1988L0357 — EN — 02.07.1992 — 002.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B SECOND COUNCIL DIRECTIVE
of 22 June 1988
on the coordination of laws, regulations and administrative provisions relating to direct insurance
other than life assurance and laying down provisions to facilitate the effective exercise of freedom
to provide services and amending Directive 73/239/EEC
(88/357/EEC)
(OJ L 172, 4.7.1988, p. 1)
Amended by:
Official Journal
No page date
►M1Council Directive 90/618/EEC of 8 November 1990 L 330 44 29.11.1990
►M2Council Directive 92/49/EEC of 18 June 1992 L 228 1 11.8.1992
NB: This consolidated version contains references to the European unit of account and/or the ecu, which from 1 January 1999
should be understood as references to the euro — Council Regulation (EEC) No 3308/80 (OJ L 345, 20.12.1980, p. 1) andCouncil Regulation (EC) No 1103/97 (OJ L 162, 19.6.1997, p. 1).
▼B
SECOND COUNCIL DIRECTIVE
of 22 June 1988
on the coordination of laws, regulations and administrative provi-
sions relating to direct insurance other than life assurance andlaying down provisions to facilitate the effective exercise of freedom
to provide services and amending Directive 73/239/EEC
(88/357/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Articles57 (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),
Whereas it is necessary to develop the internal insurance market and, to
achieve this objective, it is desirable to make it easier for insuranceundertakingshaving their head office in the Community to provideservices in the Member States, thus making it possible for policy-
holders to have recourse not only to insurers established in their own
country, but also to insurers which have their head office in theCommunity and are established in other Member States;
Whereas, pursuant to the Treaty, any discrimination with regard to
freedom to provide services based on the fact that an undertaking isnot established in the Member State in which the services are providedhas been prohibited since the end of the transitional period; whereasthis prohibition applies to services provided from any establishment inthe Community, whether it isthe head office of an undertaking or an
agency or branch;
Whereas, for practical reasons, it is desirable to define the provision of
services taking into account both the insurer's establishment and the
place where the risk is situated; whereas therefore a definition of the
situation of the risk should also be adopted; whereas, moreover, it isdesirable to distinguish between the activity pursued by way of estab-lishment and the activity pursued by way of freedom to provideservices;
Whereas it is desirable to supplement the First Council Directive 73/
239/EEC of 24 July 1973 on the coordination of laws, regulations andadministrative provisions relating to the taking-up and pursuit of thebusiness of direct insurance other than life assurance(
4), hereinafter
referred to as the ‘first Directive’, as last amended by Directive 87/
343/EEC(5), in order particularly to clarify the powersand meansof
supervision vested in the supervisory authorities; whereas it is alsodesirable to lay down specific provisions regarding the taking-up,pursuit and supervision of activity by way of freedom to provideservices;
Whereas policy-holders who, by virtue of their status, their size or the
nature of the risk to be insured, do not require special protection in theState in which the risk is situated should be granted complete freedom
to avail themselves of the widest possible insurance market; whereas,
moreover, it isdes irable to guarantee other policy-holdersadequateprotection;1988L0357 — EN — 02.07.1992 — 002.001 — 2
(1) OJ No C 32, 12. 2. 1976, p. 2.
(2) OJ No C 36, 13. 2. 1978, p. 14, OJ No C 167, 27. 6. 1988 and Decision of
15 June 1988 (not yet published in the Official Journal).
(3) OJ No C 204, 30. 8. 1976, p. 13.
(4) OJ No L 228, 16. 8. 1973, p. 3.
(5) OJ No L 185, 4. 7. 1987, p. 72.
