1992L0096 — EN — 21.11.1992 — 000.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL DIRECTIVE 92/96/EEC
of 10 November 1992
on the coordination of laws, regulations and administrative provisions relating to direct life
assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance Directive)
(OJ L 360, 9.12.1992, p. 1)
Corrected by:
►C1 Corrigendum, OJ L 311, 14.11.1997, p. 34 (92/96)
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COUNCIL DIRECTIVE 92/96/EEC
of 10 November 1992
on the coordination of laws, regulations and administrative provi-
sions relating to direct life assurance and amending Directives 79/
267/EEC and 90/619/EEC (third life assurance Directive)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European EconomicCommunity, and in particular Articles 57 (2) and 66 thereof,
Having regard to the proposal from the Commission (
1),
In cooperation with the European Parliament (2),
Having regard to the opinion of the Economic and Social Committee (3),
1. Whereas it is necessary to complete the internal market in direct
life assurance, from the point of view both of the right of estab-lishment and of the freedom to provide services, to make it easierfor assurance undertakings with head offices in the Communityto cover commitments situated within the Community;
2. Whereas the Second Council Directive 90/619/EEC of 8November 1990 on the coordination of laws, regulations andadministrative provisions relating to direct life assurance, layingdown provisions to facilitate the effective exercise of freedom toprovide services and amending Directive 79/267/EEC (
4) has
already contributed substantially to the achievement of theinternal market in direct life assurance by granting policy-holderswho, by virtue of the fact that they take the initiative in enteringinto a commitment with an assurance undertaking in anotherMember State, do not require special protection in the MemberState of the commitment complete freedom to avail themselves ofthe widest possible life assurance market;
3. Whereas Directive 90/619/EEC therefore represents an importantstage in the merging of national markets into an integratedmarket and that stage must be supplemented by other Communityinstruments with a view to enabling all policy-holders, irrespec-tive of whether they themselves take the initiative, to haverecourse to any assurer with a head office in the Community whocarries on business there, under the right of establishment or thefreedom to provide services, while guaranteeing them adequateprotection;
4. Whereas this Directive forms part of the body of Communitylegislation already enacted which includes the First CouncilDirective 79/267/EEC of 5 March 1979 on the coordination oflaws, regulations and administrative provisions relating to thetaking up and pursuit of the business of direct life assurance (
5)
and Council Directive 91/674/EEC of 19 December 1991 on theannual accounts and consolidated accounts of insurance undertak-ings (
6);
5. Whereas the approach adopted consists in bringing about suchharmonization as is essential, necessary and sufficient to achievethe mutual recognition of authorizations and prudential controlsystems, thereby making it possible to grant a single authoriza-
(1) OJ No C 99, 16. 4. 1991, p. 2.
(2) OJ No C 176, 13. 7. 1992, p. 93; and Decision of 28 October 1992 (not
yet published in the Official Journal).
(3) OJ No C 14, 20. 1. 1992, p. 11.
(4) OJ No L 330, 29. 11. 1990, p. 50.
(5) OJ No L 63, 13. 3. 1979, p. 1. Directive as last amended by the Second
Directive 90/619/EEC (OJ No L 330, 29. 11. 1990, p. 50).
(6) OJ No L 374, 31. 12. 1991, p. 7.
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▼B
tion valid throughout the Community and apply the principle of
supervision by the home Member State;
6. Whereas, as a result, the taking up and the pursuit of the businessof assurance are henceforth to be subject to the grant of a singleofficial authorization issued by the competent authorities of theMember State in which an assurance 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 assurance undertakings which wish to carry onassurance business there and which have already been authorizedin their home Member State to seek fresh authorization; whereasDirectives 79/267/EEC and 90/619/EEC should therefore beamended along those lines;
7. Whereas the competent authorities of home Member States willhenceforth be responsible for monitoring the financial health ofassurance undertakings, including their state of solvency, theestablishment of adequate technical provisions and the coveringof those provisions by matching assets;
8. Whereas the performance of the operations referred to in Article1 (2) (c) of Directive 79/267/EEC cannot under any circum-stances affect the powers conferred on the respective authoritieswith regard to the entities holding the assets with which thatprovision is concerned;
9. Whereas certain provisions of this Directive define minimumstandards; whereas a home Member State may lay down stricterrules for assurance undertakings authorized by its own competentauthorities;
10. Whereas the competent authorities of the Member States musthave at their disposal such means of supervision as are necessaryto ensure the orderly pursuit of business by assurance 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 assurance supervision;
11. Whereas the provisions on transfers of portfolios must be adaptedto bring them into line with the single legal authorization systemintroduced by this Directive;
12. Whereas provision should be made for the specialization rule laiddown by Directive 79/267/EEC to be relaxed so that thoseMember States which so wish are able to grant the same under-taking authorizations for the classes referred to in the Annex toDirective 79/267/EEC and the insurance business coming underclasses 1 and 2 in the Annex to Directive 73/239/EEC (
1);
whereas that possibility may, however, be subject to certainconditions as regards compliance with accounting rules and ruleson winding-up;
13. Whereas it is necessary from the point of view of the protectionof lives assured that every assurance undertaking should establishadequate technical provisions; whereas the calculation of suchprovisions is based for the most part on actuarial principles;whereas those principles should be coordinated in order to facili-tate mutual recognition of the prudential rules applicable in thevarious Member States;
(1) First Council Directive 73/239/EEC of 24 July 1973 on the coordination
of laws, regulations and administrative provisions relating to the taking-upand pursuit of the business of direct insurance other than life assurance(OJ No L 228, 16. 8. 1973, p. 3). Directive as last amended by Directive90/618/EEC (OJ No L 330, 29. 11. 1990, p. 44).
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14. Whereas it is desirable, in the interests of prudence, to establish a
minimum of coordination of rules limiting the rate of interestused in calculating the technical provisions; whereas, for thepurposes of such limitation, since existing methods are all equallycorrect, prudential and equivalent, it seems appropriate to leaveMember States a free choice as to the method to be used;
15. Whereas the rules governing the spread, localization andmatching of the assets used to cover technical provisions 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 Council Directive 88/361/EEC of 24 June1988 for the implementation of Article 67 of the Treaty (
1) and
the progress made by the Community towards economic andmonetary union;
16. Whereas, however, the home Member State may not requireassurance undertakings 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;
17. Whereas, pending the adoption of a directive on investmentservices harmonizing inter alia the definition of the concept of a
regulated market, for the purposes of this Directive and withoutprejudice to such future harmonization that concept must bedefined provisionally, to be replaced by the definition harmon-ized at Community level, which will give the home MemberState of the market the responsibilities for these matters whichthis Directive transitionally gives to the assurance undertaking’shome Member State;
18. Whereas the list of items of which the solvency margin requiredby Directive 79/267/EEC may be made up must be supplementedto take account of new financial instruments and of the facilitiesgranted to other financial institutions for the constitution of theirown funds;
19. Whereas the harmonization of assurance contract law is not aprior condition for the achievement of the internal market inassurance; whereas, therefore, the oppportunity afforded to theMember States of imposing the application of their law to assur-ance contracts covering commitments within their territories islikely to provide adequate safeguards for policy-holders;
20. Whereas within the framework of an internal market it is in thepolicy-holder’s interest that he should have access to the widestpossible range of assurance products available in the Communityso that he can choose that which is best suited to his needs;whereas it is for the Member State of the commitment to ensurethat there is nothing to prevent the marketing within its territoryof all the assurance products offered for sale in the Communityas long as they do not conflict with the legal provisionsprotecting the general good in force in the Member State of thecommitment and in so far as the general good is not safeguardedby the rules of the home Member State, provided that suchprovisions must be applied without discrimination to all under-takings operating in that Member State and be objectively neces-sary and in proportion to the objective pursued;
21. Whereas the Member States must be able to ensure that theassurance products and contract documents used, under the rightof establishment or the freedom to provide services, to covercommitments within their territories comply with such specificlegal provisions protecting the general good as are applicable;whereas the systems of supervision to be employed must meet
(1) OJ No L 178, 8. 7. 1988, p. 5.
