1979L0267 — EN — 20.11.1990 — 003.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B FIRSTCOUNCILDIRECTIVE
of5March1979
onthecoordinationoflaws,regulationsandadministrativeprovisionsrelatingtothetakingupand
pursuitofthebusinessofdirect lifeassurance
(79/267/EEC)
(OJ L 63, 13.3.1979, p. 1)
Amended by:
Official Journal
No page date
►M1Council Directive 90/619/EEC of 8 November 1990 L 330 50 29.11.1990
Amended by:
►A1Act of Accession of Greece L 291 17 19.11.1979
►A2Act of Accession of Spain and Portugal L 302 23 15.11.1985
▼B
FIRSTCOUNCILDIRECTIVE
of5March1979
on the coordination of laws, regulations and administrative
provisions relating to the taking up and pursuit of the business of
directlife assurance
(79/267/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Articles 49 and 57 thereof,
Having regard to the proposal from the Commission(1),
Having regard to the opinion of the European Parliament(2),
Having regard to the opinion of the Economic and Social Committee(3),
Whereas, in order to facilitate the taking up and pursuit of the business
of life assurance, it is essential to eliminate certain divergences whichexist between national supervisory legislation; whereas, in order toachieve this objective and at the same time ensure adequate protectionfor policy-holders and beneficiaries in all Member States, the provisions
relating to the financial guarantees required of life assurance under-
takings should be coordinated;
Whereas a classification by class of insurance is necessary in order to
determine, in particular, the activities subject to compulsory authoriza-tion;
Whereas certain mutual associations which, by virtue of their legal
status, fulfil requirements as to security and other specific financial
guarantees should be excluded from the scope of this Directive; whereas
certain organizations whose activity covers only a very restricted sectorand is limited by their articles of association should also be excluded;
Whereas the Member States have different regulations and practices as
to the simultaneous carrying on of life assurance and non-life insurance;whereas newly formed undertakings should no longer be authorized tocarry on these two activities simultaneously; whereas Member States
should be allowed to permit existing undertakings which carry on these
activities simultaneously to continue to do so provided that separatemanagement is adopted for each of their activities, in order that therespective interests of life policy-holders and non-life policy-holders aresafeguarded and the minimum financial obligations in respect of one of
the activities are not borne by the other activity; whereas, when one of
the undertakings wishes to establish itself in a Member State to pursuelife assurance in that State, it should set up a subsidiary for that purpose,which may be eligible on a transitional basis for certain facilities;whereas, Member States should be given the option of requiring thoseexisting undertakings established in their territory which carry on life
assurance and non-life insurance simultaneously to put an end to this
practice; whereas, moreover, specialized undertakings should be subjectto special supervision where a non-life undertaking belongs to the samefinancial group as a life undertaking;
Whereas life assurance is subject to official authorization and super-
vision in each Member State; whereas the conditions for the granting or
withdrawal of such authorization should be defined; whereas provision
must be made for the right to apply to the courts should an authorizationbe refused or withdrawn;
Whereas, as regards technical reserves, including mathematical reserves,
the same rules may be adopted as in the case of non-life insurance,namely, they must be localized in the country where activities arecarried on and the rules of that country are to govern the methods of1979L0267 — EN — 20.11.1990 — 003.001 — 2
(1) OJ No C 35, 28. 3. 1974, p. 9.
(2) OJ No C 140, 13. 11. 1974, p. 44.
(3) OJ No C 109, 19. 9. 1974, p. 1.
