncilDirectiveof24July1973onthecoordinationoflaws,regulationsandadministrativeprovisionsrelatingtothetakingupandpursuitof the business of direct insurance other than life assurance(73/239/EEC)(
5)andtheCouncilDirectiveof19December1991
on the annual accounts and consolidated accounts of insuranceundertakings (91/674/EEC)(
6);
(1) OJ No C 244, 28. 9. 1990, p. 28 and
OJ No C 93, 13. 4. 1992, p. 1.
(2) OJ No C 67, 16. 3. 1992, p. 98 and
OJ No C 150, 15. 6. 1992.
(3) OJ No C 102, 18. 4. 1991, p. 7.
(4) OJ No L 172, 4. 7. 1988, p. 1. Last amended by Directive 90/618/EEC
(OJ No L 330, 29. 11. 1990, p. 44).
(5) OJ No L 228, 16. 8. 1973, p. 3. Last amended by Directive 88/357/EEC
(OJ No L 172, 4. 7. 1988, p. 1).
(6) OJ No L 374, 31. 12. 1991, p. 7.
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(5)Whereas the approach adopted consists in bringing about such
harmonization as is essential, necessary and sufficient to achievethe mutual recognition of authorizations and prudential controlsystems, thereby making it possible to grant a single authoriza-tion valid throughout the Community and apply the principle ofsupervision by the home Member State;
(6)Whereas,asaresult,thetakingupandthepursuitofthebusinessof insurance are henceforth to be subject to the grant of a singleofficial authorization issued by the competent authorities of theMember State in which an insurance undertaking has its headoffice; whereas such authorization enables an undertaking tocarry on business throughout the Community, under the right ofestablishment or the freedom to provide services; whereas theMember State of the branch or of the provision of services mayno longer require insurance undertakings which wish to carry oninsurance business there and which have already been authorizedin their home Member State to seek fresh authorization; whereasDirectives 73/239/EEC and 88/357/EEC should therefore beamended along those lines;
(7)Whereas the competent authorities of home Member States willhenceforth be responsible for monitoring the financial health ofinsurance undertakings, including their state of solvency, theestablishment of adequate technical provisions and the coveringof those provisions by matching assets;
(8)Whereas certain provisions of this Directive define minimumstandards; whereas a home Member State may lay down stricterrules for insurance undertakings authorized by its own competentauthorities;
(9)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 insurance undertak-ings 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 appropriatesafeguards or impose sanctions aimed at preventing irregularitiesand infringements of the provisions on insurance supervision;
(10)Whereas the internal market comprises an area without internalfrontiers and involves access to all insurance business other thanlife assurance throughout the Community and, hence, the poss-ibility for any duly authorized insurer to cover any of the risksreferred to in the Annex to Directive 73/239/EEC; whereas, tothat end, the monopoly enjoyed by certain bodies in certainMemberStatesinrespectofthecoverageofcertainrisksmustbeabolished;
(11)Whereastheprovisionsontransfersofportfoliosmustbeadaptedto bring them into line with the single authorization systemintroduced by this Directive;
(12)Whereas Directive 91/674/EEC has already effected the neces-sary harmonization of the Member States’ rules on the technicalprovisions which insurers are required to establish to cover theircommitments, and that harmonization makes it possible to grantmutual recognition of those provisions;
(13)Whereas the rules governing the spread, localization andmatching of the assets used to cover technical provisions must becoordinated 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 the Council Directive of 24 June 1988 forthe implementation of Article 67 of the Treaty (88/361/EEC)(
1)
(1) OJ No L 178, 8.7.1988, p. 5.
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▼B
and the progress made by the Community towards economic and
monetary union;
(14)Whereas, however, the home Member State may not requireinsurance undertakings to invest the assets covering their tech-nical provisions in particular categories of assets, as such arequirement would be incompatible with the measures on theliberalization of capital movements provided for in Directive88/361/EEC;
(15)Whereas, pending the adoption of a Directive on investmentservices harmonizing inter aliathe definition of the concept of
regulated market, for the purposes of this Directive and withoutprejudice to such future harmonization that concept must bedefined provisionally; whereas that definition will be replaced bythat harmonized at Community level which will give the homeMember State of the market the responsibilities for these matterswhich this Directive transitionally gives to the insurance underta-king’s home Member State;
(16)Whereas the list of items of which the solvency margin requiredbyDirective73/239/EECmaybemadeupmustbesupplementedto take account of new financial instruments and of the facilitiesgranted to other financial institutions for the constitution of theirown funds;
(17)Whereas within the framework of an integrated insurance marketpolicyholders who, by virtue of their status, their size or thenature of the risks to be insured, do not require special protectionin the Member State in which a risk is situated should be grantedcomplete freedom to choose the law applicable to their insurancecontracts;
(18)Whereas the harmonization of insurance contract law is not aprior condition for the achievement of the internal market ininsurance; whereas, therefore, the opportunity afforded to theMember States of imposing the application of their law to insur-ance contracts covering risks situated within their territories islikely to provide adequate safeguards for policyholders whorequire special protection;
(19)Whereas within the framework of an internal market it is in thepolicyholder’s interest that he should have access to the widestpossible range of insurance products available in the Communityso that he can choose that which is best suited to his needs;whereasitisfortheMemberStateinwhichtheriskissituatedtoensure that there is nothing to prevent the marketing within itsterritory of all the insurance products offered for sale in theCommunity as long as they do not conflict with the legal provi-sions protecting the general good in force in the Member State inwhich the risk is situated, and insofar as the general good is notsafeguarded by the rules of the home Member State, providedthatsuchprovisionsmustbeappliedwithoutdiscriminationtoallundertakings operating in that Member State and be objectivelynecessary and in proportion to the objective pursued;
(20)Whereas the Member States must be able to ensure that theinsurance products and contract documents used, under the rightof establishment or the freedom to provide services, to coverrisks situated within their territories comply with such specificlegal provisions protecting the general good as are applicable;whereas the systems of supervision to be employed must meetthe requirements of an integrated market but their employmentmay not constitute a prior condition for carrying on insurancebusiness; whereas from this standpoint systems for the priorapproval of policy conditions do not appear to be justified;whereas it is therefore necessary to provide for other systemsbetter suited to the requirements of an internal market whichenable every Member State to guarantee policyholders adequateprotection;
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(21)Whereas if a policyholder is a natural person, he should be
informed by the insurance undertaking of the law which willapplytothecontractandofthearrangementsforhandlingpolicy-holders’ complaints concerning contracts;
(22)Whereas in some Member States private or voluntary healthinsurance serves as a partial or complete alternative to healthcover provided for by the social security systems;
(23)Whereas the nature and social consequences of health insurancecontractsjustifythecompetentauthoritiesoftheMemberStateinwhich a risk is situated in requiring systematic notification of thegeneral and special policy conditions in order to verify that suchcontracts are a partial or complete alternative to the health coverprovided by the social security system; whereas such verificationmust not be a prior condition for the marketing of the products;whereas the particular nature of health insurance, serving as apartialorcompletealternativetothehealthcoverprovidedbythesocial security system, distinguishes it from other classes ofindemnity insurance and life assurance insofar as it is necessaryto ensure that policyholders have effective access to privatehealth cover or health cover taken out on a voluntary basisregardless of their age or risk profile;
(24)Whereas to this end some Member States have adopted specificlegal provisions; whereas, to protect the general good, it ispossible to adopt or maintain such legal provisions in so far asthey do not unduly restrict the right of establishment or thefreedom to provide services, it being understood that such provi-sions must apply in an identical manner whatever the homeMember State of the undertaking may be; whereas these legalprovisions may differ in nature according to the conditions ineach Member State; whereas these measures may provide foropen enrolment, rating on a uniform basis according to the typeof policy and lifetime cover; whereas that objective may also beachieved by requiring undertakings offering private health coveror health cover taken out on a voluntary basis to offer standardpolicies in line with the cover provided by statutory socialsecurity schemes at a premium rate at or below a prescribedmaximum and to participate in loss compensation schemes;whereas, as a further possibility, it may be required that thetechnical basis of private health cover or health cover taken outon a voluntary basis be similar to that of life assurance;
(25)Whereas, because of the coordination effected by Directive 73/239/EEC as amended by this Directive, the possibility, affordedtotheFederalRepublicofGermanyunderArticle7(2)(c)ofthesame Directive, of prohibiting the simultaneous transaction ofhealth insurance and other classes is no longer justified and musttherefore be abolished;
(26)Whereas Member States may require any insurance undertakingsoffering compulsory insurance against accidents at work at theirown risk within their territories to comply with the specificprovisions laid down in their national law on such insurance;whereas, however, this requirement may not apply to the provi-sions concerning financial supervision, which are the exclusiveresponsibility of the home Member State;
(27)Whereas exercise of the right of establishment requires an under-taking to maintain a permanent presence in the Member State ofthe branch; whereas responsibility for the specific interests ofinsured persons and victims in the case of third-party liabilitymotorinsurancerequiresadequatestructuresintheMemberStateof the branch for the collection of all the necessary informationon compensation claims relating to that risk, with sufficientpowers to represent the undertaking vis-à-vis injured parties whocould claim compensation, including powers to pay suchcompensation, and to represent the undertaking or, if necessary,to arrange for it to be represented in the courts and before the
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▼B
competent authorities of that Member State in connection with
claims for compensation;
(28)WhereaswithintheframeworkoftheinternalmarketnoMemberState may continue to prohibit the simultaneous carrying on ofinsurancebusinesswithinitsterritoryundertherightofestablish-ment and the freedom to provide services; whereas the optiongranted to Member States in this connection by Directive 88/357/EEC should therefore be abolished;
(29)Whereasprovisionshouldbemadeforasystemofpenaltiestobeimposed when, in the Member State in which a risk is situated,an insurance undertaking does not comply with those provisionsprotecting the general good that are applicable to it;
(30)Whereas some Member States do not subject insurance transac-tions to any form of indirect taxation, while the majority applyspecial taxes and other forms of contribution, includingsurcharges intended for compensation bodies; whereas the struc-tures and rates of such taxes and contributions vary considerablybetween the Member States in which they are applied; whereas itis desirable to prevent existing differences’ leading to distortionsof competition in insurance services between Member States;whereas, pending subsequent harmonization, application of thetax systems and other forms of contribution provided for by theMemberStatesinwhichrisksaresituatedislikelytoremedythatproblem and it is for the Member States to make arrangements toensure that such taxes and contributions are collected;
(31)Whereas technical adjustments to the detailed rules laid down inthisDirectivemaybenecessaryfromtimetotimetotakeaccountof the future development of the insurance industry; whereas theCommission will make such adjustments as and when necessary,after consulting the Insurance Committee set up by Directive91/675/EEC(
1), in the exercise of the implementing powers
conferred on it by the Treaty;
(32)Whereas it is necessary to adopt specific provisions intended toensure smooth transition from the legal regime in existence whenthisDirectivebecomesapplicabletotheregimethatitintroduces,taking care not to place an additional workload on MemberStates’ competent authorities;
(33)Whereas under Article 8 c of the Treaty account should be takenof the extent of the effort which must be made by certain econo-mies at different stages of development; whereas, therefore,transitional arrangements should be adopted for the gradualapplication of this Directive by certain Member States,
HAS ADOPTED THIS DIRECTIVE:
TITLEI
DEFINITIONS AND SCOPE
Article 1
For the purposes of this Directive:
(a)insurance undertaking shall mean an undertaking which has
received official authorization in accordance with Article 6 ofDirective 73/239/EEC;
(b)branchshallmeananagencyorbranchofaninsuranceundertaking,
having regard to Article 3 of Directive 88/357/EEC;
(c)home Member State shallmeantheMemberStateinwhichthehead
office of the insurance undertaking covering a risk is situated;
(1) OJ No L 374, 31. 12. 1991, p. 32.