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the requirements of an internal market but their employment may
not constitute a prior condition for carrying on assurance busi-ness; 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 policy-holders adequateprotection;
22. Whereas, for the purposes of implementing actuarial principles inconformity with this Directive, the home Member State maynevertheless require systematic notification of the technical basesused for calculating scales of premiums and technical provisions,with such notification of technical bases excluding notification ofthe general and special policy conditions and the undertaking’scommercial rates;
23. Whereas in a single assurance market the consumer will have awider and more varied choice of contracts; whereas, if he is toprofit fully from this diversity and from increased competition, hemust be provided with whatever information is necessary toenable him to choose the contract best suited to his needs;whereas this information requirement is all the more important asthe duration of commitments can be very long; whereas theminimum provisions must therefore be coordinated in order forthe consumer to receive clear and accurate information on theessential characteristics of the products proposed to him as wellas the particulars of the bodies to which any complaints ofpolicy-holders, assured persons or beneficiaries of contracts maybe addressed;
24. Whereas publicity for assurance products is an essential means ofenabling assurance business to be carried on effectively withinthe Community; whereas it is necessary to leave open to assur-ance undertakings the use of all normal means of advertising inthe Member State of the branch or of provision of services;whereas Member States may nevertheless require compliancewith their national rules on the form and content of advertising,whether laid down pursuant to Community legislation on advert-ising or adopted by Member States for reasons of the generalgood;
25. Whereas, within the framework of the internal market, noMember State may continue to prohibit the simultaneous carryingon of assurance business within its territory under the right ofestablishment and the freedom to provide services; whereas theoption granted to Member States in this connection by Directive90/619/EEC should therefore be abolished;
26. Whereas provision should be made for a system of penalties to beimposed when, in the Member State in which the commitment isentered into, an assurance undertaking does not comply withthose provisions protecting the general good that are applicable toit;
27. Whereas some Member States do not subject assurance transac-tions to any form of indirect taxation, while the majority applyspecial taxes and other forms of contribution; 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 assurance services between Member States;whereas, pending subsequent harmonization, application of thetax systems and other forms of contribution provided for by theMember States in which commitments entered into are likely toremedy that problem and it is for the Member States to makearrangements to ensure that such taxes and contributions arecollected;
28. Whereas it is important to introduce Community coordination onthe winding-up of assurance undertakings; whereas it is hence-forth essential to provide, in the event of the winding-up of anassurance undertaking, that the system of protection in place in
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each Member State must guarantee equality of treatment for all
assurance creditors, irrespective of nationality and of the methodof entering into the commitment;
29. Whereas technical adjustments to the detailed rules laid down inthis Directive may be necessary from time to time to take accountof the future development of the assurance 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;
30. Whereas it is necessary to adopt specific provisions intended toensure smooth transition from the legal arrangements in existencewhen this Directive becomes applicable to those that it intro-duces; whereas care should be taken in such provisions not toplace an additional workload on Member States’ competentauthorities;
31. Whereas, pursuant to Article 8c of the Treaty, account should betaken of the extent of the effort which must be made by certaineconomies at different stages of development; whereas, therefore,transitional arrangements should be adopted for the gradualapplication of this Directive by certain Member States,
HAS ADOPTED THIS DIRECTIVE:
TITLE I
DEFINITIONS AND SCOPE
Article 1
For the purposes of this Directive:
(a)assurance undertaking shall mean an undertaking which has
received official authorization in accordance with Article 6 ofDirective 79/267/EEC;
(b)branch shall mean an agency or branch of an assurance under-
taking, having regard to Article 3 of Directive 90/619/EEC;
(c)commitment shall mean a commitment represented by one of the
kinds of insurance or operations referred to in Article 1 of Directive79/267/EEC;
(d)home Member State shall mean the Member State in which the head
office of the assurance undertaking covering the commitment issituated;
(e)Member State of the branch shall mean the Member State in which
the branch covering the commitment is situated;
(f)Member State of the provision of services shall mean the Member
State of the commitment, as defined in Article 2 (e) of Directive90/619/EEC, if the commitment is covered by an assurance under-taking or a branch situated in another Member State;
(g)control shall mean the relationship between a parent undertaking
and a subsidiary, as defined in Article 1 of Directive 83/349/EEC (
2), or a similar relationship between any natural or legal
person and an undertaking;
(h)qualifying holding shall mean a direct or indirect holding in an
undertaking which represents 10 % or more of the capital or of thevoting rights or which makes it possible to exercise a significant
(1) OJ No L 374, 31. 12. 1991, p. 32.
(2) Seventh Council Directive 83/349/EEC of 13 June 1983 based on Article
54 (3) (g) of the Treaty on consolidated accounts (OJ No L 193, 18. 7.1983, p. 1). Directive as last amended by Directive 90/605/EEC (OJ No L317, 16. 11. 1990, p. 60).
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influence over the management of the undertaking in which a
holding subsists.
For the purposes of this definition, in the context of Articles 7 and
14 and of the other levels of holding referred to in Article 14, thevoting rights referred to in Article 7 of Directive 88/627/EEC (
1)
shall be taken into consideration;
(i)parent undertaking shall mean a parent undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC;
(j)subsidiary shall mean a subsidiary undertaking as defined in
Articles 1 and 2 of Directive 83/349/EEC; any subsidiary of asubsidiary undertaking shall also be regarded as a subsidiary of theundertaking which is those undertakings’ ultimate parent under-taking;
(k)regulated market shall mean a financial market regarded by an
undertaking’s home Member State as a regulated market 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 CouncilDirective 79/279/EEC of 5 March 1979 coordinating the condi-tions for the admission of securities to official stock-exchangelisting (
2) 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 besituated in a Member State or in a third country. In the latterevent, the market must be recognized by the undertaking’s homeMember State and meet comparable requirements. Any financialinstruments dealt in must be of a quality comparable to that ofthe instruments dealt in on the regulated market or markets of theMember State in question;
(l)competent authorities shall mean the national authorities which are
empowered by law or regulation to supervise assurance undertak-ings.
Article 2
1. This Directive shall apply to the commitments and undertakings
referred to in Article 1 of Directive 79/267/EEC.
2. In Article 1 (2) of Directive 79/267/EEC the words ‘and are
authorized in the country concerned' shall be deleted.
3. This Directive shall apply neither to classes of insurance or opera-
tions nor to undertakings or institutions to which Directive 79/267/EECdoes not apply, nor shall it apply to the bodies referred to in Article 4 ofthat Directive.
(1) Council Directive 88/627/EEC of 12 December 1988 on the information to
be published when a major holding in a listed company is acquired ordisposed of (OJ No L 348, 17. 12. 1988, p. 62).
(
2) OJ No L 66, 13. 3. 1979, p. 21. Directive as last amended by Directive
82/148/EEC (OJ No L 62, 5. 3. 1982, p. 22).
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TITLE II
THE TAKING-UP OF THE BUSINESS OF LIFE ASSURANCE
Article 3
Article 6 of Directive 79/267/EEC shall be replaced by the following:
‘Article 6The taking-up of the activities covered by this Directive shall be
subject to prior official authorization.
Such authorization shall be sought from the authorities of the home
Member State by:
(a) any undertaking which establishes its head office in the territory
of that State;
(b) any undertaking which, having received the authorization
required in the first subparagraph, extends its business to anentire class or to other classes.'
Article 4
Article 7 of Directive 79/267/EEC shall be replaced by the following:
‘Article 71. Authorization shall be valid for the entire Community. It shall
permit an undertaking to carry on business there, under either theright of establishment or freedom to provide services.
2. Authorization shall be granted for a particular class of assur-
ance as listed in the Annex. It shall cover the entire class, unless theapplicant wishes to cover only some of the risks pertaining to thatclass.
The competent authorities may restrict authorization requested for
one of the classes to the operations set out in the scheme of opera-tions referred to in Article 9.
Each Member State may grant authorization for two or more of the
classes, where its national laws permit such classes to be carried onsimultaneously.'
Article 5
Article 8 of Directive 79/267/EEC shall be replaced by the following:
‘Article 81. The home Member State shall require every assurance 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”, “associa-tion d’assurance mutuelle/onderlinge verzekeringsvere-niging”, “société coopérative/coöperatieve vennootschap”,
— in the case of the Kingdom of Denmark: “aktieselskaber”,
“gensidige selskaber”, “pensionskasser omfattet af lov omforsikringsvirksomhed (tværgående pensionskasser)”,
— in the case of the Federal Republic of Germany: “Aktienge-
sellschaft”, “Versicherungsverein auf Gegenseitigkeit”,“öffentlich-rechtliches Wettbewerbsversicherungsunter-nehmen”,
— in the case of the French Republic: “société anonyme”,
“société d’assurance mutuelle”, “institution de prévoyancerégie par le code de la sécurité sociale”, “institution deprévoyance régie par le code rural” and “mutuelles régies parle code de la mutualité”,
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— in the case of Ireland: incorporated companies limited by
shares or by guarantee or unlimited, societies registeredunder the Industrial and Provident Societies Acts and socie-ties registered under the Friendly Societies Acts,
— in the case of the Italian Republic: “societá per azioni”,
“societá cooperativa”, “mutua di assicurazione”,
— in the case of the Grand Duchy of Luxembourg: “société
anonyme”, “société en commandite par actions”, “associationd’assurances mutuelles”, “société coopérative”,
— in the case of the Kingdom of the Netherlands: “naamloze
vennootschap”, “onderlinge waarborgmaatschappij”,
— in the case of the United Kingdom: incorporated companies
limited by shares or by guarantee or unlimited, societiesregistered under the Industrial and Provident Societies Acts,societies registered or incorporated under the Friendly Socie-ties Acts, the association of underwriters known as Lloyd’s,
— in the case of the Hellenic Republic: “ ανώνυµη εταιρία ”,
— in the case of the Kingdom of Spain: “sociedad anonima”,
“sociedad mutua”, “sociedad cooperativa”,
— in the case of the Portuguese Republic: “sociedade anónima”,
“mútua de seguros”.
An assurance undertaking may also adopt the form of a European
company when that has been established.
Furthermore, Member States may, where appropriate, set up under-
takings in any public-law form provided that such bodies have astheir object insurance operations under conditions equivalent tothose under which private-law undertakings operate;
(b) limit its objects to the business provided for in this Directive and
operations directly arising therefrom, to the exclusion of allother commercial business;
(c) submit a scheme of operations in accordance with Article 9;
(d) possess the minimum guarantee fund provided for in Article 20
(2);
(e) be effectively run by persons of good repute with appropriate
professional qualifications or experience.
2. An undertaking seeking authorization to extend its business to
other classes or to extend an authorization covering only some of therisks pertaining to one class shall be required to submit a scheme ofoperations in accordance with Article 9.
It shall, furthermore, be required to show proof that it possesses the
solvency margin provided for in Article 19 and the guarantee fundreferred to in Article 20 (1) and (2).
3. Member States shall not adopt provisions requiring the prior
approval or systematic notification of general and special policyconditions, of scales of premiums, of the technical bases, used inparticular for calculating scales of premiums and technical provi-sions or of forms and other printed documents which an assuranceundertaking intends to use in its dealings with policy-holders.
Notwithstanding the first subparagraph, for the sole purpose of veri-
fying compliance with national provisions concerning actuarial prin-ciples, the home Member State may require systematic notificationof the technical bases used for calculating scales of premiums andtechnical provisions, without that requirement constituting a priorcondition for an undertaking to carry on its business.