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Whereasthe concern to protect policy-holdersand to avoid any dis tur-
bance of competition justifies coordinating the relaxation of thematching assets rules, provided for by the first Directive;
Whereas the provisions in force in the Member States regarding insur-
ance contract law continue to differ; whereasthe freedom to choos e, asthe law applicable to the contract, a law other than that of the State inwhich the risk is situated may be granted in certain cases, in accor-dance with rules taking into account specific circumstances;
Whereas the scope of this Directive should include compulsory insur-
ance but should require the contract covering such insurance to be in
conformity with the specific provisions relating to such insurance, asprovided by the Member State imposing the insurance obligation;
Whereas the provisions of the first Directive on the transfer of portfolio
should be reinforced and supplemented by provisions specificallycovering the transfer of the portfolio of contracts concluded for the
provision of services to another undertaking;
Whereas the scope of the provisions specifically concerning freedom to
provide services should exclude certain risks, the application to whichof the said provisions is rendered inappropriate at this stage by thespecific rules adopted by the Member States' authorities, owing to thenature and social implications of such provisions; whereas, therefore,
these exclusions should be re-examined after this Directive has been
in force for a certain period;
Whereas, in the interests of protecting policy-holders, Member States
should, at the present stage in coordination, be allowed the option oflimiting the simultaneous pursuit of activity by way of freedom toprovide services and activity by way of establishment; whereas no
such limitation can be provided for where policy-holders do not require
thisprotection;
Whereas the taking-up and pursuit of freedom to provide services
should be subject to procedures guaranteeing the insurance undertak-ing'scompliance with the provis ionsregarding both financialguarantees and conditions of insurance; whereas these procedures may
be relaxed in cases where the activity by way of provision of services
covers policy-holders who, by virtue of their status, their size or thenature of the risk to be insured, do not require special protection inthe State in which the risk is situated;
Whereas it is necessary to initiate special cooperation with regard to
freedom to provide services between the competent supervisory autho-ritiesof the Member Statesand between thes e authoritiesand the
Commission; whereas provision should also be made for a system of
penaltiesto apply where the undertaking providing the s ervice failstocomply with the provisions of the Member State of provision ofservice;
Whereas, pending future coordination, the technical reserves should be
subject to the rules and supervision of the Member State of provision
of services where such provision of services involves risks in respect of
which the State receiving the service wishes to provide special protec-tion for policy-holders; whereas, however, if such concern to protectthe policy-holders is unjustified, the technical reserves continue to besubject to the rules and supervision of the Member State in which the
insurer is established;
Whereas some Member States do not subject insurance transactions to
any form of indirect taxation, while the majority apply special taxesand other formsof contribution, including s urchargesintended forcompensation bodies; whereas the structure and rate of these taxesand contributionsvary cons iderably between the Member Statesin
which they are applied; whereas it is desirable to avoid a situation
where existing differences lead to disturbances of competition in insur-ance services between Member States; whereas, pending futureharmonization, the application of the tax system and of other forms ofcontributionsprovided for by the Member State in which the ris k issituated is likely to remedy such mischief and whereas it is for the1988L0357 — EN — 02.07.1992 — 002.001 — 3
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Member States to establish a method of ensuring that such taxes and
contributionsare collected;
Whereasit isdes irable to prevent the uncoordinated application of this
Directive and of Council Directive 78/473/EEC of 30 May 1978 on thecoordination of laws, regulations and administrative provisions relatingto Community co-insurance(
1) from leading to the existence of three
different systems in every Member State; whereas, therefore, the
criteria defining ‘large risks’ in this Directive should also define risks
likely to be covered under Community co-insurance arrangements;
Whereasit isdes irable to take into account, within the meaning of
Article 8C of the Treaty, the extent of the effort which needsto bemade by certain economiess howing differencesin development;
whereas, therefore, it is desirable to grant certain Member States transi-
tional arrangementsfor the gradual application of the s pecificprovisions of this Directive relating to freedom to provide services,
HAS ADOPTED THIS DIRECTIVE:
TITLE I
General provisions
Article 1
The object of thisDirective is :
(a) to supplement the first Directive 73/239/EEC;
(b) to lay down special provisions relating to freedom to provide
services for the undertakings and in respect of the classes of insur-ance covered by that first Directive.