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(d)Member State of the branch shall mean the Member State in which
the branch covering a risk is situated;
(e)Member State of the provision of services shall mean the Member
State in which a risk is situated, as defined in Article 2 (d) ofDirective 88/357/EEC, if it is covered by an insurance undertakingor a branch situated in another Member State;
(f)controlshall mean the relationship between a parent undertaking
and a subsidiary, as defined in Article 1 of Directive 83/349/EEC(
1), or a similar relationship between any natural or legal
person and an undertaking;
(g)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 significantinfluence over the management of the undertaking in which aholding subsists.
For the purposes of this definition, in the context of Articles 8 and
15 and of the other levels of holding referred to in Article 15, thevoting rights referred to in Article 7 of Directive 88/627/EEC(
2)
shall be taken into account;
(h)parent undertaking shall mean a parent undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC;
(i)subsidiary shall mean a subsidiary undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC; any subsidiary of asubsidiary undertaking shall also be regarded as a subsidiary of theundertaking which is those undertakings’ ultimate parent under-taking;
(j)regulated market shall mean a financial market regarded by an
undertaking’s home Member State as a regulated market pendingthe adoption of a definition in a Directive on investment servicesand 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 the CouncilDirective of 5 March 1979 coordinating the conditions for theadmission of securities to official stock-exchange listing (79/279/EEC)(
3) applies, the conditions for admission to listing
imposed in that Directive or, where that Directive does notapply, the conditions to be satisfied by a financial instrument inorder 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 home Member State and meetcomparable requirements. Any financial instruments dealt in on thatmarket must be of a quality comparable to that of the instrumentsdealt in on the regulated market or markets of the Member State inquestion;
(k)competent authorities shall mean the national authorities which are
empowered by law or regulation to supervise insurance undertak-ings;
▼
M1
(l) ‘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 capitalof an undertaking or
(1) OJ No L 193, 18. 7. 1983, p. 1.
(2) OJ No L 348, 17. 12. 1988, p. 62.
(3) OJ No L 66, 13. 3. 1979, p. 21. Last amended by Directive 82/148/EEC
(OJ No L 62, 5. 3. 1982, p. 22).
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▼M1
(b) ‘control', which shall mean the relationship between a parent
undertaking and a subsidiary, in all the cases referred to inArticle 1 (1) and (2) of Directive 83/349/EEC(
1), or a similar
relationship between any natural or legal person and an under-taking; any subsidiary undertaking of a subsidiary undertakingshall also be considered a subsidiary of the parent undertakingwhich is at the head of those undertakings.
A situation in which two or more natural or legal persons are perma-
nently linked to one and the same person by a control relationship shallalso be regarded as constituting a close link between such persons.
▼
B
Article 2
1. This Directive shall apply to the types of insurance and undertak-
ings referred to in Article 1 of Directive 73/239/EEC.
2. This Directive shall apply neither to the types of insurance or
operations, nor to undertakings or institutions to which Directive 73/239/EEC does not apply, nor to the bodies referred to in Article 4 ofthat Directive.
Article 3
Notwithstanding Article 2 (2), Member States shall take every step to
ensure that monopolies in respect of the taking up of the business ofcertain classes of insurance, granted to bodies established within theirterritories and referred to in Article 4 of Directive 73/239/EEC, areabolished by 1 July 1994.
TITLEII
THE TAKING UP OF THE BUSINESS OF INSURANCE
Article 4
Article 6 of Directive 73/239/EEC shall be replaced by the following:
‘Article 6
The taking up of the business of direct insurance shall be subject to
prior official authorization.
Suchauthorizationshallbesoughtfromthecompetentauthoritiesof
the home Member State by:
(a) any undertaking which establishes its head office within the
territory of that State;
(b) any undertaking which, having received the authorization
referred to in the first subparagraph, extends its business to anentire class or to other classes'.
Article 5
Article 7 of Directive 73/239/EEC shall be replaced by the following:
‘Article 7
1. Authorization shall be valid for the entire Community. It shall
permit an undertaking to carry on business there, under either theright of establishment or the freedom to provideservices.2. Authorization shall be granted for a particular class ofinsurance. It shall cover the entire class, unless the applicant wishesto cover only some of the risks pertaining to that class, as listed inpoint A of the Annex.
(1) OJ No L193, 18. 7. 1983, p. 1. Directive as last amended by Directive
90/605/EEC (OJ No L317, 16. 11. 1990, p. 60).
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However:
(a) MemberStatesmaygrantauthorizationforthegroupsofclasses
listedinpointBoftheAnnex,attachingtothemtheappropriatedenominations specified therein;
(b) authorization granted for one class or a group of classes shall
alsobevalidforthepurposeofcoveringancillaryrisksincludedin another class if the conditions imposed in point C of theAnnex are fulfilled'.
Article 6
Article 8 of Directive 72/239/EEC shall be replaced by the following:
‘Article 8
1. The home Member State shall require every insurance under-
taking 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”,“association d’assurance mutuelle — onderlinge verzeker-ingsvereniging”, “société coopérative — coöperatievevennootschap”;
— in the case of the Kingdom of Denmark: “aktieselskaber”,
“gensidige selskaber”;
— 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 prévoyancerégie par le code de la sécurité sociale”, “institution deprévoyance régie par le code rural” and “mutuelles régiespar le code de la mutualité”;
— in the case of Ireland: incorporated companies limited by
shares or by guarantee or unlimited;
— in the case of the Italian Republic: “società per azioni”,
“società cooperativa”, “mutua di assicurazione”;
— in the case of the Grand Duchy of Luxembourg: “société
anonyme”, “société en commandite par actions”, “associa-tion d’assurances mutuelles”, “société coopérative”;
— in the case of the Kingdom of the Netherlands: “naamloze
vennootschap”, “onderlinge waarborgmaatschapp ĳ”;
— in the case of the United Kingdom: incorporated companies
limited by shares or by guarantee or unlimited, societiesregistered under the Industrial and Provident Societies Acts,societies registered under the Friendly Societies Acts, theassociation of underwriters known as Lloyd’s;
— in the case of the Hellenic Republic: “ ανώνυµη εταιρία ”,
“αλληλασφαλιστικός συνεταιρισµός ”;
— in the case of the Kingdom of Spain: “sociedad anónima”,
“sociedad mutua”, “sociedad cooperativa”;
— in the case of the Portuguese Republic: “sociedade
anónima”, “mútua de seguros”.