Nothing in this Directive shall prevent Member States from main-
taining in force or introducing laws, regulations or administrativeprovisions requiring approval of the memorandum and articles ofassociation and the communication of any other documents neces-sary for the normal exercise of supervision.
Not later than five years after the date of entry into force of
Directive 92/96/EEC (*), the Commission shall submit a report tothe Council on the implementation of this paragraph.
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4. The abovementioned provisions may not require that any
application for authorization be considered in the light of theeconomic requirements of the market.
(*) OJ No L 360, 9. 12. 1992, p. 1.'
Article 6
Article 9 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 9The scheme of operations referred to in Article 8 (1) (c) and (2)
shall include particulars or proof concerning:
(a) the nature of the commitments which the undertaking
proposes to cover;
(b) the guiding principles as to reassurance;
(c) the items constituting the minimum guarantee fund;
(d) estimates relating to the costs of setting up the administrative
services and the organization for securing business and thefinancial resources intended to meet those costs;
in addition, for the first three financial years:
(e) a plan setting out detailed estimates of income and expendi-
ture in respect of direct business, reassurance acceptances andreassurance cessions;
(f) a forecast balance sheet;
(g) estimates relating to the financial resources intended to cover
underwriting liabilities and the solvency margin.'
Article 7
The competent authorities of the home Member State shall not grant
an undertaking authorization to take up the business of assurancebefore they have been informed of the identities of the shareholdersor members, direct or indirect, whether natural or legal persons, whohave qualifying holdings in that undertaking and of the amounts ofthose holdings.
The same authorities shall refuse authorization if, taking into account
the need to ensure the sound and prudent management of an assur-ance undertaking, they are not satisfied as to the qualifications of theshareholders or members.
TITLE III
HARMONIZATION OF CONDITIONS GOVERNING PURSUIT OF
BUSINESS
Chapter 1
Article 8
Article 15 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 151. The financial supervision of an assurance undertaking,
including that of the business it carries on either through branchesor under the freedom to provide services, shall be the soleresponsibility of the home Member State. If the competent author-ities of the Member State of the commitment have reason toconsider that the activities of an assurance undertaking mightaffect its financial soundness, they shall inform the competentauthorities of the undertaking’s home Member State. The latter
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authorities shall determine whether the undertaking is complying
with the prudential principles laid down in this Directive.
2. That financial supervision shall include verification, with
respect to the assurance undertaking’s entire business, of its stateof solvency, the establishment of technical provisions, includingmathematical provisions, and of the assets covering them, inaccordance with the rules laid down or practices followed in thehome Member State pursuant to the provisions adopted atCommunity level.
3. The competent authorities of the home Member State shall
require every assurance undertaking to have sound administrativeand accounting procedures and adequate internal control mecha-nisms.'
Article 9
Article 16 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 16The Member State of the branch shall provide that, where an
assurance undertaking authorized in another Member State carrieson business through a branch, the competent authorities of thehome Member State may, after having first informed thecompetent authorities of the Member State of the branch, carryout themselves, or through the intermediary of persons theyappoint for that purpose, on-the-spot verification of the informa-tion necessary to ensure the financial supervision of the under-taking. The authorities of the Member State of the branch mayparticipate in that verification' .
Article 10
Article 23 (2) and (3) of Directive 79/267/EEC shall be replaced by
the following:
‘2. Member States shall require assurance undertakings with
head offices within their territories to render periodically thereturns, together with statistical documents, which are necessaryfor the purposes of supervision. The competent authorities shallprovide each other with any documents and information that areuseful for the purposes of supervision.
3. Every Member State shall take all steps necessary to ensure
that the competent authorities have the powers and means neces-sary for the supervision of the business of assurance undertakingswith head offices within their territories, including businesscarried on outside those territories, in accordance with the Councildirectives governing those activities and for the purpose of seeingthat they are implemented.
These powers and means must, in particular, enable the competent
authorities to:
(a) make detailed enquiries regarding the undertaking’s situation
and the whole of its business, inter alia by:
— gathering information or requiring the submission of docu-
ments concerning its assurance business,
— carrying out on-the-spot investigations at the undertaking’s
premises;
(b) take any measures, with regard to the undertaking, its direc-
tors or managers or the persons who control it, that areappropriate and necessary to ensure that the undertaking’sbusiness continues to comply with the laws, regulations andadministrative provisions with which the undertaking mustcomply in each Member State and in particular with thescheme of operations in so far as it remains mandatory, and
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to prevent or remedy any irregularities prejudicial to the inter-
ests of the assured persons;
(c) ensure that those measures are carried out, if need be by
enforcement, where appropriate through judicial channels.
Member States may also make provision for the competent
authorities to obtain any information regarding contracts which areheld by intermediaries.'
Article 11
1. Article 6 (2) to (7) of Directive 90/619/EEC shall be deleted.2. Under the conditions laid down by national law, each Member
State shall authorize assurance undertakings with head offices withinits territory to transfer all or part of their portfolios of contracts,concluded under either the right of establishment or the freedom toprovide services, to an accepting office established within theCommunity, if the competent authorities of the home Member Stateof the accepting office certify that after taking the transfer intoaccount the latter possesses the necessary solvency margin.
3. Where a branch proposes to transfer all or part of its portfolio
of contracts, concluded under either the right of establishment or thefreedom to provide services, the Member State of the branch shall beconsulted.
4. In the circumstances referred to in paragraph 2 and 3, the
authorities of the home Member State of the transferring undertakingshall authorize the transfer after obtaining the agreement of thecompetent authorities of the Member States of the commitment.
5. The competent authorities of the Member States consulted shall
give their opinion or consent to the competent authorities of thehome Member State of the transferring assurance undertaking withinthree months of receiving a request; the absence of any responsewithin that period from the authorities consulted shall be consideredequivalent to a favourable opinion or tacit consent.
6. A transfer authorized in accordance with this Article shall be
published as laid down by national law in the Member State of thecommitment. Such transfers shall automatically be valid againstpolicy-holders, the assured persons and any other person havingrights or obligations arising out of the contracts transferred.
This provision shall not affect the Member States’ rights to give
policy-holders the option of cancelling contracts within a fixed periodafter a transfer.
Article 12
1. Article 24 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 241. If an undertaking does not comply with Article 17, the
competent authority of its home Member State may prohibit thefree disposal of its assets after having communicated its intentionto the competent authorities of the Member States of commitment.
2. For the purposes of restoring the financial situation of an
undertaking the solvency margin of which has fallen below theminimum required under Article 19, the competent authority ofthe home Member State shall require that a plan for the restora-tion of a sound financial position be submitted for its approval.
In exceptional circumstances, if the competent authority is of the
opinion that the financial situation of the undertaking will furtherdeteriorate, it may also restrict or prohibit the free disposal of theundertaking’s assets. It shall inform the authorities of otherMember States within the territories of which the undertakingcarries on business of any measures it has taken and the lattershall, at the request of the former, take the same measures.
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3. If the solvency margin falls below the guarantee fund as
defined in Article 20, the competent authority of the homeMember State shall require the undertaking to submit a short-termfinance scheme for its approval.
It may also restrict or prohibit the free disposal of the underta-
king’s assets. It shall inform the authorities of other MemberStates within the territories of which the undertaking carries onbusiness accordingly and the latter shall, at the request of theformer, take the same measures.
4. The competent authorities may further take all measures
necessary to safeguard the interests of the assured persons in thecases provided for in paragraphs 1, 2 and 3.
5. Each Member State shall take the measures necessary to be
able in accordance with its national law to prohibit the freedisposal of assets located within its territory at the request, in thecases provided for in paragraphs 1, 2 and 3, of the undertaking’shome Member State, which shall designate the assets to becovered by such measures.'
Article 13
Article 26 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 261. Authorization granted to an assurance undertaking by the
competent authority of its home Member State may be withdrawnby that authority if that undertaking:
(a) does not make use of the authorization within 12 months,
expressly renounces it or ceases to carry on business for morethan six months, unless the Member State concerned hasmade provision 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 meas-
ures specified in the restoration plan or finance schemereferred to in Article 24;
(d) fails seriously in its obligations under the regulations to which
it is subject.
In the event of the withdrawal or lapse of the authorization, the
competent authority of the home Member State shall notify thecompetent authorities of the other Member States accordingly andthey shall take appropriate measures to prevent the undertakingfrom commencing new operations within their territories, undereither the freedom of establishment or the freedom to provideservices. The home Member State’s competent authority shall, inconjunction with those authorities, take all necessary measures tosafeguard the interests of the assured persons and shall restrict, inparticular, the free disposal of the assets of the undertaking inaccordance with Article 24 (1), (2), second subparagraph, or (3),second subparagraph.
2. Any decision to withdraw an authorization shall be
supported by precise reasons and notified to the undertaking inquestion.'
Article 14
1. Member States shall require any natural or legal person
►
C1who proposes to hold, ◄directly or indirectly, a qualifying
holding in an assurance undertaking first to inform the competentauthorities of the home Member State, indicating the size of theintended 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
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the capital held by him would reach or exceed 20, 33 or 50 % or so
that the assurance undertaking would become his subsidiary.
The competent authorities of the home Member State shall have a
maximum of three months from the date of the notification providedfor in the first subparagraph to oppose such a plan if, in view of theneed to ensure sound and prudent management of the assuranceundertaking, they are not satisfied as to the qualifications of theperson referred to in the first subparagraph. If they do not opposethe plan in question they may fix a maximum period for its imple-mentation.