▼B
calculation, the determination of investment categories and the valuation
of assets; whereas, although it is desirable that these various subjectsshould be coordinated, this is not essential for the purposes of this
Directive and may be carried out subsequently;
Where it is necessary that, over and above technical reserves, including
mathematical reserves, of sufficient amount to meet their underwriting
liabilites, insurance undertakings should possess a supplementary
reserve, known as the solvency margin, represented by free assets and,with the agreement of the supervisory authority, by other implicit assets,in order to provide against business fluctuations; whereas, in order toensure that the requirements imposed for such purposes are determined
according to objective criteria whereby undertakings of the same size
will be placed on an equal footing as regards competition, it is desirableto provide that this margin shall be related to all the commitments of theundertaking and to the nature and gravity of the risks presented by thevarious activities falling within the scope of the Directive; whereas thismargin should therefore vary according to whether the risks are of
investment, death or management only; whereas it should accordingly be
determined in terms of mathematical reserves and capital at riskunderwritten by an undertaking, of premiums or contributions received,of reserves only or of the assets of tontines;
Whereas it is necessary to require a guarantee fund, the amount and
composition of which are such as to provide an assurance that theundertakings possess adequate resources when they are set up and that inthe subsequent course of business the solvency margin in no event falls
below aminimum of security; wherea s the whole or aspecified pa rt of
this guarantee fund must consist of explicit asset items;
Whereas it is necessary to provide for measures in cases where the
financial position of the undertaking becomes such that it is difficult for
it to meet its underwriting liabilities;
Whereas the coordinated rules concerning the pursuit of the business of
direct insurance within the Community should, in principle, apply to all
undertakings operating on the market and, consequently, also to
agencies and branches where the head office of the undertaking issituated outside the Community; whereas it is nevertheless desirable asregards the methods of supervision to lay down special provisions forsuch agencies or branches, in view of the fact that the assets of the
undertakings to which they belong are situated outside the Community;
Whereas it is desirable to provide for the conclusion of reciprocal
agreements with one or more third countries in order to permit the
relaxation of such special conditions, while observing the principle that
such agencies and branches should not obtain more favourable treatmentthan Community undertakings;
Whereas certain transitional provisions are required in order, in
particular, to permit small and medium-sized undertakings already inexistence to adapt themselves to the requirements to be introduced bythe Member States in pursuance of this Directive, subject to Article 53of the Treaty applying;
Whereas Article 52 of the EEC Treaty has been directly applicable since
the end of the transitional period; whereas since that time there hasaccordingly been no need for the adoption of Directives abolishingrestrictions on the freedom of establishment; whereas, however, the
provisions concerning proof of good repute and no previous bankruptcy
contained in Council Directive 73/240/EEC of 24 July 1973, abolishingrestrictions on freedom of establishment in the business of directinsurance other than life assurance(
1) do not strictly speaking constitute
restrictions and are also required in life assurance; whereas they shouldaccordingly be included in this coordination Directive;
Whereas it is important to guarantee the uniform application of the
coordinated rules and to provide accordingly for close collaborationbetween the Commission and the Member States in this field,1979L0267 — EN — 20.11.1990 — 003.001 — 3
(1) OJ No L 228, 16. 8. 1973, p. 20.
▼B
HAS ADOPTED THIS DIRECTIVE:
TITLE I
GENERALPROVISIONS
Article 1
This Directive concerns the taking up and pursuit of the self-employed
activity of direct insurance carried on by undertakings which areestablished in a Member State or wish to become established there in theform of the activities defined below:
1. The following kinds of insurance where they are on a contractual
basis:
(a) life assurance, that is to say, the class of insurance which
comprises, in particular, assurance on survival to a stipulated ageonly, assurance on death only, assurance on survival to astipulated age or on earlier death, life assurance with return ofpremiums, marriage assurance, birth assurance;
(b) annuities;
(c) supplementary insurance carried on by life assurance under-
takings, that is to say, in particular, insurance against personal
injury including incapacity for employment, insurance againstdeath resulting from an accident and insurance against disabilityresulting from an accident or sickness, where these various kindsof insurance are underwritten in addition to life assurance;
(d) the type of insurance existing in Ireland and the United Kingdom
known as permanent health insurance not subject to cancellation.