An insurance undertaking may also adopt the form of a Euro-
pean Company (SE) 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 objects insurance operations under conditionsequivalent to those under which private-law undertakingsoperate;
(b) limit its objects to the business of insurance and operations
arising directly therefrom, to the exclusion of all other commer-cial business;
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(c) submit a scheme of operations in accordance with Article 9;
(d) possess the minimum guarantee fund provided for in Article 17
(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 toextend an authorization covering only some of the risks pertainingto one class shall be required to submit a scheme of operations inaccordance with Article 9.
It shall, furthermore, be required to show proof that it possesses the
solvency margin provided for in Article 16 and, if with regard tosuch other classes Article 17 (2) requires a higher minimum guar-antee fund than before, that is possesses thatminimum.3. Nothing in this Directive shall prevent MemberStates from maintaining in force or introducing laws, regulations oradministrative provisions requiring approval of the memorandumand articles of association and communication of any other docu-ments necessary for the normal exercise of supervision.
Member States shall not, however, adopt provisions requiring the
prior approval or systematic notification of general and specialpolicy conditions, scales of premiums and forms and other printeddocuments which an undertaking intends to use in its dealings withpolicyholders.
Member States may not retain or introduce prior notification or
approval of proposed increases in premium rates except as part ofgeneral price-control systems.
Nothing in this Directive shall prevent Member States from
subjectingundertakingsseekingorhavingobtainedauthorizationforclass18inpointAoftheAnnextochecksontheirdirectorindirectresources in staff and equipment, including the qualification of theirmedical teams and the quality of the equipment available to suchundertakings to meet their commitments arising out of this class ofinsurance.4. Theabovementionedprovisionsmaynotrequirethatany application for authorization be considered in the light of theeconomic requirements of the market'.
Article 7
Article 9 of Directive 73/239/EEC shall be replaced by the following:
‘Article 9
The scheme of operations referred to in Article 8 (1) (c) shall
include particulars or proof concerning:
(a) the nature of the risks which the undertaking proposes to cover;
(b) the guiding principles as to reinsurance;
(c) the items constituting the minimum guarantee fund;
(d) estimates of the costs of setting up the administrative services
and the organization for securing business; the financialresources intended to meet those costs and, if the risks to becovered are classified in class 18 in point A of the Annex, theresources at the undertaking’s disposal for the provision of theassistance promised
and, in addition, for the first three financial years:
(e) estimates of management expenses other than installation costs,
in particular current general expenses and commissions;
(f) estimates of premiums or contributions and claims;
(g) a forecast balance sheet;(h) estimates of the financial resources intended to cover under-
writing liabilities and the solvency margin.'
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Article 8
The competent authorities of the home Member State shall not grant an
undertaking authorization to take up the business of insurance beforethey have been informed of the identities of the shareholders ormembers, direct or indirect, whether natural or legal persons, who havequalifying 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 insuranceundertaking, they are not satisfied as to the qualifications of the share-holders or members.
TITLEIII
HARMONIZATION OF THE CONDITIONS GOVERNING THE BUSI-
NESS OF INSURANCE
Chapter 1
Article 9
Article 13 of Directive 73/239/EEC shall be replaced by the following:
‘Article 13
1. The financial supervision of an insurance undertaking,
including that of the business it carries on either through branchesor under the freedom to provide services, shall be the sole responsi-bility of the home Member State.2. That financial supervisionshall include verification, with respect to the insurance underta-king’s entire business, of its state of solvency, of the establishmentof technical provisions and of the assets covering them in accord-ance with the rules laid down or practices followed in the homeMember State under provisions adopted at Community level.
Where the undertaking in question is authorized to cover the risks
classified in class 18 in point A of the Annex, supervision shallextend to monitoring of the technical resources which the under-taking has at its disposal for the purpose of carrying out the assis-tance operations it has undertaken to perform, where the law of thehome Member State provides for the monitoring of suchresources.3. The competent authorities of the home MemberState shall require every insurance undertaking to have soundadministrative and accounting procedures and adequate internalcontrol mechanisms.'
Article 10
Article 14 of Directive 73/239/EEC shall be replaced by the following:
‘Article 14
The Member State of the branch shall provide that where an insur-
ance undertaking authorized in another Member State carries onbusiness through a branch the competent authorities of the homeMember State may, after having informed the competent authoritiesof the Member State of the branch, carry out themselves or throughthe intermediary of persons they appoint for that purpose on-the-spotverificationoftheinformationnecessarytoensurethefinancialsupervision of the undertaking. The authorities of the Member Stateof the branch may participate in that verification'.
Article 11
Article 19 (2) and (3) of Directive 73/239/EEC shall be replaced by the
following:
‘2. MemberStatesshallrequireinsuranceundertakingswithhead
offices within their territories to render periodically the returns,together with statistical documents, which are necessary for thepurposes of supervision. The competent authorities shall provide
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each other with any documents and information that are useful forthe purposes of supervision.
3. Every Member State shall take all steps necessary to ensure
that the competent authorities have the powers and means necessaryfor the supervision of the business of insurance undertakings withhead offices within their territories, including business carried onoutwith those territories, in accordance with the Council Directivesgoverning such business and for the purpose of seeing that they areimplemented.
These powers and means must, in particular, enable the competent
authorities to:
(a) make detailed enquiries regarding an undertaking’s situation
and the whole of its business, inter alia, by:
— gathering information or requiring the submission of docu-
ments concerning its insurance business,
— carrying out on-the-spot investigations at the undertaking’s
premises;
(b) takeanymeasureswithregardtoanundertaking,itsdirectorsor
managers or the persons who control it, that are appropriate andnecessarytoensurethatthatundertaking’sbusinesscontinuestocomply with the laws, regulations and administrative provisionswith which the undertaking must comply in each Member Stateand in particular with the scheme of operations insofar as itremains mandatory, and to prevent or remedy any irregularitiesprejudicial to the interests of insured persons;
(c) ensure that those measures are carried out, if need be by
enforcement and where appropriate through judicial channels.
Member States may also make provision for the competent authori-
ties to obtain any information regarding contracts which are held byintermediaries.'
Article 12
1. Article 11 (2) to (7) of Directive 88/357/EEC is hereby repealed.2. Under the conditions laid down by national law, each Member
State shall authorize insurance undertakings with head offices within itsterritory to transfer all or part of their portfolios of contracts, concludedeither under the right of establishment or the freedom to provideservices,toanacceptingofficeestablishedwithintheCommunity,ifthecompetent authorities of the home Member State of the accepting officecertify that after taking the transfer into account the latter possesses thenecessary solvency margin.
3. Where a branch proposes to transfer all or part of its portfolio of
contracts, concluded either under the right of establishment or thefreedom to provide services, the Member State of the branch shall beconsulted.
4. In the circumstances referred to in paragraphs 2 and 3, the
competent authorities of the home Member State of the transferringundertaking shall authorize the transfer after obtaining the agreement ofthe competent authorities of the Member States in which the risks aresituated.
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 insurance undertaking within threemonths of receiving a request; the absence of any response within thatperiodfromtheauthoritiesconsultedshallbeconsideredequivalenttoafavourable 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 in whichthe risk is situated. Such transfers shall automatically be valid againstpolicy-holders, insured persons and any other persons having rights orobligations arising out of the contracts transferred.
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This provision shall not affect the Member States’ rights to give policy-
holders the option of cancelling contracts within a fixed period after atransfer.
Article 13
1. Article 20 of Directive 73/239/EEC shall be replaced by the
following:
‘Article 20
1. If an undertaking does not comply with Article 15, the
competentauthorityofitshomeMemberStatemayprohibitthefreedisposal of its assets after having communicated its intention to thecompetent authorities of the Member States in which the risks aresituated.2. For the purposes of restoring the financial situation ofan undertaking the solvency margin of which has fallen below theminimum required under Article 16 (3), the competent authority ofthe home Member State shall require that a plan for the restorationof a sound financial situation be submitted for its approval.
In exceptional circumstances, if the competent authority is of the
opinion that the financial situation of the undertaking will deteri-orate further, 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 solvencymargin falls below the guarantee fund as defined in Article 17, thecompetent authority of the home Member State shall require theundertaking to submit a short-term finance scheme 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 business accord-ingly and the latter shall, at the request of the former, take the samemeasures.4. Thecompetentauthoritiesmayfurthertakeallmeas-ures necessary to safeguard the interests of insured persons in thecases provided for in paragraphs 1, 2 and 3.5. Each MemberState shall take the measures necessary to be able, in accordancewith its national law, to prohibit the free disposal of assets locatedwithin its territory at the request, in the cases provided for inparagraphs 1, 2 and 3, of the undertaking’s home Member State,which shall designate the assets to be covered by such measures.'
Article 14
Article 22 of Directive 73/239/EEC shall be replaced by the following:
‘Article 22
1. Authorization granted to an insurance undertaking by the
competent authority of its home Member State may be withdrawnby that authority if that undertaking:
(a) does not make use of that authorization within 12 months,
expressly renounces it or ceases to carry on business for morethan 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
specifiedintherestorationplanorfinanceschemereferredtoinArticle 20;
(d) fails seriously in its obligation under the regulations to which it
is subject.