2. Member States shall require any natural or legal person who
proposes to dispose, directly or indirectly, of a qualifying holding inan assurance undertaking first to inform the competent authorities ofthe home Member State, indicating the size of his intended holding.Such a person must likewise inform the competent authorities if heproposes to reduce his qualifying holding so that the proportion ofthe voting rights or of the capital held by him would fall below 20,33 or 50 % or so that the assurance undertaking would cease to behis subsidiary.
3. On becoming aware of them, assurance undertakings shall
inform the competent authorities of their home Member States of anyacquisitions or disposals of holdings in their capital that cause hold-ings to exceed or fall below one of the thresholds referred to inparagraphs 1 and 2.
They shall also, at least once a year, inform them of the names of
shareholders and members possessing qualifying holdings and thesizes of such holdings as shown, for example, by the informationreceived at the annual general meetings of shareholders and membersor as a result of compliance with the regulations relating to compa-nies listed on stock exchanges.
4. Member States shall require that, if the influence exercised by
the persons referred to in paragraph 1 is likely to operate to thedetriment of the prudent and sound management of the assuranceundertaking, the competent authorities of the home Member Stateshall take appropriate measures to put an end to that situation. Suchmeasures may consist, for example, in injunctions, sanctions againstdirectors and managers, or the suspension of the exercise of thevoting rights attaching to the shares held by the shareholders ormembers in question.
Similar measures shall apply to natural or legal persons failing to
comply with the obligation to provide prior information, as laiddown in paragraph 1. If a holding is acquired despite the oppositionof the competent authorities, the Member States shall, regardless ofany other sanctions to be adopted, provide either for exercise of thecorresponding voting rights to be suspended, or for the nullity ofvotes cast or for the possibility of their annulment.
Article 15
1. The Member States shall provide that all persons working or
who have worked for the competent authorities, as well as auditorsor experts acting on behalf of the competent authorities, shall bebound by the obligation of professional secrecy. This means that noconfidential information which they may receive in the course oftheir duties may be divulged to any person or authority whatsoever,except in summary or aggregate form, such that individual assuranceundertakings cannot be identified, without prejudice to cases coveredby criminal law.
Nevertheless, where an assurance undertaking has been declared
bankrupt or is being compulsorily wound up, confidential informationwhich does not concern third parties involved in attempts to rescuethat undertaking may be divulged in civil or commercial proceedings.
2. Paragraph 1 shall not prevent the competent authorities of the
different Member States from exchanging information in accordancewith the directives applicable to assurance undertakings. That infor-
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mation shall be subject to the conditions of professional secrecy indi-cated in 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 referred to 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 busi-
ness of assurance are met and to facilitate monitoring of theconduct of such business, especially with regard to themonitoring of technical provisions, solvency margins, adminis-trative and accounting procedures and internal control mecha-nisms, or
— to impose sanctions, or— in administrative appeals against decisions of the competent
authority, or
— in court proceedings initiated pursuant to Article 50 or under
special provisions provided for in the directives adopted in thefield of assurance undertakings.
5. Paragraphs 1 and 4 shall not preclude the exchange of informa-
tion within a Member State, where there are two or more competentauthorities in the same Member State, or, between Member States,between competent 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 assurance
undertakings and in other similar procedures, and
— persons responsible for carrying out statutory audits of the
accounts of assurance undertakings and other financial institu-tions, in the discharge of their supervisory functions, and thedisclosure, to bodies which administer (compulsory) winding-upproceedings or guarantee funds, of information necessary to theperformance of their duties. The information received by theseauthorities, bodies and persons shall be subject to the obligationof professional secrecy laid down in paragraph 1.
in the discharge of their supervisory functions, and the disclosure, to
bodies which administer (compulsory) winding-up proceedings orguarantee funds, of information necessary to the performance of theirduties. The information received by these authorities, bodies andpersons shall be subject to the obligation of professional secrecy laiddown in paragraph 1.
6. In addition, notwithstanding paragraphs 1 and 4, Member States
may, under provisions laid down by law, authorize the disclosure ofcertain information to other departments of their central governmentadministrations responsible for legislation on the supervision of creditinstitutions, financial institutions, investment services and assuranceundertakings and to inspectors acting on behalf of those departments.
However, such disclosures may be made only where necessary for
reasons of prudential control.
However, Member States shall provide that information received
under paragraphs 2 and 5 and that obtained by means of the on-the-spot verification referred to in Article 16 of Directive 79/267/EECmay never be disclosed in the cases referred to in this paragraphexcept with the express consent of the competent authorities whichdisclosed the information or of the competent authorities of theMember State in which on-the-spot verification was carried out.
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Article 16
Article 13 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 131. Without prejudice to paragraphs 3 and 7, no undertaking
may be authorized both pursuant to this Directive and pursuant toDirective 73/239/EEC.
2. However, Member States may provide that:— undertakings authorized pursuant to this Directive may also
obtain authorization, in accordance with Article 6 of Directive73/239/EEC for the risks listed in classes 1 and 2 in theAnnex to that Directive,
— undertakings authorized pursuant to Article 6 of Directive 73/
239/EEC solely for the risks listed in classes 1 and 2 in theAnnex to that Directive may obtain authorization pursuant tothis Directive.
3. Subject to paragraph 6, undertakings referred to in paragraph
2 and those which at the time of notification of this Directivecarry on simultaneously both of the activities covered by thisDirective and by Directive 73/239/EEC may continue to do so,provided that each activity is separately managed in accordancewith Article 14.
4. Member States may provide that the undertakings referred to
in paragraph 2 shall comply with the accounting rules governingundertakings authorized pursuant to this Directive for all of theiractivities. Pending coordination in this respect, Member Statesmay also provide that, with regard to rules on winding-up, activi-ties relating to the risks listed in classes 1 and 2 in the Annex toDirective 73/239/EEC carried on by the undertakings referred toin paragraph 2 shall be governed by the rules applicable to lifeassurance activities.
5. Where an undertaking carrying on the activities referred to
in the Annex to Directive 73/239/EEC has financial, commercialor administrative links with an undertaking carrying on the activi-ties covered by this Directive, the supervisory authorities of theMember States within whose territories the head offices of thoseundertakings are situated shall ensure that the accounts of theundertakings in question are not distorted by agreements betweenthese undertakings or by any arrangement which could affect theapportionment of expenses and income.
6. Any Member State may require undertakings whose head
offices are situated in its territory to cease, within a period to bedetermined by the Member State concerned, the simultaneouspursuit of activities in which they were engaged at the time ofnotification of this Directive.
7. The provisions of this Article shall be reviewed on the basis
of a report from the Commission to the Council in the light offuture harmonization of the rules on winding-up, and in any casebefore 31 December 1999.'
Article 17
Article 35 of Directive 79/267/EEC and Article 18 of Directive 90/
619/EEC shall be deleted.
Chapter 2
Article 18
Article 17 of Directive 79/267/EEC shall be replaced by the
following:
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‘Article 17
1. The home Member State shall require every assurance
undertaking to establish sufficient technical provisions, includingmathematical provisions, in respect of its entire business.
The amount of such technical provisions shall be determined
according to the following principles:
A. (i) The amount of the technical life-assurance provisions
shall be calculated by a sufficiently prudent prospectiveactuarial valuation, taking account of all future liabilitiesas determined by the policy conditions for each existingcontract, including:
— all guaranteed benefits, including guaranteed surrender
values,
— bonuses to which policy-holders are already either
collectively or individually entitled, however thosebonuses are described — vested, declared or allotted,
— all options available to the policy-holder under the
terms of the contract,
— expenses, including commissions;
taking credit for future premiums due;
(ii) the use of a retrospective method is allowed, if it can be
shown that the resulting technical provisions are not lowerthan would be required under a sufficiently prudent prospec-tive calculation or if a prospective method cannot be usedfor the type of contract involved;
(iii) a prudent valuation is not a “best estimate” valuation, but
shall include an appropriate margin for adverse deviation ofthe relevant factors;
(iv) the method of valuation for the technical provisions must not
only be prudent in itself, but must also be so having regardto the method of valuation for the assets covering thoseprovisions;
(v) technical provisions shall be calculated separately for each
contract. The use of appropriate approximations or generali-zations is allowed, however, where they are likely to giveapproximately the same result as individual calculations. Theprinciple of separate calculation shall in no way prevent theestablishment of additional provisions for general risks whichare not individualized;
vi) where the surrender value of a contract is guaranteed, the
amount of the mathematical provisions for the contract atany time shall be at least as great as the value guaranteed atthat time.
B. The rate of interest used shall be chosen prudently. It shall be
determined in accordance with the rules of the competentauthority in the home Member State, applying the following prin-ciples:
(a) for all contracts, the competent authority of the undertaking’s
home Member State shall fix one or more maximum rates ofinterest, in particular in accordance with the following rules:
(i) when contracts contain an interest rate guarantee, the
competent authority in the home Member State shall set asingle maximum rate of interest. It may differ accordingto the currency in which the contract is denominated,provided that it is not more than 60 % of the rate onbond issues by the State in whose currency the contractis denominated. In the case of a contract denominated inecus, this limit shall be set by reference to ecu-denomi-nated issues by the Community institutions.
If a Member State decides, pursuant to the second
sentence of the preceding paragraph, to set a maximumrate of interest for contracts denominated in anotherMember State’s currency, it shall first consult the
1992L0096 — EN — 21.11.1992 — 000.001 — 18
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competent authority of the Member State in whosecurrency the contract is denominated;
(ii) however, when the assets of the undertaking are not
valued at their purchase price, a Member State may stipu-late that one or more maximum rates may be calculatedtaking into account the yield on the corresponding assetscurrently held, minus a prudential margin and, in partic-ular for contracts with periodic premiums, furthermoretaking into account the anticipated yield on future assets.The prudential margin and the maximum rate or rates ofinterest applied to the anticipated yield on future assetsshall be fixed by the competent authority of the homeMember State;
(b) the establishment of a maximum rate of interest shall not
imply that the undertaking is bound to use a rate as high asthat;
(c) the home Member State may decide not to apply (a) to the
following categories of contracts:
— unit-linked contracts,
— single-premium contracts for a period of up to eight years,
— without-profits contracts, and annuity contracts with nosurrender value.