Article 2
For the purposes of this Directive:
(a) ‘first Directive’ means:
Directive 73/239/EEC;
(b) ‘undertaking’:
— for the purposes of applying Titles I and II, means:
any undertaking which hasreceived official authorization under
Article 6 or 23 of the first Directive,
— for the purposes of applying Title III and Title V, means:
any undertaking which hasreceived official authorization under
Article 6 of the first Directive;
(c) ‘establishment’:
meansthe head office, agency or branch of an undertaking, account
being taken of Article 3;
(d) ‘Member State where the risk is situated’ means:
— the Member State in which the property iss ituated, where the
ins urance relateseither to buildingsor to buildingsand their
contents, in so far as the contents are covered by the sameinsurance policy,
— the Member State of registration, where the insurance relates to
vehiclesof any type,
— the Member State where the policy-holder took out the policy
in the case of policies of a duration of four months or less
covering travel or holiday risks, whatever the class concerned,
— the Member State where the policy-holder hashishabitual res i-
dence or, if the policy-holder isa legal pers on, the MemberState where the latter's establishment, to which the contract1988L0357 — EN — 02.07.1992 — 002.001 — 4
(1) OJ No L 151, 7. 6. 1978, p. 25.
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relates, is situated, in all cases not explicitly covered by the
foregoing indents;
(e) ‘Member State of establishment’ means:
the Member State in which the establishment covering the risk is
situated;
(f) ‘Member State of provision of services’ means:
the Member State in which the risk is situated when it is covered
by an establishment situated in another Member State.
Article 3
For the purposes of the first Directive and of this Directive, any perma-
nent presence of an undertaking in the territory of a Member State shallbe treated in the same way as an agency or branch, even if thatpresence does not take the form of a branch or agency, but consists
merely of an office managed by the undertaking'sown s taff or by a
person who is independent but has permanent authority to act for theundertaking asan agency would.
Article 4
For the purposes of this Directive and the first Directive, general and
special policy conditions shall not include specific conditions intendedto meet, in an individual case, the particular circumstances of the riskto be covered.
TITLE II
Provisions supplementary to the first Directive
Article 5
The following isadded to Article 5 of the firs t Directive:
‘(d) “large risks” means:
(i) risks classified under classes 4, 5, 6, 7, 11 and 12 of point
A of the Annex;
(ii) risks classified under classes 14 and 15 of point A of the
Annex, where the policy-holder is engaged professionally
in an industrial or commercial activity or in one of the
liberal professions, and the risks relate to such activity;
(iii) risks classified under classes 8, 9, 13 and 16 of point A of
the Annex in so far as the policy-holder exceeds the limitsof at least two of the following three criteria:
first stage: until 31 December 1992:
— balance-sheet total: 12,4 million ECU,
— net turnover: 24 million ECU,
— average number of employeesduring the financial
year: 500.
second stage: from 1 January 1993:
— balance-sheet total: 6,2 million ECU,
— net turnover: 12,8 million ECU,
— average number of employeesduring the financial
year: 250.
If the policy-holder belongsto a group of undertakingsfor
which consolidated accounts within the meaning of Direc-tive 83/349/EEC(
1) are drawn up, the criteria mentioned
above shall be applied on the basis of the consolidated
accounts.
Each Member State may add to the category mentioned
under (iii) risks insured by professional associations, jointventuresor temporary groupings .’1988L0357 — EN — 02.07.1992 — 002.001 — 5
(1) OJ No L 193, 18. 7. 1983, p. 1.
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Article 6
For the purposes of applying the first subparagraph of Article 15 (2)
and Article 24 of the first Directive, the Member States shall complywith Annex 1 to thisDirective asregardsthe matching rules .
Article 7
1. The law applicable to contractsof ins urance referred to by this
Directive and covering risks situated within the Member States is deter-
mined in accordance with the following provisions:
(a) Where a policy-holder hashishabitual res idence or central admin-
istration within the territory of the Member State in which the risk
is situated, the law applicable to the insurance contract shall be the
law of that Member State. However, where the law of that MemberState so allows, the parties may choose the law of another country.
(b) Where a policy-holder doesnot have hishabitual res idence or
central administration in the Member State in which the risk is situ-ated, the parties to the contract of insurance may choose to applyeither the law of the Member State in which the risk is situated or
the law of the country in which the policy-holder hashishabitual
residence or central administration.