In the event of the withdrawal or lapse of 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 undertakingfrom commencing new operations within their territories, undereither the right of establishment or the freedom to provide services.The home Member State’s competent authority shall, in conjunction
1992L0049 — EN — 07.08.1995 — 001.001 — 14
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with those authorities, take all measures necessary to safeguard the
interests of insured persons and, in particular, shall restrict the freedisposal of the undertaking’s assets in accordance with Article 20(1), (2), second subparagraph, or (3), second subpara-graph.2. Any decision to withdraw authorization shall besupported by precise reasons and communicated to the undertakingin question.'
Article 15
1. Member States shall require any natural or legal person
►
C1who proposes to hold ◄, directly or indirectly, a qualifying
holding in an insurance undertaking first to inform the competentauthorities of the home Member State, indicating the size of hisintended holding. Such a person must likewise inform the competentauthorities of the home Member State if he proposes to increase hisqualifying holding so that the proportion of the voting rights or of thecapital he holds would reach or exceed 20, 33 or 50 % or so that theinsurance undertaking would become his subsidiary.
The competent authorities of the home Member State shall have up to
three months from the date of the notification provided for in the firstsubparagraph to oppose such a plan if, in view of the need to ensuresound and prudent management of the insurance undertaking in ques-tion, they are not satisfied as to the qualification of the person referredto in the first subparagraph. If they do not oppose the plan in question,they may fix a maximum period fort its implementation.
2. Member States shall require any natural or legal person who
proposes to dispose, directly or indirectly, of a qualifying holding in aninsurance 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 toreduce his qualifying holding so that the proportion of the voting rightsorofthecapitalheholdswouldfallbelow20,33or50%orsothattheinsurance undertaking would cease to be his subsidiary.
3. On becoming aware of them, insurance undertakings shall inform
the competent authorities of their home Member States of any acquisi-tions or disposals of holdings in their capital that cause holdings toexceedorfallbelowanyofthetresholdsreferredtoinparagraphs1and2.
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 atannual general meetings of shareholders or members or as a result ofcompliance with the regulations relating to companies listed on stockexchanges.
4. MemberStatesshallrequirethat,wheretheinfluenceexercisedby
the persons referred to in paragraph 1 is likely to operate against theprudent and sound management of an insurance undertaking, thecompetent authorities of the home Member State shall take appropriatemeasurestoputanendtothatsituation.Suchmeasuresmayconsist,forexample, in injunctions, sanctions against directors and managers, orsuspension 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 imposes inparagraph 1. If a holding is acquired despite the opposition of thecompetent authorities, the Member States shall, regardless of any othersanctionstobeadopted,provideeitherforexerciseofthecorrespondingvoting rights to be suspended, or for the nullity of votes cast or for thepossibility of their annulment.
Article 16
1. The Member States shall provide that all persons working or who
have worked for the competent authorities, as well as auditors andexperts acting on behalf of the competent authorities, shall be bound bythe obligation of professional secrecy. This means that no confidential
1992L0049 — EN — 07.08.1995 — 001.001 — 15
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information which they may receive while performing their duties maybe divulged to any person or authority whatsoever, except in summaryor aggregate form, such that individual insurance undertakings cannotbe identified, without prejudice to cases covered by criminal law.
Nevertheless, where an insurance undertaking has been declared bank-
rupt or is being compulsorily wound up, confidential information whichdoes not concern third parties involved in attempts to rescue that under-taking may be divulged in civil or commercial proceedings.
2. Paragraph 1 shall not prevent the competent authorities of
different Member States from exchanging information in accordancewith the Directives applicable to insurance undertakings. Such informa-tion shall be subject to the conditions of professional secrecy laid downin paragraph 1.
3. Member States may conclude cooperation agreements, providing
for exchanges of information, with the competent authorities of thirdcountries only if the information disclosed is subject to guarantees ofprofessional secrecy at least equivalent to those provided for in thisArticle.
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 insurance are met and to facilitate monitoring of the conduct ofsuch business, especially with regard to the monitoring of technicalprovisions,solvencymargins,administrativeandaccountingproced-ures and internal control mechanisms,
— to impose sanctions,— inadministrativeappealsagainstdecisionsofthecompetentauthori-
ties, or
— in court proceedings initiated under Article 56 or under special
provisions provided for in the Directives adopted in the field ofinsurance undertakings.
5. Paragraphs1and4shallnotprecludetheexchangeofinformation
withinaMemberState,wheretherearetwoormorecompetentauthori-ties in the same Member State, or, between Member States, betweencompetent authorities and:
— authorities responsible for the official supervision of credit institu-
tions and other financial organizations and the authorities respon-sible for the supervision of financial markets,
— bodies involved in the liquidation and bankruptcy of insurance
undertakings and in other similar procedures, and
— persons responsible for carrying out statutory audits of the accounts
of insurance undertakings and other financial institutions,
in the discharge of their supervisory functions, or the disclosure to
bodies which administer compulsory winding-up proceedings or guar-antee funds of information necessary to the performance of their duties.The information received by those authorities, bodies and persons shallbe subject to the conditions of professional secrecy laid down in para-graph 1.
▼
M1
5a. Notwithstandingparagraphs1to4,MemberStatesmayauthorizeexchanges 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 undertak-ings, credit institutions, investment firms and other financial institu-tions, or
— independent actuaries of insurance undertakings carrying out legal
supervision of those undertakings and the bodies responsible foroverseeing such actuaries.
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Die Mitgliedstaaten, die von der Möglichkeit des Unterabsatzes 1
Gebrauch machen, verlangen zumindest, daß folgende Bedingungenerfüllt werden:
— this information shall be for the purpose of carrying out the over-
seeing or legal supervision referred to in the first subparagraph,
— information receivedin 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, solelyfor 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 1to 4, Member States may, with the
aim of strengthening the stability, including integrity, of the financialsystem, authorize the exchange of information between the competentauthorities and the authorities or bodies responsible under the law forthe 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 to in the first subparagraph,
— information received in this context shall be subject to the condi-
tions 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, solelyfor the 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 forthat purpose and not employed in the public sector, the possibility ofexchanging 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 shall commu-nicate to the competent authorities which have disclosed the informa-tion, the names and precise responsibilities of the persons to whom it isto be sent.
Member States shall communicate to the Commission and to the other
Member States the names of the authorities or bodies which mayreceive information pursuant to this paragraph.
Before 31 December 2000, the Commission shall draw up a report on
the application of the provisions of this paragraph.
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 over-
seeing payment systems,
information intended for the performance of their task and may
authorize such authorities or bodies to communicate to the competentauthorities such information as they may need for the purposes ofparagraph 4. Information received in this context shall be subject to theconditions of professonial secrecy imposed in this Article.
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6. In addition, notwithstanding paragraphs 1 and 4, the MemberStates may, under provisions laid down by law, authorize the disclosureof certain information to other departments of their central governmentadministrations responsible for legislation on the supervision of creditinstitutions, financial institutions, investment services and insurancecompanies and to inspectors acting on behalf of those departments.
However, such disclosures may be made only where necessary for
reasons of prudential control.
The Member States shall, however, provide that information received
under paragraphs 2 and 5 and that obtained by means of the on-the-spotverification referred to in Article 14 of Directive 73/239/EEC maynever be disclosed in the cases referred to in this paragraph except withthe express consent of the competent authorities which disclosed theinformation or of the competent authorities of the Member State inwhich on-the-spot verification was carried out.
▼
M1
Article 16a
1. Member States shall provide at least that:
(a) any person authorized within the meaning of Directive 84/
253/EEC(1), performing in an insurance undertaking the task
described in Article 51 of Directive 78/660/EEC(2), Article 37 of
Directive83/349/EECorArticle31ofDirective85/611/EECoranyother statutory task, shall have a duty to report promptly to thecompetent authorities any fact or decision concerning that under-taking of which he has become aware while carrying out that taskwhich is liable to:
— constitute a material breach of the laws, regulations or adminis-
trative provisions which lay down the conditions governingauthorization or which specifically govern pursuit of the activi-ties of insurance undertaking, 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 outa task as described in (a) in an undertaking having close linksresulting from a control relationship with the insurance undertakingwithin which 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 breachof any restriction on disclosure of information imposed by contract ofby any legislative, regulatory or administrative provision and shall notinvolce such persons in liability of any kind.
▼
B
Chapter 2
Article 17
Article 15 of Directive 73/239/EEC shall be replaced by the following:
‘Article 151. The home Member State shall require every insurance under-
taking to establish adequate technical provisions in respect of itsentire business.
(1) OJ No L126, 12. 5. 1984, p. 20.
(2) OJ No L222, 14. 8. 1978, p. 11. Directive as last amended by Directive
90/605/EEC (OJ No L317, 16. 11. 1990, p. 60).
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The amount of such technical provisions shall be determined inaccordance with the rules laid down in Directive 91/674/EEC.2. The home Member State shall require every insur-ance undertaking to cover the technical provisions in respect of itsentire business by matching assets in accordance with Article 6 ofDirective 88/357/EEC. In respect of risks situated within the Euro-pean Community, those assets must be localized within theCommunity.MemberStatesshallnotrequireinsuranceundertakingsto localize their assets in any particular Member State. The homeMember State may, however, permit relaxations in the rules on thelocalization of assets.3. If the home Member State allows anytechnical provisions to be covered by claims against reinsurers, itshallfixthepercentagesoallowed.Insuchcases,itmaynotspecifythe localization of the assets representing such claims.'