— without-profits contracts, and annuity contracts with no
surrender value.
In the cases referred to in the last two indents of the firstsubparagraph, in choosing a prudent rate of interest, accountmay be taken of the currency in which the contract is denomi-nated and corresponding assets currently held and where theundertaking’s assets are valued at their current value, theanticipated yield on future assets.Under no circumstances may the rate of interest used behigher than the yield on assets as calculated in accordancewith the accounting rules in the home Member State, less anappropriate deduction;
(d) the Member State shall require an undertaking to set aside in
its accounts a provision to meet interest-rate commitmentsvis-à-vis policy-holders if the present or foreseeable yield on
the undertaking’s assets is insufficient to cover those commit-ments;
(e) the Commission and the competent authorities of the Member
States which so request shall be notified of the maximumrates of interest set under (a).
C. The statistical elements of the valuation and the allowance for
expenses used shall be chosen prudently, having regard to theState of the commitment, the type of policy and the adminis-trative costs and commissions expected to be incurred.
D. In the case of participating contracts, the method of calculation
for technical provisions may take into account, either implicitly orexplicitly, future bonuses of all kinds, in a manner consistentwith the other assumptions on future experience and with thecurrent method of distribution of bonuses.
E. Allowance for future expenses may be made implicitly, for
instance by the use of future premiums net of managementcharges. However, the overall allowance, implicit or explicit, shallbe not less than a prudent estimate of the relevant futureexpenses.
F. The method of calculation of technical provisions shall not be
subject to discontinuities from year to year arising from arbitrarychanges to the method or the bases of calculation and shall besuch as to recognize the distribution of profits in an appropriateway over the duration of each policy.
2. Assurance undertakings shall make available to the public the
bases and methods used in the calculation of the technical provisions,including provisions for bonuses.
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3. The home Member State shall require every assurance under-taking to cover the technical provisions in respect of its entire busi-ness by matching assets, in accordance with Article 24 of Directive92/96/EEC. In respect of business written in the Community, theseassets must be localized within the Community. Member States shallnot require assurance undertakings to localize their assets in a partic-ular Member State. The home Member State may, however, permitrelaxations in the rules on the localization of assets.
4. If the home Member State allows any technical provisions to be
covered by claims against reassurers, it shall fix the percentage soallowed. In such case, it may not require the localization of theassets representing such claims.'
Article 19
Premiums for new business shall be sufficient, on reasonable
actuarial assumptions, to enable assurance undertakings to meet alltheir commitments and, in particular, to establish adequate technicalprovisions.
For this purpose, all aspects of the financial situation of an assurance
undertaking may be taken into account, without the input fromresources other than premiums and income earned thereon beingsystematic and permanent in such a way that it may jeopardize theundertaking’s solvency in the long term.
Article 20
The assets covering the technical provisions shall take account of the
type of business carried on by an undertaking in such a way as tosecure the safety, yield and marketability of its investments, whichthe undertaking shall ensure are diversified and adequately spread.
Article 21
1. The home Member State may not authorize assurance 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;
(e) land, buildings and immovable property rights;
B.Debts and claims
(f) debts owed by reassurers, including reassurers’ shares of tech-
nical provisions;
(g) deposits with and debts owed by ceding undertakings;(h) debts owed by policy-holders and intermediaries arising out of
direct and reassurance operations;
(i) advances against policies;(j) tax recoveries;
(k) claims against guarantee funds;
C.Others
(l) tangible fixed assets, other than land and buildings, valued on
the basis of prudent amortization;
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(m) cash at bank and in hand, deposits with credit institutions and
any other body authorized to receive deposits;
(n) deferred acquisition costs;(o) accrued interest and rent, other accrued income and prepay-
ments;
(p) reversionary interests.
In the case of the association of underwriters known as Lloyd’s,
asset categories shall also include guarantees and letters of creditissued by credit institutions within the meaning of Directive 77/780/EEC (
1) or by assurance undertakings, together with verifiable
sums arising out of life assurance policies, to the extent that theyrepresent funds belonging to members.
The inclusion of any asset or category of assets listed in the first
subparagraph shall not mean that all these assets should automaticallybe 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 reas-surers.
In determining and applying the rules which it lays down, the home
Member State shall, in particular, ensure that the following principlesare complied with:
(i) assets covering technical provisions shall be valued net of any
debts arising out of their acquisition;
(ii) all assets must be valued on a prudent basis, allowing for the
risk of any amounts not being realizable. In particular, tangiblefixed assets other than land and buildings may be accepted ascover for technical provisions only if they are valued on thebasis of prudent amortization;
(iii) loans, whether to undertakings, to a State or international
organization, to local or regional authorities or to naturalpersons, may be accepted as cover for technical provisionsonly if there are sufficient guarantees as to their security,whether these are based on the status of the borrower, mort-gages, bank guarantees or guarantees granted by assuranceundertakings or other forms of security;
(iv) derivative instruments such as options, futures and swaps in
connection with assets covering technical provisions may beused in so far as they contribute to a reduction of investmentrisks or facilitate efficient portfolio management. They must bevalued on a prudent basis and may be taken into account inthe valuation of the underlying assets;
(v) transferrable securities which are not dealt in on a regulated
market may be accepted as cover for technical provisions onlyif they can be realized in the short term or if they are holdingsin credits institutions, in assurance undertakings, within thelimits permitted by Article 8 of Directive 79/267/EEC, or ininvestment undertakings established in a Member State;
(vi) Forderungen an einen Dritten können zur Bedeckung der versi-
cherungstechnischen Rückstellungen nur nach Abzug alleraufrechenbaren Gegenforderungen an diesen Dritten zugelassenwerden.
(vii) the value of any debts and claims accepted as cover for tech-
nical provisions must be calculated on a prudent basis, withdue allowance for the risk of any amounts not being realizable.In particular, debts owed by policy-holders and intermediaries
(1) First Council Directive 77/780/EEC of 12 December 1977 on the coordi-
nation of the laws, regulations and administrative provisions relating to thetaking up and pursuit of the business of credit institutions (OJ No L 322,17. 12. 1977, p. 30). Directive as last amended by Directive 89/646/EEC(OJ No L 386, 30. 12. 1989, p. 1).
1992L0096 — EN — 21.11.1992 — 000.001 — 21
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arising out of assurance and reassurance operations may beaccepted only in so far as they have been outstanding for notmore than three months;
(viii) where the assets held include an investment in a subsidiary
undertaking which manages all or part of the assurance under-taking’s investments on its behalf, the home Member Statemust, when applying the rules and principles laid down in thisArticle, take into account the underlying assets held by thesubsidiary undertaking; the home Member State may treat theassets of other subsidiaries in the same way;
(ix) deferred acquisition costs may be accepted as cover for tech-
nical provisions only to the extent that this is consistent withthe calculation of the mathematical provisions.
2. Notwithstanding paragraph 1, in exceptional circumstances and
at an assurance undertaking’s request, the home Member State may,temporarily and under a properly reasoned decision, accept othercategories of assets as cover for technical provisions, subject toArticle 20.
Article 22
1. As regards the assets covering technical provisions, the home
Member State shall require every assurance undertaking to invest nomore than:
(a) 10 % of its total gross technical provisions in any one piece of
land or building, or a number of pieces of land or buildingsclose enough to each other to be considered effectively as oneinvestment;
(b) 5 % of its total gross technical provisions in shares and other
negotiable securities treated as shares, bonds, debt securities andother money- and capital-market instruments from the sameundertaking, or in loans granted to the same borrower, takentogether, the loans being loans other than those granted to aState, regional or local authority or to an international organ-ization of which one or more Member States are members. Thislimit may be raised to 10 % if an undertaking invests not morethan 40 % of its gross technical provisions in the loans or securi-ties of issuing bodies and borrowers in each of which it investsmore 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 undertakings — in so faras Article 8 of Directive 79/267/EEC allows it — and investmentundertakings established in a Member State. The limits may beraised to 8 and 2 % respectively by a decision taken on a case-by-case basis by the competent authority of the home MemberState;
(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 secur-
ities treated as shares and debt securities which are not dealt inon a regulated market.
2. The absence of a limit in paragraph 1 on investment in any
particular category does not imply that assets in that category shouldbe accepted as cover for technical provisions without limit. Thehome Member State shall lay down more detailed rules fixing theconditions for the use of acceptable assets. In particular it shallensure, in the determination and the application of those rules, thatthe following principles are complied with:
(i) assets covering technical provisions must be diversified and
spread in such a way as to ensure that there is no excessivereliance on any particular category of asset, investment marketor investment;
1992L0096 — EN — 21.11.1992 — 000.001 — 22
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(ii) investment in particular types of asset which show high levels
of risk, whether because of the nature of the asset or the qualityof the issuer, must be restricted to prudent levels;
(iii) limitations on particular categories of asset must take account of
the treatment of reassurance in the calculation of technicalprovisions;
(iv) where the assets held include an investment in a subsidiary
undertaking which manages all or part of the assurance underta-king’s investments on its behalf, the home Member State must,when applying the rules and principles laid down in this Article,take into account the underlying assets held by the subsidiaryundertaking; the home Member State may treat the assets ofother subsidiaries in 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, whenapplying the rules and principles contained in this Article, takeinto account the underlying assets held by such credit institu-tions. This treatment may be applied only where the credit insti-tution has its head office in a Member State, is entirely ownedby that Member State and/or that State’s local authorities and itsbusiness, according to its memorandum and articles of associa-tion, consists of extending, through its intermediaries, loans to,or guaranteed by, States or local authorities or of loans tobodies closely linked to the State 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 morelimitative treatment to:
— any loan unaccompanied by a bank guarantee, a guarantee issued
by an assurance undertaking, a mortgage or any other form ofsecurity, as compared with loans accompanied by such collateral,
— UCITS not coordinated within the meaning of Directive 85/
611/EEC (
1) and other investment funds, as compared with
UCITS coordinated within the meaning of that Directive,
— securities which are not dealt in on a regulated market, as
compared with those which are,
— bonds, debt securities and other money- and capital-market instru-
ments not issued by States, local or regional authorities or under-takings belonging to Zone A as defined in Directive 89/647/EEC (
2), or the issuers of which are international organ-
izations not numbering at least one Community Member Stateamong their members, as compared with the same financialinstruments issued by such bodies.