2. The following operations, where they are on a contractual basis, in so
far as they are subject to supervision by the administrative authorities
responsible for the supervision of private insurance and areauthorized in the country concerned:
(a) tontines whereby associations of subscribers are set up with a
view to jointly capitalizing their contributions and subsequentlydistributing the assets thus accumulated among the survivors or
among the beneficiaries of the deceased;
(b) capital redemption operations based on actuarial calculation
whereby, in return for single or periodic payments agreed inadvance, commitments of specified duration and amount are
undertaken;
(c) management of group pension funds, i.e. operations consisting,
for the undertaking concerned, in managing the investments, andin particular the assets representing the reserves of bodies that
effect payments on death or survival or in the event of
discontinuance or curtailment of activity;
(d) the operations referred to in (c) where they are accompanied by
insurance covering either conservation of capital or payment of a
minimum interest;
(e) the operations carried out by insurance companies such as those
referred to in Chapter 1, Title 4 of Book IV of the French ‘Codedes assurances’.1979L0267 — EN — 20.11.1990 — 003.001 — 4
▼B
3. Operations relating to the length of human life which are prescribed
by or provided for in social insurance legislation, when they areeffected or managed at their own risk by assurance undertakings in
accordance with the laws of a Member State.
Article 2
This Directive shall not concern:1. subject to the application of Article 1 (1) (c) of this Directive, the
classes designated in the Annex to 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(
1), hereinafter
referred to as ‘the first coordination Directive (non-life insurance)’;
2. operations of provident and mutual-benefit institutions whose
benefits vary according to the resources available and which require
each of their members to contribute at the appropriate flat rate;
3. operations carried out by organizations other than undertakings
referred to in Article 1, whose object is to provide benefits foremployed or self-employed persons belonging to an undertaking orgroup of undertakings, or a trade or group of trades, in the event of
death or survival or of discontinuance or curtailment of activity,
whether or not the commitments arising from such operations arefully covered at all times by mathematical reserves;
4. subject to the application of Article 1 (3), insurance forming part of a
statutory system of social security.
Article 3
This Directive shall not concern:
1. organizations which undertake to provide benefits solely in the event
of death, where the amount of such benefits does not exceed theaverage funeral costs for a single death or where the benefits are
provided in kind;
2. mutual associations, where:
— the articles of association contain provisions for calling up
additional contributions or reducing their benefits or claimingassistance from other persons who have undertaken to provide it,and
— the annual contribution income for the activities covered by this
Directive does not exceed 500 000 units of account for threeconsecutive years. If this amount is exceeded for threeconsecutive years this Directive shall apply with effect from thefourth year.
Article 4
This Directive shall not concern the ‘Versorgungsverband deutscher
Wirtschaftsorganisationen’ in Germany or the ‘Caisse d'épargne del'État’ in Luxembourg unless their statutes are amended as regards thescope of their activities.
Article 5
For the purposes of this Directive:
(a) ‘unit of account’ means the European unit of account (EUA) as
defined by Article 10 of the Financial Regulation of 21 December1977 applicable to the general budget of the European Commu-
nities(
2); wherever this Directive refers to the unit of account, the
conversion value in national currency to be adopted shall as from 31December of each year be that of the last day of the preceding1979L0267 — EN — 20.11.1990 — 003.001 — 5
(1) OJ No L 228, 16. 8. 1973, p. 3.
(2) OJ No L 356, 31. 12. 1977, p. 1.
▼B
month of October for which EUA conversion values are available in
all the Community currencies;
(b) ‘matching assets’ means the representation of underwriting liabil-
ities which can be required to be met in a particular currency byassets expressed or realisable in the same currency;
(c) ‘localization of assets’ means the existence of assets, whether
movable or immovable, within a Member State but shall not be
construed as involving a requirement that movable assets be
deposited or that immovable assets be subjected to restrictivemeasures such as the registration of mortgages; assets represented byclaims against debtors shall be regarded as situated in the MemberState where they are realizable;
(d) ‘capital at risk’ means the amount payable on death less the
mathematical reserve for the main risk.
TITLE II
RULES APPLICABLE TO UNDERTAKINGS WHOSE HEAD OFFICES
ARESITUATEDWITHINTHECOMMUNITY
Section A
Conditionsofadmission
Article 6
1. Each Member State shall make the taking up of the activities
referred to in this Directive in its territory subject to an officialauthorization.
2. Such authorization shall be sought from the competent authority of
the Member State in question by:
(a) any undertaking which establishes its head office in the territory of
such State;
(b) any undertaking whose head office is situated in another Member
State and which opens an agency or branch in the territory of theMember State in question;
(c) any undertaking which, having received the authorization required
under (a) or (b) above, extends its business in the territory of suchState to other classes;
(d) any undertaking which, having obtained, in accordance with Article
7 (1), an authorization for a part of the national territory, extends its
activity beyond such part.