Article 18
Article15aofDirective72/239/EECshallbereplacedbythefollowing:
‘Article 15a
1. Member States shall require every insurance undertaking with
a head office within their territories which underwrites risksincluded in class 14 in point A of the Annex (hereinafter referred toas “credit insurance”) to set up an equalization reserve for thepurpose of offsetting any technical deficit or above-average claimsration arising in that class in any financial year.2. The equaliza-tion reserve shall be calculated in accordance with the rules laiddownbythehomeMemberStateinaccordancewithoneofthefourmethodssetoutinpointDoftheAnnex,whichshallberegardedasequivalent.3. Up to the amount calculated in accordance with themethods set out in point D of the Annex, the equalization reserveshall be disregarded for the purpose of calculating the solvencymargin.4. Member States may exempt insurance undertakingswith head offices within their territories from the obligation to setup equalization reserves for credit insurance business where thepremiums or contributions receivable in respect of credit insuranceare less tha n4%o ft h e total premiums or contributions receivable
by them and less than ECU 2500000.'
Article 19
Article 23 of Directive 88/357/EEC is hereby repealed.
Article 20
The assets covering the technical provisions shall take account of the
typeofbusinesscarriedonbyanundertakinginsuchawayastosecurethe safety, yield and marketability of its investments, which the under-taking shall ensure are diversified and adequately spread.
Article 21
1. The home Member State may not authorize insurance undertak-
ings to cover their technical provisions with any but the followingcategories 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;
1992L0049 — EN — 07.08.1995 — 001.001 — 19
▼B
(e) land, buildings and immovable property rights;
B.Debts and claims
(f) debts owed by reinsurers, including reinsurers’ shares of tech-
nical provisions;
(g) deposits with and debts owed by ceding undertakings;(h) debts owed by policyholders and intermediaries arising out of
direct and reinsurance operations;
(i) claims arising out of salvage and subrogation;(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 bodies authorized to receive deposits;
(n) deferred acquisition costs;(o) accrued interest and rent, other accrued income and prepay-
ments;
In the case of the association of underwriters know as Lloyd’s, asset
categories shall also include guarantees and letters of credit issued bycreditinstitutionswithinthemeaningofDirective77/780/EEC(
1)orby
assurance undertakings, together with verifiable sums arising out of lifeassurance policies, to the extent that they represent funds belonging tomembers.
The inclusion of any asset or category of assets listed in the first
subparagraph shall not mean that all categories of assets must automati-cally be accepted as cover for technical provisions. The home MemberState shall lay down more detailed rules fixing the conditions for theuse of acceptable assets; in this connection, it may require valuablesecurity or guarantees, particularly in the case of debts owed by rein-surers.
Inthedeterminationandtheapplicationoftheruleswhichitlaysdown,
the home Member State shall, in particular, ensure that the followingprinciples are 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 ofprudent amortization;
(iii) loans, whether to undertakings, to State authorities or inter-
nationalorganizations,tolocalorregionalauthoritiesortonaturalpersons,maybeacceptedascoverfortechnicalprovisionsonlyifthere are sufficient guarantees as to their security, whether theseare based on the status of the borrower, mortgages, bank guaran-tees or guarantees granted by insurance undertakings or otherforms of security;
(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;
(1) OJ No L 322, 17. 12. 1977, p. 30. Last amended by Directive 89/
646/EEC (OJ No L 386, 30. 12. 1989, p. 1).
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(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;
(vi) debts owed by and claims against a third party may be accepted
as cover for technical provisions only after deduction of allamounts owed to the same third party;
(vii) the value of any debts and claims accepted as cover for technical
provisions must be calculated on a prudent basis, with due allow-ance for the risk of any amounts not being realizable. In partic-ular, debts owed by policyholders and intermediaries arising outof insurance and reinsurance operations may be accepted only inso far as they have been outstanding for not more than threemonths;
(viii) wheretheassetsheldincludeaninvestmentinasubsidiaryunder-
taking which manages all or part of the insurance undertaking’sinvestments on its behalf, the home Member State must, whenapplying the rules and principles laid down in this Article, takeinto account the underlying assets held by the subsidiary under-taking; the home Member State may treat the assets of othersubsidiaries in the same way;
(ix) deferred acquisition costs may be accepted as cover for technical
provisions only to the extent that that is consistent with thecalculation of the technical provision for unearned premiums.
2. Notwithstanding paragraph 1, in exceptional circumstances and at
an insurance undertaking’s request, the home Member State may,temporarily and under a properly reasoned decision, accept other cate-gories of assets as cover for technical provisions, subject to Article 20.
Article 22
1. As regard the assets covering technical provisions, the home
Member State shall require every insurance undertaking to invest nomore than:
(a) 10 % of its total gross technical provisions in any one piece of land
orbuilding,oranumberofpiecesoflandorbuildingscloseenoughto 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 same under-taking,orinloansgrantedtothesameborrower,takentogether,theloans being loans other than those granted to a State, regional orlocal authority or to an international organization of which one ormoreMemberStatesaremembers.Thislimitmayberaisedto10%if an undertaking does not invest more than 40 % of its grosstechnical provisions in the loans or securities of issuing bodies andborrowers in each of which it invests more than 5 % of its assets;
(c) 5 % of its total gross technical provisions in unsecured loans,
including 1 % for any single unsecured loan, other than loansgranted to credit institutions, assurance undertaking - in so far asArticle8ofDirective73/239/EECallowsit-andinvestmentunder-takings established in a 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 securi-
tiestreatedassharesanddebtsecurities,whicharenotdealtinonaregulated 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 conditionsfor the use of acceptable assets. In particular it shall ensure, in thedetermination and the application of those rules, that the followingprinciples are complied with:
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(i) assets covering technical provisions must be diversified and spread
in such a way as to ensure that there is no excessive reliance onany particular category of asset, investment market or investment;
(ii) investment in particular types of asset which show high levels of
risk,whetherbecauseofthenatureoftheassetorthequalityoftheissuer, must be restricted to prudent levels;
(iii) limitations on particular categories of asset must take account of
the treatment of reinsurance in the calculation of technical provi-sions;
(iv) where the assets held include an investment in a subsidiary under-
taking which manages all or part of the insurance undertaking’sinvestments on its behalf, the home Member State must, whenapplyingtherulesandprincipleslaiddowninthisArticle,takeintoaccount the underlying assets held by the subsidiary undertaking;the home Member State may treat the assets of other subsidiariesin the same way;
(v) the percentage of assets covering technical provisions which are
the subject of non-liquid investments must be kept to a prudentlevel;
(vi) where the assets held include loans to or debt securities issued by
certain credit institutions, the home Member State may, whenapplyingtherulesandprincipleslaiddowninthisArticle,takeintoaccount the underlying assets held by such credit institutions. Thistreatment may be applied only where the credit institution has itshead office in a Member State, is entirely owned by that MemberState and/or that State’s local authorities and its business,according to its memorandum and articles of association, consistsof extending, through its intermediary, loans to or guaranteed bytheStateorlocalauthoritiesorloanstobodiescloselylinkedtotheState 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 limita-tive treatment to:
— anyloanunaccompaniedbyabankguarantee,aguaranteeissuedby
an insurance 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 capitalmarket instru-
ments not issued by States, local or regional authorities or undertak-ings belonging to Zone A as defined in Directive 89/647/EEC(
2),
or the issuers of which are international organizations notnumbering at least one Community Member State among theirmember, as compared with the same financial instruments issued bysuch bodies.
4. MemberStatesmayraisethelimitlaiddowninparagraph1(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 theholders of those debt securities. In particular, sums deriving from theissue of such debt securities must be invested in accordance with thelaw in assets which, during the whole period of validity of the debtsecurities,arecapableofcoveringclaimsattachingtothedebtsecuritiesand which, in the event of failure of the issues, would be used on apriority basis for the reimbursement of the principal and payment of theaccrued interest.
(1) OJ No L 375, 31. 12. 1985, p. 3. Amended by Directive 88/220/EEC (OJ
No L 100, 19. 4. 1988, p. 31).
(2) OJ No L 386, 30. 12. 1989, p. 14.
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5. Member States shall not require insurance undertakings to invest
in particular categories of assets.
6. Notwithstanding paragraph 1, in exceptional circumstances and at
an insurance undertaking’s request, the home Member State may,temporarilyandunderaproperlyreasoneddecision,allowexceptionstothe rules laid down in paragraph 1 (a) to (e), subject to Article 20.
Article 23
Points8and9ofAnnex1toDirective88/357/EECshallbereplacedby
the following:
‘8. Insurance undertakings may hold non-matching assets to cover
an amount not exceeding 20 % of their commitments in aparticular currency.
9. A Member State may provide that when under the preceding
proceduresacommitmentmustbecoveredbyassetsexpressedina Member State’s currency that requirement shall also be consid-ered as satisfied when the assets are expressed in ecus'.
Article 24
Article 16 (1) of Directive 73/239/EEC shall be replaced by the
following:
‘1. The home Member State shall require every insurance under-
taking to establish an adequate solvency margin in respect of itsentire business.