4. Member States may raise the limit laid down in paragraph 1 (b)
to 40 % in the case of certain debt securities when these are issuedby a credit institution which has its head office in a Member Stateand is subject by law to special official supervision designed toprotect the holders of those debt securities. In particular, sumsderiving from the issue of such debt securities must be invested inaccordance with the law in assets which, during the whole period ofvalidity of the debt securities, are capable of covering claimsattaching to debt securities and which, in the event of failure of theissuer, would be used on a priority basis for the reimbursement ofthe principal and payment of the accrued interest.
(1) Council Directive 85/611/EEC of 20 December 1985 on the coordination
of laws, regulations and administrative provisions relating to undertakingsfor collective investment in transferable securities (UCITS) (OJ No L 375,31. 12. 1985, p. 3). Directive as amended by Directive 88/220/EEC (OJNo L 100, 19. 4. 1988, p. 31).
(
2) Council Directive 89/647/EEC of 18 December 1989 on a solvency ratio
for credit institutions (OJ No L 386, 30. 12. 1989, p. 14).
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5. Member States shall not require assurance undertakings toinvest in particular categories of assets.
6. Notwithstanding paragraph 1, in exceptional circumstances and
at the assurance undertaking’s request, the home Member State may,temporarily and under a properly reasoned decision, allow exceptionsto the rules laid down in paragraph 1 (a) to (e), subject to Article20.
Article 23
1. Where the benefits provided by a contract are directly linked to
the value of units in an UCITS or to the value of assets contained inan internal fund held by the insurance undertaking, usually dividedinto units, the technical provisions in respect of those benefits mustbe represented as closely as possible by those units or, in the casewhere units are not established, by those assets.
2. Where the benefits provided by a contract are directly linked to
a share index or some other reference value other than those referredto in paragraph 1, the technical provisions in respect of those bene-fits must be represented as closely as possible either by the unitsdeemed to represent the reference value or, in the case where unitsare not established, by assets of appropriate security and market-ability which correspond as closely as possible with those on whichthe particular reference value is based.
3. Articles 20 and 22 shall not apply to assets held to match
liabilities which are directly linked to the benefits referred to in para-graphs 1 and 2. References to the technical provisions in Article 22shall be to the technical provisions excluding those in respect ofsuch liabilities.
4. Where the benefits referred to in paragraph 1 and 2 include a
guarantee of investment performance or some other guaranteedbenefit, the corresponding additional technical provisions shall besubject to Articles 20, 21 and 22.
Article 24
1. For the purposes of Articles 17 (3) and 28 of Directive 79/
267/EEC, Member States shall comply with Annex I to this Directiveas regards the matching rules.
2. This Article shall not apply to the commitments referred to in
Article 23 of this Directive.
Article 25
Article 18, second subparagraph, point 1 of Directive 79/267/EEC
shall be replaced by the following:
‘1. the assets of the undertaking free of any foreseeable liabilities,
less any intangible items. In particular the following shall beincluded:
— the paid-up share capital or, in the case of a mutual assur-
ance undertaking, the effective initial fund plus anymembers’ accounts which meet all the following criteria:
(a) the memorandum and articles of association must stipu-
late that payments may be made from these accounts tomembers only in so far as this does not cause thesolvency margin to fall below the required level, or,after the dissolution of the undertaking, if all theundertaking’s other debts have been settled;
(b) the memorandum and articles of association must stipu-
late, with respect to any such payments for reasonsother than the individual termination of membership,that the competent authorities must be notified at leastone month in advance and can prohibit the paymentwithin that period;
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(c) the relevant provisions of the memorandum and articles
of association may be amended only after thecompetent authorities have declared that they have noobjection to the amendment, without prejudice to thecriteria stated in (a) and (b),
— one half of the unpaid share capital or initial fund, once the
paid-up part amounts to 25 % of that share capital or fund,
— reserves (statutory reserves and free reserves) not corre-
sponding to underwriting liabilities,
— any profits brought forward,— cumulative preferential share capital and subordinated loan
capital may be included but, if so, only up to 50 % of themargin, no more than 25 % of which shall consist of subordi-nated loans with a fixed maturity, or fixed-term cumulativepreferential share capital, if the following minimum criteriaare met:
(a) in the event of the bankruptcy or liquidation of the
assurance undertaking, binding agreements must existunder which the subordinated loan capital or preferen-tial share capital ranks after the claims of all othercreditors and is not to be repaid until all other debtsoutstanding at the time have been settled.
Subordinated loan capital must also fulfil the following
conditions:
(b) only fully paid-up funds may be taken into account;(c) for loans with a fixed maturity, the original maturity
must be at least five years. No later than one yearbefore the repayment date the assurance undertakingmust submit to the competent authorities for theirapproval a plan showing how the solvency margin willbe kept at or brought to the required level at maturity,unless the extent to which the loan may rank as acomponent of the solvency margin is gradually reducedduring at least the last five years before the repaymentdate. The competent authorities may authorize the earlyrepayment of such loans provided application is madeby the issuing assurance undertaking and its solvencymargin will not fall below the required level;
(d) loans the maturity of which is not fixed must be repay-
able only subject to five years’ notice unless the loansare no longer considered as a component of thesolvency margin or unless the prior consent of thecompetent authorities is specifically required for earlyrepayment. In the latter event the assurance undertakingmust notify the competent authorities at least sixmonths before the date of the proposed repayment,specifying the actual and required solvency marginboth before and after that repayment. The competentauthorities shall authorize repayment only if the assur-ance undertaking’s solvency margin will not fall belowthe required level; (e) the loan agreement must notinclude any clause providing that in specified circum-stances, other than the winding-up of the assuranceundertaking, the debt will become repayable before theagreed repayment dates;
(e) the loan agreement must not include any clause
providing that in specified circumstances, other than thewinding-up of the assurance undertaking, the debt willbecome repayable before the agreed repayment dates;
(f) the loan agreement may be amended only after the
competent authorities have declared that they have noobjection to the amendment,
— securities with no specified maturity date and other instru-
ments that fulfil the following conditions, including cumula-tive preferential shares other than those mentioned in thepreceding indent, up to 50 % of the margin for the total of
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such securities and the subordinated loan capital referred to in
the preceding indent:
(a) they may not be repaid on the initiative of the bearer
or without the prior consent of the competent authority;
(b) the contract of issue must enable the assurance under-
taking to defer the payment of interest on the loan;
(c) the lender’s claims on the assurance undertaking must
rank entirely after those of all non-subordinated cred-itors;
(d) the documents governing the issue of the securities
must provide for the loss-absorption capacity of thedebt and unpaid interest, while enabling the assuranceundertaking to continue its business;
(e) only fully paid-up amounts may be taken into account.'
Article 26
No more than three years after the date of application of this
Directive, the Commission shall submit a report to the InsuranceCommittee on the need for further harmonization of the solvencymargin.
Article 27
Article 21 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 211. Member States shall not prescribe any rules as to the choice
of the assets that need not be used as cover for the technicalprovisions referred to in Article 17.
2. Subject to Article 17 (3), Article 24 (1), (2), (3) and (5) and
the second subparagraph of Article 26 (1), Member States shallnot restrain the free disposal of those assets, whether movable orimmovable, that form part of the assets of authorized assuranceundertakings.
3. Paragraphs 1 and 2 shall not preclude any measures which
Member States, while safeguarding the interests of the livesassured, are entitled to take as owners or members of or partnersin the undertakings in question.'
Chapter 3
Article 28
The Member State of the commitment shall not prevent a policy-
holder from concluding a contract with an assurance undertakingauthorized under the conditions of Article 6 of Directive 79/267/EEC, as long as that does not conflict with legal provisionsprotecting the general good in the Member State of the commitment.
Article 29
Member States shall not adopt provisions requiring the prior approval
or systematic notification of general and special policy conditions,scales of premiums, technical bases used in particular for calculatingscales of premiums and technical provisions or forms and otherprinted documents which an assurance undertaking intends to use inits dealings with policy-holders.
Notwithstanding the first subparagraph, for the sole purpose of veri-
fying compliance with national provisions concerning actuarial princi-ples, the Member State of origin may require systematic communi-cation of the technical Bases used in particular for calculating scalesof premiums and technical provisions, without that requirement
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constituting a prior condition for an undertaking to carry on its busi-
ness.
Not later than five years after the date of application of this
Directive, the Commission shall submit a report to the Council onthe implementation of those provisions.
Article 30
1. In the first subparagraph of Article 15 (1) of Directive 90/
619/EEC the words ‘in one of the cases referred to in Title III'’ shallbe deleted.
2. Article 15 (2) of Directive 90/619/EEC shall be replaced by the
following:
‘2. The Member States need not apply paragraph 1 to contracts
of six months’ duration or less, nor where, because of the statusof the policy-holder or the circumstances in which the contract isconcluded, the policy-holder does not need this special protection.Member States shall specify in their rules where paragraph 1 isnot applied.'