(c) Where a policy-holder pursues a commercial or industrial activity
or a liberal profession and where the contract covers two or morerisks relating to these activities and situated in different MemberStates, the freedom of choice of the law applicable to the contract
shall extend to the laws of those Member States and of the country
in which the policy-holder hashishabitual res idence or centraladministration.
(d) Notwithstanding subparagraphs (b) and (c), where the Member
States referred to in those subparagraphs grant greater freedom ofchoice of the law applicable to the contract, the partiesmay takeadvantage of thisfreedom.
(e) Notwithstanding subparagraphs (a), (b) and (c), when the risks
covered by the contract are limited to eventsoccurring in one
Member State other than the Member State where the risk is situ-ated, asdefined in Article 2 (d), the partiesmay alwayschoos e thelaw of the former State.
(f) In the case of the risks referred to in Article 5 (d) of Directive 73/
239/EEC, the partiesto the contract may choos e any law.
(g) The fact that, in the cases referred to in subparagraph (a) or (f), the
parties have chosen a law shall not, where all the other elementsrelevant to the situation at the time of the choice are connectedwith one Member State only, prejudice the application of the
mandatory rulesof the law of that Member State, which means
the rulesfrom which the law of that Member State allowsno dero-gation by meansof a contract.
(h) The choice referred to in the preceding subparagraphs must be
expressed or demonstrated with reasonable certainty by the termsof the contract or the circumstances of the case. If this is not so,or if no choice hasbeen made, the contract s hall be governed by
the law of the country, from amongst those considered in the rele-
vant subparagraphs above, with which it is most closely connected.Nevertheless, a severable part of the contract which has a closerconnection with another country, from amongst those consideredin the relevant subparagraphs, may by way of exception be
governed by the law of that other country. The contract shall be
rebuttably presumed to be most closely connected with the MemberState in which the risk is situated.
(i) Where a State includes several territorial units, each of which has
itsown rulesof law concerning contractual obligations , each unitshall be considered as a country for the purposes of identifyingthe law applicable under thisDirective.1988L0357 — EN — 02.07.1992 — 002.001 — 6
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A Member State in which variousterritorial unitshave their own
rulesof law concerning contractual obligationss hall not be boundto apply the provisions of this Directive to conflicts which arise
between the laws of those units.
2. Nothing in this Article shall restrict the application of the rules of
the law of the forum in a situation where they are mandatory, irrespec-tive of the law otherwise applicable to the contract.
If the law of a Member State so stipulates, the mandatory rules of the
law of the Member State in which the risk is situated or of the MemberState imposing the obligation to take out insurance may be applied ifand in so far as, under the law of those States, those rules must beapplied whatever the law applicable to the contract.
Where the contract covers risks situated in more than one Member
State, the contract is considered for the purposes of applying this para-
graph as constituting several contracts each relating to only oneMember State.
3. Subject to the preceding paragraphs, the Member States shall
apply to the insurance contracts referred to by this Directive theirgeneral rulesof private international law concerning contractual obliga-tions.
Article 8
1. Under the conditions set out in this Article, insurance undertak-ings may offer and conclude compulsory insurance contracts inaccordance with the rulesof thisDirective and of the firs t Directive.
2. When a Member State imposes an obligation to take out insur-
ance, the contract shall not satisfy that obligation unless it is inaccordance with the specific provisions relating to that insurance laid
down by that Member State.
3. When, in the case of compulsory insurance, the law of the
Member State in which the risk is situated and the law of the Member
State imposing the obligation to take out insurance contradict eachother, the latter shall prevail.
4.
(a)Subjecttosubparagraph(c),thethirdsubparagraphofArticle7
(2)shallapplywheretheinsurancecontractprovidescoverin
twoormoreMemberStates,atleastoneofwhichmakesinsur-
ancecompulsory.
(c) A Member State may, by way of derogation from Article 7, lay
down that the law applicable to a compulsory insurance contract
isthe law of the State which impos esthe obligation to take outinsurance.
(d) Where a Member State imposes compulsory insurance and the
insurer must notify the competent authorities of any cessationof cover, such cessation may be invoked against injured thirdparties only in the circumstances laid down in the legislation ofthat State.