The solvency margin shall correspond to the assets of the under-
takingfreeofanyforeseeableliabilitieslessanyintangibleitems.Inparticular the following shall be included:
— the paid-up share capital or, in the case of a mutual insurance
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 accounts tomembers only insofar as this does not cause the solvencymargin to fall below the required level, or, after the dissolu-tion of the undertaking, if all the undertaking’s other debtshave been settled;
(b) the memorandum and articles of association must stipulate,
withrespecttoanysuchpaymentsforreasonsotherthantheindividual termination of membership, that the competentauthorities must be notified at least one month in advanceand can prohibit the payment within that period and
(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 theamendment, 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 corresponding
to underwriting liabilities,
— any profits brought forward,— in the case of mutual or mutal-type association with variable
contributions, any claim which it has against its members byway of a call for supplementary contribution, within the finan-cialyear,uptoone-halfofthedifferencebetweenthemaximumcontributions and the contributions actually called in, andsubject to a limit of 50 % of the margin,
— attherequestofandontheproductionofproofbytheinsurance
undertaking, any hidden reserves arising out of the undervalu-ation of assets, insofar as those hidden reserves are not of anexceptional nature,
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— 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 of subordi-nated loans with a fixed maturity, or fixed-term cumulativepreferential share capital, if the following minimum criteria aremet:
(a) intheeventofthebankruptcyorliquidationoftheinsurance
undertaking, binding agreements must exist under which thesubordinated loan capital or preferential share capital ranksafter the claims of all other creditors and is not to be repaiduntil all other debts outstanding at the time have beensettled.
Subordinated loan capital must fulfil the following additional
conditions:
(b) only fully paid-up funds may be taken into account;
(c) forloanswithafixedmaturity,theoriginalmaturitymustbe
at least five years. No later than one year before the repay-ment date the insurance undertaking must submit to thecompetent authorities for their approval a plan showing howthe solvency margin will be kept at or brought to therequired level at maturity, unless the extent to which theloan may rank as a component of the solvency margin isgradually reduced during at least the last five years beforethe repayment date. The competent authorities mayauthorize the early repayment of such loans providedapplication is made by the issuing insurance undertakingand its solvency margin will not fall below the requiredlevel;
(d) loans the maturity of which is not fixed must be repayable
only subject to five years’ notice unless the loans are nolonger considered a component of the solvency margin orunless the prior consent of the competent authorities isspecifically required for early repayment. In the latter eventthe insurance undertaking must notify the competent author-ities at least six months before the date of the proposedrepayment, specifying the actual and required solvencymargins both before and after that repayment. Thecompetent authorities shall authorize repayment only if theinsurance undertaking’s solvency margin will not fall belowthe required level;
(e) the loan agreement must not include any clause providing
thatinspecifiedcircumstances,otherthanthewinding-upofthe insurance undertaking, the debt will become repayablebefore the agreed repayment dates;
(f) the loan agreement may be amended only after the
competentauthoritieshavedeclaredthattheyhavenoobjec-tion to the amendment;
— securities with no specified maturity date and other instruments
that fulfil the following conditions, including cumulative prefer-ential shares other than those mentioned in the preceding indent,up to 50 % of the margin for the total of such securities and thesubordinated 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 insurance undertaking
to defer the payment of interest on the loan;
(c) the lender’s claims on the insurance undertaking must rank
entirely after those of all non-subordinated creditors;
(d) the documents governing the issue of the securities must
provide for the loss-absorption capacity of the debt andunpaid interest, while enabling the insurance undertaking tocontinue its business;
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(e) only fully paid-up amounts may be taken into account.'
Article 25
No more than three years after the date of application of this Directive
the Commission shall submit a report to the Insurance Committee onthe need for further harmonization of the solvency margin.
Article 26
Article 18 of Directive 79/239/EEC shall be replaced by the following:
‘Article 18
1. MemberStatesshallnotprescribeanyrulesastothechoiceof
theassetsthatneednotbeusedascoverforthetechnicalprovisionsreferred to in Article 15.2. Subject to Article 15 (2), Article 20(1), (2), (3) and (5) and the last subparagraph of Article 22 (1),Member States shall not restrain the free disposal of those assets,whether movable or immovable, that form part of the assets ofauthorizedinsuranceundertakings.3. Paragraphs1and2shallnotpreclude any measures which Member States, while safeguardingthe interests of the isured persons, are entitled to take as owners ormembers of or partners to the undertakings in question.'
Chapter 3
Article 27
Article 7 (1) (f) of Directive 88/357/EEC shall be replaced by the
following:
‘(f) in the case of the risks referred to in Article 5 (d) of Directive
73/239/EEC, the parties to the contract may choose any law.'
Article 28
The Member State in which a risk is situated shall not prevent a
policyholder from concluding a contract with an insurance undertakingauthorized under the conditions of Article 6 of Directive 73/239/EEC,as long as that does not conflict with legal provisions protecting thegeneral good in the Member State in which the risk is situated.
Article 29
MemberStatesshallnotadoptprovisionsrequiringthepriorapprovalor
systematic notification of general and special policy conditions, scalesof premiums, or forms and other printed documents which an insuranceundertakingintendstouseinitsdealingswithpolicy-holders.Theymayonly require non-systematic notification of those policy conditions andother documents for the purpose of verifying compliance with nationalprovisionsconcerninginsurancecontracts,andthatrequirementmaynotconstitute a prior condition for an undertaking’s carrying on its busi-ness.
Member States may not retain or introduce prior notification or
approval of proposed increases in premium rates except as part ofgeneral price-control systems.
Article 30
1. Article 8 (4) (b) of Directive 88/357/EEC shall be deleted. Article
8(4)(a)ofthatDirectiveshallthereforebeamendedtoreadasfollows:
‘(a) Subjecttosubparagraph(c),thethirdsubparagraphofArticle7
(2) shall apply where the insurance contract provides cover intwo or more Member States, at least one of which makesinsurance compulsory.'
2. Notwithstanding any provision to the contrary, a Member State
which makes insurance compulsory may require that the general and
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special conditions of the compulsory insurance be communicated to its
competent authority before being circulated.
Article 31
1. Before an insurance contract is concluded the insurance under-
taking shall inform the policyholder of:
— the law applicable to the contract where the parties do not have a
free choice, or the fact that the parties are free to choose the lawapplicable and, in the latter case, the law the insurer proposes tochoose,
— the arrangements for handling policyholders’ complaints concerning
contractsincluding,whereappropriate,theexistenceofacomplaintsbody, without prejudice to the policyholders’s right to take legalproceedings.
2. The obligation referred to in paragraph 1 shall apply only where
the policyholder is a natural person.
3. The rules for implementing this Article shall be determined in
accordance with the law of the Member State in which the risk issituated.
TITLEIV
PROVISIONS RELATING TO RIGHT OF ESTABLISHMENT AND THE
FREEDOM TO PROVIDE SERVICES
Article 32
Article 10 of Directive 73/239/EEC shall be replaced by the following:
‘Article 10
1. An insurance 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 MemberStates shall require every insurance undertaking that proposes toestablish a branch within the territory of another Member State toprovide the following information when effecting the notificationprovided 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 thebranch;
(c) the address in the Member State of the branch from which
documents may be obtained and to which they may be deliv-ered, it being understood that that address shall be the one towhich 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 andcourts of the Member State of the branch. With regard toLloyd’s, in the event of any litigation in the Member State ofthebrancharisingoutofunderwrittencommitments,theinsuredpersons must not be treated less favourably than if the litigationhadbeenbroughtagainstbusinessesofaconventionaltype.Theauthorized agent must, therefore, possess sufficient powers forproceedings to be taken against him and must in that capacitybe able to bind the Lloyd’s underwriters concerned.
Where the undertaking intends its branch to cover risks in class 10
of point A of the Annex, not including carrier’s liability, it mustproduce a declaration that it has become a member of the nationalbureau and the national guarantee fund of the Member State of thebranch.3. Unless the competent authorities of the home MemberState have reason to doubt the adequacy of the administrative struc-ture or the financial situation of the insurance undertaking or thegood repute and professional qualifications or experience of thedirectors or managers or the authorized agent, taking into account
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the business planned, they shall within three months of receiving all
the information referred to in paragraph 2 communicate that infor-mation to the competent authorities of the Member State of thebranch and shall inform the undertaking concerned accordingly.
The competent authorities of the home Member State shall also
attest that the insurance undertaking has the minimum solvencymargin calculated in accordance with Articles 16 and 17.
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 shallgive the reasons for their refusal to the undertaking concernedwithin three months of receiving all the information in question.Thatrefusalorfailuretoactmaybesubjecttoarighttoapplytothecourts in the home Member State.4. Before the branch of aninsurance undertaking starts business, the competent authorities ofthe Member State of the branch shall, within two months ofreceiving the information referred to in paragraph 3, inform thecompetent authority of the home Member State, if appropriate, ofthe conditions under which, in the interest of the general good, thatbusiness must be carried on in the Member State of thebranch.5. On receiving a communication from the competentauthorities of the Member State of the branch or, if no communi-cationisreceivedfromthem,onexpiryoftheperiodprovidedforinparagraph 4, the branch may be established and start busi-ness.6. In the event of a change in any of the particulars commu-nicated under paragraph 2 (b), (c) or (d), an insurance undertakingshall give written notice of the change to the competent authoritiesofthehomeMemberStateandoftheMemberStateofthebranchatleast one month before making the change so that the competentauthorities of the home Member State and the competent authoritiesof the Member State of the branch may fulfil their respective rolesunder paragraphs 3 and 4.'