Article 31
1. Before the assurance contract is concluded, at least the informa-
tion listed in point A of Annex II shall be communicated to thepolicy-holder.
2. The policy-holder shall be kept informed throughout the term of
the contract of any change concerning the information listed in pointB of Annex II.
3. The Member State of the commitment may require assurance
undertakings to furnish information in addition to that listed inAnnex II only if it is necessary for a proper understanding by thepolicy-holder of the essential elements of the commitment.
4. The detailed rules for implementing this Article and Annex II
shall be laid down by the Member State of the commitment.
TITLE IV
PROVISIONS RELATING TO RIGHT OF ESTABLISHMENT AND
FREEDOM TO PROVIDE SERVICES
Article 32
Article 10 of Directive 79/267/EEC shall be replaced by the
following:
‘Article 101. An assurance undertaking that proposes to establish a branch
within the territory of another Member State shall notify thecompetent authorities of its home Member State.
2. The Member States shall require every assurance undertaking
that proposes to establish a branch within the territory of anotherMember State to provide the following information when effectingthe notification provided for in paragraph 1:
(a) the Member State within the territory of which it proposes to
establish a branch;
(b) a scheme of operations setting out inter alia the types of
business envisaged and the structural organization of 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 and
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courts of the Member State of the branch. With regard to
Lloyd’s, in the event of any litigation in the Member State ofthe branch arising out of underwritten commitments, theassured persons must not be treated less favourably than if thelitigation had been brought against businesses of a conven-tional type. The authorized agent must, therefore, possesssufficient powers for proceedings to be taken against him andmust in that capacity be able to bind the Lloyd’s underwritersconcerned.
3. Unless the competent authorities of the home Member State
have reason to doubt the adequacy of the administrative structureor the financial situation of the assurance undertaking or the goodrepute and professional qualification or experience of the directorsor managers or the authorized agent, taking into account the busi-ness planned, they shall within three months of receiving all theinformation referred to in paragraph 2 communicate that informa-tion 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 assurance undertaking has the minimum solvencymargin calculated in accordance with Articles 19 and 20.
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 theyshall give the reasons for their refusal to the undertakingconcerned within three months of receiving all the information inquestion. That refusal or failure to act shall be subject to a rightto apply to the courts in the home Member State.
4. Before the branch of an assurance undertaking starts busi-
ness, the competent authorities of the Member State of the branchshall, within two months of receiving the information referred toin paragraph 3, inform the competent authority of the homeMember State, if appropriate, of the conditions under which, inthe interest of the general good, that business must be carried onin the Member State of the branch.
5. On receiving a communication from the competent authori-
ties of the Member State of the branch or, if no communication isreceived from them, on expiry of the period provided for in para-graph 4, the branch may be established and start business.
6. In the event of a change in any of the particulars communi-
cated under paragraph 2 (b), (c) or (d), an assurance undertakingshall give written notice of the change to the competent authori-ties of the home Member State and of the Member State of thebranch at least one month before making the change so that thecompetent authorities of the home Member State and thecompetent authorities of the Member State of the branch mayfulfil their respective roles under paragraphs 3 and 4.'
Article 33
Article 11 of Directive 79/267/EEC shall be deleted.
Article 34
Article 11 of Directive 90/619/EEC shall be replaced by the
following:
‘Article 11Any 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 commitments itproposes to cover.'
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Article 35
Article 14 of Directive 90/619/EEC shall be replaced by the
following:
‘Article 141. Within one month of the notification provided for in Article
11, the competent authorities of the home Member State shallcommunicate to the Member State or Member States within theterritory of which the undertaking intends to carry on business byway of the freedom to provide services:
(a) a certificate attesting that the undertaking has the minimum
solvency margin calculated in accordance with Articles 19 and20 of Directive 79/267/EEC;
(b) the classes which the undertaking has been authorized to
offer;
(c) the nature of the commitments which the undertaking
proposes to cover in the Member State of the provision ofservices.
At the same time, they shall inform the undertaking concerned
accordingly.
2. Where the competent authorities of the home Member State
do not communicate the information referred to in paragraph 1within the period laid down, they shall give the reasons for theirrefusal to the undertaking within that same period. The refusalshall be subject to a right to apply to the courts in the homeMember State.
3. The undertaking may start business on the certified date on
which it is informed of the communication provided for in thefirst subparagraph of paragraph 1.'
Article 36
Article 17 of Directive 90/619/EEC shall be replaced by the
following:
‘Article 17Any change which an undertaking intends to make to the infor-
mation referred to in Article 11 shall be subject to the procedureprovided for in Articles 11 and 14.'
Article 37
Articles 10, 12, 13, 16, 22 and 24 of Directive 90/619/EEC shall be
deleted.
Article 38
The competent authorities of the Member State of the branch or the
Member State of the provision of services may require that the infor-mation which they are authorized under this Directive to request withregard to the business of assurance undertakings operating in theterritory of that State shall be supplied to them in the officiallanguage or languages of that State.
Article 39
1. Article 19 of Directive 90/619/EEC shall be deleted.2. The Member State of the branch or of provision of services
shall not lay down provisions requiring the prior approval or system-atic notification of general and special policy conditions, scales ofpremiums, technical bases used in particular for calculating scales ofpremiums and technical provisions, forms and other printed docu-
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ments which an undertaking intends to use in its dealings with
policy-holders. For the purpose of verifying compliance with nationalprovisions concerning assurance contracts, it may require an under-taking that proposes to carry on assurance business within its terri-tory, under the right of establishment or the freedom to provideservices, to effect only non-systematic notification of those policyconditions and other printed documents without that requirementconstituting a prior condition for an undertaking to carry on its busi-ness.
Article 40
1. Article 20 of Directive 90/619/EEC shall be deleted.2. Any undertaking carrying on business under the right of estab-
lishment or the freedom to provide services shall submit to thecompetent authorities of the Member State of the branch and/or ofthe Member State of the provision of services all documentsrequested of it for the purposes of this Article in so far as undertak-ings the head office of which is in those Member States are alsoobliged 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 freedomto provide services in 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 shallinform the competent authorities of the home Member State accord-ingly. The latter authorities shall, at the earliest opportunity, take allappropriate measures to ensure that the undertaking concernedremedies that irregular situation. The nature of those measures shallbe communicated to the competent authorities of the Member Stateconcerned.
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 violating the legal provisions in force inthe Member State concerned, the latter may, after informing thecompetent authorities of the home Member State, take appropriatemeasures to prevent or penalize further irregularities, including, in sofar as is strictly necessary, preventing that undertaking fromcontinuing to conclude new assurance contracts within its territory.Member States shall ensure that in their territories it is possible toserve the legal documents necessary for such measures on assuranceundertakings.
6. Paragraphs 3, 4 and 5 shall not affect the emergency power of
the Member States concerned to take appropriate measures to preventor penalize irregularities committed within their territories. This shallinclude the possibility of preventing assurance undertakings fromcontinuing to conclude new assurance contracts within their terri-tories.
7. Paragraph 3, 4 and 5 shall not affect the power 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,the competent authorities of the latter may, in accordance withnational law, apply the administrative penalties prescribed for thatinfringement by way of enforcement against that establishment orproperty.
9. Any measure adopted under paragraphs 4 to 8 involving penal-
ties or restrictions on the conduct of assurance business must beproperly reasoned and communicated to the undertaking concerned.
10. Every two years, the Commission shall submit to the Insur-
ance Committee a report summarizing the number and type of casesin which, in each Member State, authorization has been refusedpursuant to Article 10 of Directive 79/267/EEC or Article 14 of
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Directive 90/619/EEC as amended by this Directive or measures have
been taken under paragraph 5. Member States shall cooperate withthe Commission by providing it with the information required forthat report.
Article 41
Nothing in this Directive shall prevent assurance undertakings with
head offices in other Member States from advertising their servicesthrough all available means of communication in the Member Stateof the branch or Member State of the provision of services, subjectto any rules governing the form and content of such advertisingadopted in the interest of the general good.
Article 42
1. Article 21 of Directive 90/619/EEC shall be deleted.2. Should an assurance undertaking be wound up, commitments
arising out of contracts underwritten through a branch or under thefreedom to provide services shall be met in the same way as thosearising out of that undertaking’s other assurance contracts, withoutdistinction as to nationality as far as the lives assured and the benefi-ciaries are concerned.
Article 43
1. Article 23 of Directive 90/619/EEC shall be deleted.2. Every assurance undertaking shall inform the competent
authority of its home Member State, separately in respect of transac-tions carried out under the right of establishment and those carriedout under the freedom to provide services, of the amount of thepremiums, without deduction of reassurance, by Member State andby each of classes I to IX, as defined in the Annex to Directive79/267/EEC.
The competent authority of the home Member State shall, within a
reasonable time and on an aggregate basis forward this informationto the competent authorities of each of the Member States concernedwhich so request.
Article 44
1. Article 25 of Directive 90/619/EEC shall be deleted.2. Without prejudice to any subsequent harmonization, every
assurance contract shall be subject exclusively to the indirect taxesand parafiscal charges on assurance premiums in the Member Stateof the commitment within the meaning of Article 2 (e) of Directive90/619/EEC and also, with regard to Spain, to the surcharges legallyestablished in favour of the Spanish ‘Consorcio de compensación deseguros' for the performance of its functions relating to thecompensation of losses arising from extraordinary events occurring inthat Member State.
The law applicable to the contract pursuant to Article 4 of Directive
90/619/EEC shall not affect the fiscal arrangements applicable.
Pending future harmonization, each Member State shall apply to
those undertakings which cover commitments situated within its terri-tory its own national provisions for measures to ensure the collectionof indirect taxes and parafiscal charges due under the first subpara-graph.