5. (a) Each Member State shall communicate to the Commission the
risks against which insurance is compulsory under its legislation,stating:
— the specific legal provisions relating to that insurance,
— the particularswhich mus t be given in the certificate which
an insurer must issue to an insured person where that State
requiresproof that the obligation to take out ins urance hasbeen complied with. A Member State may require that thoseparticularsinclude a declaration by the ins urer to the effectthat the contract complies with the specific provisionsrelating to that insurance.1988L0357 — EN — 02.07.1992 — 002.001 — 7
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(b) The Commission shall publish the particulars referred to in
subparagraph (a) in the Official Journal of the European
Communities .
(c) A Member State shall accept, as proof that the insurance obliga-
tion hasbeen fulfilled, a certificate, the content of which isinconformity with the second indent of subparagraph (a).
Article 9
1. The last subparagraph of Article 9 and the last subparagraph of
Article 11 (1) of the first Directive are replaced by the following:
‘However, the information referred to in (a) and (b) concerning the
general and special conditions and the scales of premiums shall not
be required in the case of risks referred to in Article 5 (d).’
2. Article 8 (3) and Article 10 (3) of the first Directive are replaced
by the following:
‘3. Thiscoordination s hall not prevent the Member Statesfrom
maintaining or introducing laws, regulations or administrative provi-sions concerning, in particular, the necessity for managers anddirectorsto be technically qualified and the approval of articlesofassociation, the general and special conditions of insurance policies,
the scales of premiums and any other document necessary for the
normal exercise of supervision.
However, with regard to the risks referrred to in Article 5 (d), Member
States shall not lay down provisions requiring the approval or
systematic notification of general and special policy conditions, scales
of premiums, or forms and other printed documents which the under-taking intends to use in its dealings with policy-holders. They mayrequire only non-systematic notification of these conditions and otherdocuments, for the purpose of verifying compliance with laws, regula-tions and administrative provisions in respect of such risks, and this
requirement may not constitute a prior condition for an undertaking to
be able to carry on itsactivities .
With regard to the risks referred to in Article 5 (d), Member States
may not retain or introduce prior notification or approval of proposed
increases in premium rates except as part of a general price control
system.
This coordination shall also not prevent Member States from subjecting
undertakings requesting or having obtained authorization for class 18 inpoint A of the Annex to checkson their direct or indirect res ourcesin
staff and equipment, including the qualification of their medical teams
and the quality of the equipment, available to the undertakingsto meettheir commitments arising from this class of insurance.’
Article 10
The following paragraph isadded to Article 19 of the firs t Directive:‘3. Each Member State shall take all steps necessary to ensure that
the authorities responsible for supervising insurance undertakings havethe powers and means necessary for supervision of the activities ofinsurance undertakings established within their territory, including
activitiesengaged in outs ide that territory, in accordance with the
Council Directives governing those activities and for the purpose ofseeing that they are implemented.
Those powers and means must, in particular, enable the supervisory
authoritiesto:
— make detailed inquiriesabout the undertaking'ss ituation and the
whole of its business, inter alia by:
— gathering information or requiring the submission of docu-
ments concerning insurance business,
— carrying out on-the-spot investigations at the undertaking's
premises,
— take any measures with regard to the undertaking which are
appropriate and necessary to ensure that the activities of the1988L0357 — EN — 02.07.1992 — 002.001 — 8
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undertaking remain in conformity with the laws, regulations and
administrative provisions with which the undertaking has tocomply in each Member State and in particular with the scheme
of operationsin s o far asit remainsmandatory, and to prevent,
or remove any irregularitiesprejudicial to the interes tsofpolicy-holders,
— ensure that measures required by the supervisory authorities are
carried out, if need be by enforcement, where appropriatethrough judicial channels.
Member States may also make provision for the supervisory authorities
to obtain any information regarding contractswhich are held by inter-
mediaries.’
Article 11
1. Article 21 of the first Directive is hereby deleted.
TITLE III
Provisions peculiar to the freedom to provide services
Article 12
1. This Title shall apply where an undertaking, through an establish-
ment situated in a Member State, covers a risk situated, within themeaning of Article 2 (d), in another Member State; the latter shall bethe Member State of provision of services for the purposes of this Title.