Article 33
Article 11 of Directive 73/239/EEC is hereby repealed.
Article 34
Article 14 of Directive 88/357/EEC shall be replaced by the following:
‘Article 14
Any undertaking that intends to carry on business for the first time
in one or more Member States under the freedom to provideservices shall first inform the competent authorities of the homeMember State, indicating the nature of the risks it proposes tocover.'
Article 35
Article 16 of Directive 88/357/EEC shall be replaced by the following:
‘Article 16
1. Within one month of the notification provided for in Article
14, the competent authorities of the home Member State shallcommunicate to the Member State or Member States within theterritories of which an undertaking intends to carry on businessunder the freedom to provide services:
(a) a certificate attesting that the undertaking has the minimum
solvency margin calculated in accordance with Articles 16 and17 of Directive 73/239/EEC;
(b) the classes of insurance which the undertaking has been author-
ized to offer;
(c) the nature of the risks 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.
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Each Member State within the territory of which an undertaking
intends, under the freedom to provide services, to cover risks inclass 10 of point A of the Annex to Directive 73/239/EEC otherthan carrier’s liability may require that the undertaking:
— communicate the name and address of the representative
referred to in Article 12a (4) of this Directive,
— produce a declaration that the undertaking has become a
member of the national bureau and national guarantee fund ofthe Member State of the provision of services.2. Where the
competent authorities of the home Member State do not communi-catetheinformationreferredtoinparagraph1withintheperiodlaiddown,theyshallgivethereasonsfortheirrefusaltotheundertakingwithin that same period. That refusal shall be subject to a right toapplytothecourtsinthehomeMemberState.3. Theundertakingmay start business on the certified date on which it is informed ofthe communication provided for in the first subparagraph of para-graph 1.'
Article 36
Article 17 of Directive 88/357/EEC shall be replaced by the following:
‘Article 17
Any change which an undertaking intends in make to the informa-
tion referred to in Article 14 shall be subject to the procedureprovided for in Articles 14 and 16.'
Article 37
Article 12 (2), second and third subparagraphs, Article 12 (3) and
Articles 13 and 15 of Directive 88/357/EEC are hereby repealed.
Article 38
The competent authorities of the Member State of the branch or the
MemberStateoftheprovisionofservicesmayrequirethattheinforma-tion which they are authorized under this Directive to request withregard to the business of insurance undertakings operating in the terri-tory of that State shall be supplied to them in the official language orlanguages of that State.
Article 39
1. Article 18 of Directive 88/357/EEC is hereby repealed.2. The Member State of the branch or of the provision of services
shall not adopt provisions requiring the prior approval or systematicnotification of general and special policy conditions, scales ofpremiums, or forms and other printed documents which an undertakingintends to use in its dealings with policyholders. It may only require anundertaking that proposes to carry on insurance business within itsterritory, under the right of establishment or the freedom to provideservices, to effect non-systematic notification ot those policy conditionsand other documents for the purpose of verifying compliance with itsnationalprovisionsconcerninginsurancecontracts,andthatrequirementmay not constitute a prior condition for an undertaking’s carrying on itsbusiness.
3. The Member State of the branch or of the provision of services
may not retain or introduce prior notification or approval of proposedincreases in premium rates except as part of general price-controlsystems.
Article 40
1. Article 19 of Directive 88/357/EEC is hereby repealed.2. Any undertaking carrying on business under the right of establish-
ment or the freedom to provide services shall submit to the competentauthorities of the Member State of the branch and/or of the MemberState of the provision of services all documents requested of it for the
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purposes of this Article in so far as undertakings with head offices 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 within its territory is not complying with the legalprovisions applicable to it in that State, they shall require the under-taking 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 informthe competent authorities of the home Member State accordingly. Thelatter authorities shall, at the earliest opportunity, take all appropriatemeasures to ensure that the undertaking concerned remedies that irreg-ular situation. The nature of those measures shall be communicated tothe 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,the undertaking persists in infringing the legal provisions in force in theMember State concerned, the latter may, after informing the competentauthorities of the home Member State, take appropriate measures toprevent or penalize further infringements, including, in so far as isstrictly necessary, preventing that undertaking from continuing toconclude new insurance contracts within its territory. Member Statesshall ensure that within their territories it is possible to serve the legaldocuments necessary for such measures on insurance undertakings.
6. Paragraphs 3, 4 and 5 shall not affect the emergency power of the
MemberStatesconcernedtotakeappropriatemeasurestopreventirreg-ularities within their territories. This shall include the possibility ofpreventing insurance undertakings from continuing to conclude newinsurance contracts within their territories.
7. Paragraphs 3, 4 and 5 shall not affect the powers of the Member
States to penalize infringements within their territories.
8. If an undertaking which has committed an infringement has an
establishment or possesses property in the Member State concerned, thecompetentauthoritiesofthelattermay,inaccordancewithnationallaw,apply the administrative penalties prescribed for that infringement byway of enforcement against that establishment or property.
9. Any measure adopted under paragraphs 4 to 8 involving penalties
or restrictions on the conduct of insurance business must be properlyreasoned and communicated to the undertaking concerned.
10. Every two years, the Commission shall submit to the Insurance
Committee set up by Directive 91/675/EEC a report summarizing thenumber and types of cases in which, in each Member State, authoriza-tion has been refused under Article 10 of Directive 73/239/EEC orArticle 16 of Directive 88/357/EEC as amended by this Directive ormeasures have been taken under paragraph 5. Member States shallcooperate with the Commission by providing it with the informationrequired for that report.
Article 41
NothinginthisDirectiveshallpreventinsuranceundertakingswithhead
offices in Member States from advertising their services, through allavailable means of communication, in the Member State of the branchor the 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 20 of Directive 88/357/EEC is hereby repealed.2. In the event of an insurance undertaking’s being wound up,
commitments arising out of contracts underwritten through a branch orunder the freedom to provide services shall be met in the same way asthosearisingoutofthatundertaking’sotherinsurancecontracts,without
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distinction as to nationality as far as the persons insured and the
beneficiaries are concerned.
Article 43
1. Article 21 of Directive 88/357/EEC is hereby repealed.2. Where insurance is offered unter the right of establishment or the
freedom to provide services, the policyholder shall, before any commit-ment is entered into, be informed of the Member State in which thehead office or, where appropriate, the branch with which the contract isto be concluded is situated.
Any documents issued to the policyholder must convey the information
referred to in the first subparagraph.
The obligations imposed in the first two subparagraphs shall not apply
to the risks referred to in Article 5 (d) of Directive 73/239/EEC.
3. The contract or any other document granting cover, together with
the insurance proposal where it is binding upon the policyholder, muststatetheaddressoftheheadoffice,or,whereappropriate,ofthebranchof the insurance undertaking which grants the cover.
Each Member State may require that the name and address of the
representative of the insurance undertaking referred to in Article 12 a(4)ofDirective88/357/EECalsoappearinthedocumentsreferredtointhe first subparagraph.
Article 44
1. Article 22 of Directive 88/357/EEC is hereby repealed.2. Every insurance 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 thefreedomtoprovideservices,oftheamountofthepremiums,claimsandcommissions, without deduction of reinsurance, by Member State andby group of classes, and also as regards class 10 of point A of theAnnex to Directive 73/239/EEC, not including carrier’s liability, thefrequency and average cost of claims.
The groups of classes are hereby defined as follows:
— accident and sickness (classes 1 and 2),
— motor (classes 3, 7 and 10, the figures for class 10, excluding
carriers’ liability, being given separately),
— fire and other damage to property (classes 8 and 9),— aviation, marine and transport (classes 4, 5, 6, 7, 11 and 12),— general liability (class 13),— credit and suretyship (classes 14 and 15),— other classes (classes 16, 17 and 18).
The competent authority of the home Member State shall forward that
information within a reasonable time and in aggregate form to thecompetentauthoritiesofeachoftheMemberStatesconcernedwhichsorequest.
Article 45
1. Article 24 of Directive 88/357/EEC is hereby repealed.2. Nothing in this Directive shall affect the Member States’ right to
require undertakings carrying on business within their territories underthe right of establishment or the freedom to provide services to join andparticipate, on the same terms as undertakings authorized there, in anyscheme designed to guarantee the payment of insurance claims toinsured persons and injured third parties.
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Article 46
1. Article 25 of Directive 88/357/EEC is hereby repealed.2. Without prejudice to any subsequent harmonization, every insur-
ance contract shall be subject exclusively to the indirect taxes andparafiscalchargesoninsurancepremiumsintheMemberStateinwhichthe risk is situated as defined in Article 2 (d) of Directive 88/357/EEC,and also, in the case of Spain, to the surcharges legally established infavour of the Spanish ‘Consorcio de Compensación de Seguros'for theperformance of its functions relating to the compensation of lossesarising from extraordinary events occurring in that Member State.
In derogation from the first indent of Article 2 (d) of Directive 88/
357/EEC, and for the purposes of this paragraph, moveable propertycontained in a building situated within the territory of a Member State,except for goods in commercial transit, shall be a risk situated in thatMember State, even if the building and its contents are not covered bythe same insurance policy.