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TITLE V
TRANSITIONAL PROVISIONS
Article 45
Member States may allow assurance undertakings with head offices
in their territories, and whose buildings and land covering their tech-nical provisions exceed, at the time of the notification of thisDirective, the percentage laid down in Article 22 (1) (a) a periodexpiring no later than 31 December 1998 within which to complywith that provision.
Article 46
1. Article 26 of Directive 90/619/EEC shall be deleted.2. Spain and Portugal, until 31 December 1995, and Greece, until
31 December 1998, may operate the following transitional arrange-ments for contracts in respect of which one of those Member Statesis the Member State of the commitment:
(a) by way of derogation from Article 8 (3) of Directive 79/267/EEC
and from Articles 29 and 39 of this Directive, the competentauthorities of the Member States in question may require thecommunication, before use, of general and special insurancepolicy conditions;
(b) the amount of the technical provisions relating to such contracts
shall be determined under the supervision of the Member Stateconcerned in accordance with its own rules or, failing that, inaccordance with the procedures established in that State inaccordance with this Directive. Cover of those technical provi-sions by equivalent and matching assets and the localization ofthose assets shall be effected under the supervision of thatMember State in accordance with its rules and practices adoptedin accordance with this Directive.
TITLE VI
FINAL PROVISIONS
Article 47
The following technical adjustments to be made to Directives 79/
267/EEC and 90/619/EEC and 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 79/267/EEC,
— amendments to the list set out in the Annex to Directive 79/
267/EEC, or adaptation of the terminology used in that list totake account of the development of assurance markets,
— clarification of the items constituting the solvency margin listed
in Article 18 of Directive 79/267/EEC to take account of thecreation of new financial instruments,
— alteration of the minimum guarantee fund provided for in Article
20 (2) of Directive 79/267/EEC to take account of economic andfinancial developments,
— amendments, to take account of the creation of new financial
instruments, to the list of assets acceptable as cover for technicalprovisions set out in Article 21 of this Directive and to the ruleson the spreading of investments laid down in Article 22 of thisDirective,
— changes in the relaxations in the matching rules laid down in
Annex I to this Directive, to take account of the development ofnew currency-hedging instruments or progress made in economicand monetary union,
— clarification of the definitions in order to ensure uniform applica-
tion of Directives 79/267/EEC and 90/619/EEC and of thisDirective throughout the Community,
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— the technical adjustments necessary to the rules for setting the
maxima applicable to interest rates, pursuant to Article 17 ofDirective 79/267/EEC, as amended by this Directive, in particularto take account of progress made in economic and monetaryunion.
Article 48
1. Branches which have started business, in accordance with the
provisions in force in their Member State of establishment, beforethe entry into force of the provisions adopted in implementation ofthis Directive shall be presumed to have been subject to the proce-dure laid down in Article 10 (1) to (5) of Directive 79/267/EEC.They shall be governed, from the date of that entry into force, byArticles 17, 23, 24 and 26 of Directive 79/267/EEC and by Article40 of this Directive.
2. Articles 11 and 14 of Directive 90/619/EEC, as amended by
this Directive, shall not affect rights acquired by assurance undertak-ings carrying on business under the freedom to provide servicesbefore the entry into force of the provisions adopted in implementa-tion of this Directive.
Article 49
The following Article 31a shall be inserted in Directive 79/267/EEC:
‘Article 31a
1. Under the conditions laid down by national law, each
Member State shall authorize agencies and branches set up withinits territory and covered by this Title to transfer all or part oftheir portfolios of contracts to an accepting office established inthe same Member State if the competent authorities of thatMember State or, if appropriate, those of the Member Statereferred to in Article 30 certify that after taking the transfer intoaccount the accepting office possesses the necessary solvencymargin.
2. Under the conditions laid down by national law, each
Member State shall authorize agencies and branches set up withinits territory and covered by this Title to transfer all or part oftheir portfolios of contracts to an assurance undertaking with ahead office in another Member State if the competent authoritiesof that Member State certify that after taking the transfer intoaccount the accepting office possesses the necessary solvencymargin.
3. If under the conditions laid down by national law a Member
State authorizes agencies and branches set up within its territoryand covered by this Title to transfer all or part of their portfoliosof contracts to an agency or branch covered by this Title and setup within the territory of another Member State it shall ensurethat the competent authorities of the Member State of theaccepting office or, if appropriate, of the Member State referredto in Article 30 certify that after taking the transfer into accountthe accepting office possesses the necessary solvency margin, thatthe law of the Member State of the accepting office permits sucha transfer and that the State has agreed to the transfer.
4. In the circumstances referred to in paragraphs 1, 2 and 3 the
Member State in which the transferring agency or branch is situ-ated shall authorize the transfer after obtaining the agreement ofthe competent authorities of the Member State of the commit-ment, where different from the Member State in which the trans-ferring agency or branch is situated.
5. The competent authorities of the Member States consulted
shall give their opinion or consent to the competent authorities ofthe home Member State of the transferring assurance undertakingwithin three months of receiving a request; the absence of any
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response from the authorities consulted within that period shall beconsidered equivalent to a favourable opinion or tacit consent.
6. A transfer authorized in accordance with this Article shall be
published as laid down by national law in the Member State ofthe commitment. Such transfers shall automatically be validagainst policy-holders, assured persons and any other personshaving rights or obligations arising out of the contracts trans-ferred.
This provision shall not affect the Member States’ right to give
policy-holders the opinion of cancelling contracts within a fixedperiod after a transfer.'
Article 50
Member States shall ensure that decisions taken in respect of an
assurance undertaking under laws, regulations and administrativeprovisions adopted in accordance with this Directive may be subjectto the right to apply to the courts.
Article 51
1. Member States shall adopt the laws, regulations and adminis-
trative provisions necessary for their compliance with this Directiveno later than 31 December 1993 and bring them into force no laterthan 1 July 1994. They shall forthwith inform the Commissionthereof.
When they adopt such measures, the Member States shall include
references to this Directive or shall make such references when theyeffect official publication. The manner in which such references areto be made shall be laid down by the Member States.
2. The Member States shall communicate to the Commission the
texts of the main provisions of national law which they adopt in thefield covered by this Directive.
Article 52
This Directive is addressed to the Member States.
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ANNEX I
MATCHING RULES
The currency in which the assurer’s commitments are payable shall be deter-
mined in accordance with the following rules:
1. Where the cover provided by a contract is expressed in terms of a partic-
ular currency, the assurer’s commitments are considered to be payable inthat currency.
2. Member States may authorize undertakings not to cover their technical
provisions, including their mathematical provisions, by matching assets ifapplication of the above procedures would result in the undertaking beingobliged, in order to comply with the matching principle, to hold assets ina currency amounting to not more than 7 % of the assets existing in othercurrencies.
3. Member States may choose not to require undertakings to apply the
matching principle where commitments are payable in a currency otherthan the currency of one of the Community Member States, if investmentsin that currency are regulated, if the currency is subject to transfer restric-tions or if, for similar reasons, it is not suitable for covering technicalprovisions.
4. Undertakings are authorized not to hold matching assets to cover an
amount not exceeding 20 % of their commitments in a particular currency.
However, total assets in all currencies combined must be at least equal to
total commitments in all currencies combined.
5. Each Member State may provide that, whenever under the preceding
procedures a commitment has to be covered by assets expressed in thecurrency of a Member State, this requirement shall also be considered tobe satisfied when the assets are expressed in ecus.
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ANNEX II
INFORMATION FOR POLICY-HOLDERS
The following information, which is to be communicated to the policy-holder
before the contract is concluded (A) or during the term of the contract (B),must be provided in a clear and accurate manner, in writing, in an officiallanguage of the Member State of the commitment.
However, such information may be in another language if the policy-holder
so requests and the law of the Member State so permits or the policy-holderis free to choose the law applicable.
A.Before concluding the contract
Information about the assurance undertaking Information about the commitment
(a) 1. The name of the undertaking and its
legal form
(a) 2. The name of the Member State in
which the head office and, whereappropriate, the agency or branchconcluding the contract is situated
(a) 3. The address of the head office and,
where appropriate, of the agency orbranch concluding the contract(a) 4. Definition of each benefit and each
option
(a) 5. Term of the contract(a) 6. Means of terminating the contract(a) 7. Means of payment of premiums and
duration of payments
(a) 8. Means of calculation and distribution
of bonuses
(a) 9. Indication of surrender and paid-up
values and the extent to which theyare guaranteed
(a) 10. Information on the premiums for each
benefit, both main benefits andsupplementary benefits, where appro-priate
(a) 11. For unit-linked policies, definition of
the units to which the benefits arelinked
(a) 12. Indication of the nature of the under-
lying assets for unit-linked policies
(a) 13. Arrangements for application of the
cooling-off period
(a) 14. General information on the tax
arrangements applicable to the type ofpolicy
(a) 15. The arrangements for handling
complaints concerning contracts bypolicy-holders, lives assured or bene-ficiaries under contracts including,where appropriate, the existence of acomplaints body, without prejudice tothe right to take legal proceedings
(a) 16. Law applicable to the contract where
the parties do not have a free choiceor, where the parties are free tochoose the law applicable, the lawthe assurer proposes to choose
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B.During the term of the contract
In addition to the policy conditions, both general and special, the policy-holder must receive the
following information throughout the term of the contract.
Information about the assurance undertaking Information about the commitment
(b) 1. Any change in the name of the under-
taking, its legal form or the address ofits head office and, where appropriate,of the agency or branch whichconcluded the contract(b) 2. All the information listed in points (a)
(4) to (a) (12) of A in the event of achange in the policy conditions oramendment of the law applicable tothe contract
(b) 3. Every year, information on the state of
bonuses