2. This Title shall not apply to the transactions, undertakings and
institutions to which the first Directive does not apply, nor to the risks
to be covered by the institutions under public law referred to in Article
4 of that Directive.
Article 12a
1. This Article shall apply where an undertaking, through an estab-
lishment situated in a Member State, covers a risk, other than carrier's
liability, classified under class 10 of point A of the Annex to Directive73/239/EEC which iss ituated in another Member State.
2. The Member State of provision of services shall require the
undertaking to become a member of and participate in the financingof itsnational bureau and itsnational guarantee fund.
The undertaking shall not, however, be required to make any payment
or contribution to the bureau and fund of the Member State of provi-sion of services in respect of risks covered by way of provision of
services other than one calculated on the same basis as for undertakings
covering risks, other than carrier's liability, in class 10 through anestablishment situated in that Member State, by reference to itspremium income from that class in that Member State or the numberof risks in that class covered there.
3. This Directive shall not prevent an insurance undertaking
providing services from being required to comply with the rules in theMember State of provision of services concerning the cover of aggra-
vated risks, insofar as they apply to established undertakings.
4. The Member State of provision of services shall require the
undertaking to ensure that persons pursuing claims arising out of eventsoccurring in its territory are not placed in a less favourable situation asa result of the fact that the undertaking is covering a risk, other thancarrier's liability, in class 10 by way of provision of services ratherthan through an establishment situated in that State.1988L0357 — EN — 02.07.1992 — 002.001 — 9
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For this purpose, the Member State of provision of services shall
require the undertaking to appoint a representative resident or estab-lished in its territory who shall collect all necessary information in
relation to claims, and shall possess sufficient powers to represent the
undertaking in relation to persons suffering damage who could pursueclaims, including the payment of such claims, and to represent it or,where necessary, to have it represented before the courts and authori-ties of that Member State in relation to these claims.
The representative may also be required to represent the undertaking
before the competent authorities of the State of provision of serviceswith regard to checking the existence and validity of motor vehicle
liability insurance policies.
The Member State of provision of services may not require that
appointee to undertake activitieson behalf of the undertaking whichappointed him other than those set out in the second and third subpar-
agraphs. The appointee shall not take up the business of direct
insurance on behalf of the said undertaking.
The appointment of the representative shall not in itself constitute the
opening of a branch or agency for the purpose of Article 6 (2) (b) of
Directive 73/239/EEC and the representative shall not be an establish-ment within the meaning of Article 2 (c) of thisDirective.
Article 14
Any undertaking that intends to carry on business for the first time in
one or more Member States under the freedom to provide services shall
first inform the competent authorities of the home Member State, indi-cating the nature of the risks it proposes to cover.
Article 16
1. Within one month of the notification provided for in Article 14,
the competent authoritiesof the home Member State s hall communi-
cate to the Member State or Member Stateswithin the territoriesofwhich an undertaking intends to carry on business under the freedomto provide services:
(a) a certificate attesting that the undertaking has the minimum
solvency margin calculated in accordance with Articles 16 and 17of Directive 73/239/EEC;
(b) the classes of insurance which the undertaking has been authorized
to offer;
(c) the nature of the risks which the undertaking proposes to cover in
the Member State of the provision of services.
At the same time, they shall inform the undertaking concerned accord-
ingly.
Each Member State within the territory of which an undertaking
intends, under the freedom to provide services, to cover risks in class10 of point A of the Annex to Directive 73/239/EEC other thancarrier'sliability may require that the undertaking:
— communicate the name and address of the representative referred to
in Article 12a (4) of thisDirective,
— produce a declaration that the undertaking hasbecome a member of
the national bureau and national guarantee fund of the MemberState of the provision of services.
2. Where the competent authoritiesof the home Member State do
not communicate the information referred to in paragraph 1 within theperiod laid down, they shall give the reasons for their refusal to theundertaking within that same period. That refusal shall be subject to aright to apply to the courtsin the home Member State.1988L0357 — EN — 02.07.1992 — 002.001 — 10
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3. The undertaking may start business on the certified date on which
it is informed of the communication provided for in the first subpara-graph of paragraph 1.