The law applicable to the contract under Article 7 of Directive 88/
357/EEC shall not affect the fiscal arrangements applicable.
Pending future harmonization, each Member State shall apply to those
undertakings which cover risks situated within its territory its ownnational provisions to ensure the collection of indirect taxes and paraf-iscal charges due under the first subparagraph.
TITLEV
TRANSITIONAL PROVISIONS
Article 47
The Federal Republic of Germany may postpone until 1 January 1996
the application of the first sentence of the second subparagraph ofArticle 54 (2). During that period, the provisions of the followingsubparagraph shall apply in the situation referred to in Article 54 (2).
When the technical basis for the calculation of premiums has been
communicated to the competent authorities of the home Member Statein accordance with the third sentence of the second subparagraph ofArticle 54 (2), those authorities shall without delay forward that infor-mation to the competent authorities of the Member State in which therisk is situated so that they may comment. If the competent authoritiesof the home Member State take no account of those comments, theyshallinformthecompetentauthoritiesoftheMemberStateinwhichtherisk is situated accordingly in detail and state their reasons.
Article 48
Member States may allow insurance undertakings with head offices in
their territories, the buildings and land of which that cover their tech-nical provisions exceed, at the time of the notification of this Directive,thepercentagelaiddowninArticle22(1)(a),aperiodexpiringnolaterthan 31 December 1998 within which to comply with that provision.
Article 49
The Kingdom of Denmark may postpone until 1 January 1999 the
application of this Directive to compulsory insurance against accidentsat work. During that period the exclusion provided for in Article 12 (2)of Directive 88/357/EEC for accidents at work shall continue to applyin the Kingdom of Denmark.
Article 50
Spain, until 31 December 1996, and Greece and Portugal, until 31
December 1998, may operate the following transitional arrangementsforcontractscoveringriskssituatedexclusivelyinoneofthoseMemberStates other than those defined in Article 5 (d) of Directive 73/239/EEC:
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(a) in derogation from Article 8 (3) of Directive 73/239/EEC and from
Articles29and39ofthisDirective,thecompetentauthoritiesoftheMember States in question may require the communication, beforeuse, of general and special insurance policy conditions;
(b) the amount of the technical provisions relating to the contracts
referred to in this Article shall be determined under the supervisionof the Member State concerned in accordance with its own rules or,failingthat,inaccordancewiththeproceduresestablishedwithinitsterritory in accordance with this Directive. Cover of those technicalprovisionsbyequivalentandmatchingassetsandthelocalizationofthose assets shall be effected under the supervision of that MemberState in accordance with its rules and practices adopted in accord-ance with this Directive.
TITLEVI
FINAL PROVISIONS
Article 51
The following technical adjustments to be made to Directives 73/
239/EEC and 88/357/EEC and to this Directive shall be adopted 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 73/239/EEC,
— amendments to the list set out in the Annex to Directive 73/
239/EEC, or adaptation of the terminology used in that list to takeaccount of the development of insurance markets,
— clarification of the items constituting the solvency margin listed in
Article 16 (1) of Directive 73/239/EEC to take account of thecreation of new financial instruments,
— alteration of the minimum guarantee fund provided for in Article 17
(2) of Directive 73/239/EEC to take account of economic and finan-cial developments,
— amendments, to take account of the creation of new financial instru-
ments, to the list of assets acceptable as cover for technical provi-sions set out in Article 21 of this Directive and to the rules on thespreading of investments laid down in Article 22,
— changes in the relaxations in the matching rules laid down in Annex
1 to Directive 88/357/EEC, to take account of the development ofnew currency-hedging instruments or progress made towardseconomic and monetary union,
— clarificationofthedefinitionsinordertoensureuniformapplication
of Directives 73/239/EEC and 88/357/EEC and of this Directivethroughout the Community.
Article 52
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 to have been subject to the procedure laiddown in Article 10 (1) to (5) of Directive 73/239/EEC. They shall begoverned, from the date of that entry into force, by Articles 15, 19, 20and 22 of Directive 73/239/EEC and by Article 40 of this Directive.
2. Articles 34 and 35 shall not affect rights acquired by insurance
undertakingscarryingonbusinessunderthefreedomtoprovideservicesbefore the entry into force of the provisions adopted in implementationof this Directive.
Article 53
The following Article shall be inserted in Directive 73/239/EEC:
‘Article 28a
1. Under the conditions laid down by national law, each Member
Stateshallauthorizeagenciesandbranchessetupwithinitsterritoryand covered by this Title to transfer all or part of their portfolios of
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contracts to an accepting office established in the same Member
State if the competent authorities of that Member State or, if appro-priate,oftheMemberStatereferredtoinArticle26certifythataftertaking the transfer into account the accepting office possesses thenecessary solvency margin.2. Under the conditions laid down bynational law, each Member State shall authorize agencies andbranches set up within its territory and covered by this Title totransfer all or part of their portfolios of contracts to an insuranceundertaking with a head office in another Member State if thecompetent authorities of that Member State certify that after takingthe transfer into account the accepting office possesses the neces-sary solvency margin.3. If under the conditions laid down bynational law a Member State authorizes agencies and branches setupwithinitsterritoryandcoveredbythisTitletotransferallorpartof their portfolios of contracts to an agency or branch covered bythis Title and set up within the territory of another Member State itshall ensure that the competent authorities of the Member State ofthe accepting office or, if appropriate, of the Member State referredto in Article 26 certify that after taking the transfer into account theaccepting office possesses the necessary solvency margin, that thelaw of the Member State of the accepting office permits such atransfer and that that State has agreed to the transfer.4. In thecircumstancesreferredtoinparagraphs1,2and3theMemberStateinwhichthetransferringagencyorbranchissituatedshallauthorizethe transfer after obtaining the agreement of the competent authori-ties of the Member State in which the risks are situated, wheredifferentfromtheMemberStateinwhichthetransferringagencyorbranch is situated.5. The competent authorities of the MemberStatesconsultedshallgivetheiropinionorconsenttothecompetentauthorities of the home Member State of the transferring insuranceundertaking within three months of receiving a request; the absenceof any response from the authorities consulted within that periodshall be considered equivalent to a favourable opinion or tacitconsent.6. A transfer authorized in accordance with this ArticleshallbepublishedaslaiddownbynationallawintheMemberStatein which the risk is situated. Such transfers shall automatically bevalid against policyholders, insured persons and any other personshaving rights or obligations arising out of the contracts transferred.
This provision shall not affect the Member States’ right to give
policyholders the option of cancelling contracts within a fixedperiod after a transfer.'
Article 54
1. Notwithstanding any provision to the contrary, a Member State in
which contracts covering the risks in class 2 of point A of the Annex toDirective 73/239/EEC may serve as a partial or complete alternative tohealth cover provided by the statutory social security system mayrequire that those contracts comply with the specific legal provisionsadopted by that Member State to protect the general good in that classof insurance, and that the general and special conditions of that insur-ance be communicated to the competent authorities of that MemberState before use.
2. Member States may require that the health insurance system
referred to in paragraph 1 be operated on a technical basis similar tothat of life assurance where:
— the premiums paid are calculated on the basis of sickness tables and
other statistical data relevant to the Member State in which the riskis situated in accordance with the mathematical methods used ininsurance,
— a reserve is set up for increasing age,— the insurer may cancel the contract only within a fixed period
determined by the Member State in which the risk is situated,
— the contract provides that premiums may be increased or payments
reduced, even for current contracts,
— the contract provides that the policyholder may change his existing
contractintoanewcontractcomplyingwithparagraph1,offeredbythe same insurance undertaking or the same branch and taking
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account of his acquired rights. In particular, account must be takenof the reserve for increasing age and a new medical examinationmay be required only for increased cover.
In that event, the competent authorities of the Member State concerned
shall publish the sickness tables and other relevant statistical datareferred to in the first subparagraph and transmit them to the competentauthorities of the home Member State. The premiums must be suffi-cient, on rasonable actuarial assumptions, for undertakings to be able tomeet all their commitments having regard to all aspects of their finan-cial situation. The home Member State shall require that the technicalbasisforthecalculationofpremiumsbecommunicatedtoitscompetentauthorities before the product is circulated. This paragraph shall alsoapply where existing contracts are modified.
Article 55
Member States may require that any insurance undertaking offering, at
its own risk, compulsory insurance against accidents at work withintheirterritoriescomplywiththespecificprovisionsoftheirnationallawconcerning such insurance, except for the provisions concerning finan-cialsupervision,whichshallbetheexclusiveresponsibilityofthehomeMember State.
Article 56
Member States shall ensure that decisions taken in respect of an insur-
ance undertaking under laws, regulations and administrative provisionsadopted in accordance with this Directive may be subject to the right toapply to the courts.
Article 57
1. The Member States shall adopt the laws, regulations and adminis-
trative provisions necessary for their compliance with this Directive notlater than 31 December 1993 and bring them into force no later than 1July 1994. They shall forthwith inform the Commission thereof.
When they adopt such measures the Member States shall include refer-
ences to this Directive or shall make such references when they effectofficial publication. The manner in which such references are to bemade 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 thefield covered by this Directive.
Article 58
This Directive is addressed to the Member States.