Article 17
Any change which an undertaking intendsin make to the information
referred to in Article 14 shall be subject to the procedure provided forin Articles14 and 16.
Article 26
1. The risks which may be covered by way of Community co-insur-
ance within the meaning of Directive 78/473/EEC shall be thosedefined in Article 5 (d) of the first Directive.
2. The provisions of this Directive regarding the risks defined in
Article 5 (d) of the first Directive shall apply to the leading insurer.
TITLE IV
Transitional arrangements
Article 27
1. Greece, Ireland, Spain and Portugal may apply the following tran-
sitional arrangements:
(i) until 31 December 1992, they may apply, to all risks, the regime
other than that for risks referred to in Article 5 (d) of the firstDirective,
(ii) from 1 January 1993 to 31 December 1994, the regime for large
risks shall apply to risks referred to under (i) and (ii) of Article 5
(d) of the first Directive; for risks referred to under (iii) of the
abovementioned Article 5 (d), these Member States shall fix thethresholds to apply therefor;
(iii)Spain
— from 1 January 1995 to 31 December 1996, the thresholds of
the first stage described in Article 5 (d) (iii) of the first Direc-tive shall apply,
— from 1 January 1997, the thresholds of the second stage shall
apply.
Portugal, Ireland and Greece— from 1 January 1995 to 31 December 1998 the thresholds of
the first stage described in Article 5 (d) (iii) of the first Direc-tive shall apply,
— from 1 January 1999 the thresholds of the second stage shall
apply.
The derogation allowed from 1 January 1995 shall only apply to
contracts covering risks classified under classes 3, 8, 9, 10, 13 and 16situated exclusively in one of the four Member States benefiting from
the transitional arrangements.
2. Until 31 December 1994, Article 26 (1) of thisDirective s hall not
apply to risks situated in the four Member States listed in this Article.
For the transitional period from 1 January 1995, the risks defined under
Article 5 (d) (iii) of the first Directive situated in these Member Statesand capable of being covered by Community co-insurance within themeaning of Directive 78/473/EEC shall be those which exceed thethresholds referred to in paragraph 1 (iii) of this Article.1988L0357 — EN — 02.07.1992 — 002.001 — 11
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TITLE V
Final provisions
Article 28
The Commission and the competent authorities of the Member States
shall collaborate closely for the purpose of facilitating the supervisionof direct insurance within the Community.
Every Member State shall inform the Commission of any major diffi-
cultiesto which application of thisDirective givesris e, inter alia any
arising if a Member State becomes aware of an abnormal transfer ofinsurance business to the detriment of undertakings established in itsterritory and to the advantage of branchesand agencieslocated jus tbeyond itsborders .
The Commission and the competent authorities of the Member States
concerned shall examine these difficulties as quickly as possible inorder to find an appropriate solution.
Where necessary, the Commission shall submit appropriate proposals to
the Council.
Article 29
The Commission shall forward to the Council regular reports, the first
on 1 July 1993, on the development of the market in insurance trans-acted under conditions of freedom to provide services.
Article 30
Where thisDirective makesreference to the ECU, the exchange value
in national currenciesto be us ed with effect from 31 December of eachyear shall be the value which applies on the last day of the precedingOctober for which exchange valuesfor the ECU are available in all
Community currencies.
Article 2 of Directive 76/580/EEC(
1) shall apply only to Articles 3, 16
and 17 of the first Directive.
Article 31
Every five years, the Council, acting on a proposal from the Commis-
sion, shall review and if necessary amend any amounts expressed inECU in thisDirective, taking into account changesin the economic
and monetary situation of the Community.
Article 32
Member States shall amend their national provisions to comply with
thisDirective within 18 monthsof the date of itsnotification(
2) and
shall forthwith inform the Commission thereof.
The provisions amended in accordance with this Article shall be
applied within 24 monthsof the date of the notification of the Direc-
tive.
Article 33
Upon notification of this Directive, Member States shall ensure that the
texts of the main laws, regulations or administrative provisions whichthey adopt in the field covered by thisDirective are communicated tothe Commission.
Article 34
The Annexess hall form an integral part of thisDirective.1988L0357 — EN — 02.07.1992 — 002.001 — 12
(1) OJ No L 189, 13. 9. 1976, p. 13.
(2) ThisDirective wasnotified to Member Stateson 30 June 1988.
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Article 35
This Directive is addressed to the Member States.1988L0357 — EN — 02.07.1992 — 002.001 — 13
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ANNEX 1
MATCHING RULES
The currency in which the insurer'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 particular
currency, the insurer's commitments are considered to be payable in that
currency.
2. Where the cover provided by a contract is not expressed in terms of any
currency, the insurer's commitments are considered to be payable in the
currency of the country in which the risk is situated. However, the insurer
may choose the currency in which the premium is expressed if there are
justifiable grounds for exercising such a choice.
Thiscould be the cas e if, from the time the contract isentered into, it
appearslikely that a claim will be paid in the currency of the premium and
not in the currency of the country in which the risk is situated.
3. The Member States may authorize the insurer to consider that the currency in
which he must provide cover will be either that which he will use in accor-
dance with experience acquired or, in the absence of such experience, the
currency of the country in which he is established:
— for contracts covering risks classified under classes 4, 5, 6, 7, 11, 12 and
13 (producers' liability only), and
— for contracts covering the risks classified under other classes where, in
accordance with the nature of the risks, the cover is to be provided in a
currency other than that which would result from the application of the
above procedures.
4. Where a claim has been reported to an insurer and is payable in a specified
currency other than the currency resulting from application of the above
procedures, the insurer's commitments shall be considered to be payable in
that currency, and in particular the currency in which the compensation to
be paid by the insurer has been determined by a court judgment or by agree-
ment between the insurer and the insured.
5. Where a claim is assessed in a currency which is known to the insurer in
advance but which isdifferent from the currency res ulting from application
of the above procedures, the insurers may consider their commitments to be
payable in that currency.
6. The Member Statesmay authorize undertakingsnot to cover their technical
reserves by matching assets if application of the above procedures would
result in the undertaking — whether head office or branch — being obliged,
in order to comply with the matching principle, to hold assets in a currency
amounting to not more than 7 % of the assets existing in other currencies.
However:
(a) in the case of technical reserve assets to be matched in Greek drachmas,
Irish pounds and Portuguese escudos, this amount shall not exceed:
— 1 million ECU during a transitional period ending 31 December
1992,
— 2 million ECU from 1 January 1993 to 31 December 1998;
(b) in the case of technical reserve assets to be matched in Belgian francs,
Luxembourg francs and Spanish pesetas, this amount shall not exceed 2
million ECU during a transitional period ending 31 December 1996.
From the end of the transitional periods defined under (a) and (b), the general
regime shall apply for these currencies, unless the Council decides otherwise.
7. The Member Statesmay choos e not to require undertakings— whether head
officesor branches— to apply the matching principle where commitments
are payable in a currency other than the currency of one of the Community
Member States, if investments in that currency are regulated, if the currency
is subject to transfer restrictions or if, for similar reasons, it is not suitable for
covering technical reserves.
8. Insurance undertakings may hold non-matching assets to cover an amount not
exceeding 20 % of their commitmentsin a particular currency.
9. A Member State may provide that when under the preceding proceduresa
commitment must be covered by assets expressed in a Member State's1988L0357 — EN — 02.07.1992 — 002.001 — 14
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currency that requirement shall also be considered as satisfied when the
assets are expressed in ecus.1988L0357 — EN — 02.07.1992 — 002.001 — 15
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ANNEX 2A
Underwriting account
1. Total gross premiums earned
2. Total cost of claims3. Commission costs
4. Gross underwriting result1988L0357 — EN — 02.07.1992 — 002.001 — 16
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ANNEX 2B
Underwriting account
1. Gross premiums for the last underwriting year
2. Gross claims in the last underwriting year (including reserve at the end of
underwriting year)
3. Commission costs
4. Gross underwriting result1988L0357 — EN — 02.07.1992 — 002.001 — 17