3. Member States shall not make authorization subject to the lodging
of adeposit or the provision of security.
Article 7
1. An authorization shall be valid for the entire national territory
unless, and in so far as national laws permit, the applicant seekspermission to carry on his business only in a part of the nationalterritory.
2. Authorization shall be given for a particular class of insurance. The
classification by class appears in the Annex. Authorization shall cover
the entire class unless the applicant wishes to cover only part of the riskspertaining to such class.
The supervisory authorities may restrict an authorization requested for
one of the classes to the operations set out in the scheme of operations
referred to in Articles 9 and 11.
3. Each Member State may grant an authorization for two or more of
the classes, where its national laws permit such classes to be carried onsimultaneously.1979L0267 — EN — 20.11.1990 — 003.001 — 6
▼B
Article 8
1. Each Member State shall require any undertaking setting up in its
territory for which an 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 par actions» — „vennootschap bij wijze vangeldschieting op aandelen”,«association d'assurance mutuelle»
— „onderlinge verzekeringsmaatschappij”, «société coopéra-
tive» — „coöperatieve vennootschap”,
— in the case of the Kingdom of Denmark:
‘aktieselskaber’ ,
‘gensidige selskaber’ ,
— in the case of the Federal Republic of Germany:
‘Aktiengesellschaft’, ‘Versicherungsverein auf Gegenseitigkeit’ ,
‘öffentlich-rechtliches Wettbewerbs-Versicherungsunternehmen’ ,
— in the case of the Hellenic Republic:
‘ανώνυµη εταιρία ’,
— in the case of the French Republic:
‘société anonyme’, ‘société à forme mutuelle à cotisations fixes’ ,
‘société à forme tontinière’ ,
— in the case of Ireland:
incorporated companies limited by shares or by guarantee or
unlimited, societies registered under the Industrial and Provident
Societies Acts and societies registered under the Friendly
Societies Acts,
— in the case of the Italian Republic:
‘società per azioni’, ‘società cooperativa’, ‘mutua di assicur-
azione’and public-law institutions within the meaning of Article
1883 of the Civil Code.
— in the case of the Grand Duchy of Luxembourg:
‘société anonyme’, ‘société en commandite par actions’,
‘association d'assurances mutuelles’, ‘société coopérative’ ,
— in the case of the Kingdom of the Netherlands:
‘naamloze vennootschap’, ‘onderlinge waarborgmaatschappij’ ,
— in the case of the United Kingdom:
incorporated companies limited by shares or by guarantee or
unlimited, societies registered under the Industrial and ProvidentSocieties Acts, societies registered under the Friendly SocietiesActs, the association of underwriters known as Lloyd's;
— in the case of the Kingdom of Spain:
‘sociedad anónima’, ‘sociedad mutua’ ,
— in the case of the Portuguese Republic:
‘sociedade anónima’ .
Furthermore, Member States may set up, where appropriate,
undertakings under any form of known public law or its equivalent
provided that such institutions have as their object to carry on
insurance operations under conditions equivalent to those ofundertakings under private law;
(b) limit its business activities to the activities referred to in this
Directive and operations directly arising therefrom, to the exclusion
of all other commercial business;
(c) submit a scheme of operations in accordance with Article 9;
(d) possess the minimum of the guarantee fund provided for in Article
20 (2).1979L0267 — EN — 20.11.1990 — 003.001 — 7
▼A1
▼B
▼A2
▼B
▼B
2. An undertaking seeking an authorization to extend its business to
other classes or, in the case referred to in Article 6 (2) (d), to anotherpart of the territory, shall be required to submit a scheme of operations
in accordance with the provisions of Article 9 as regards such other
classes or other part of the territory.
It shall, in addition, be required to show proof that it possesses the
minimum solvency margin provided for in Article 19 and the guarantee
fund referred to in Article 20 (1) and (2).
3. The present coordinating measures shall not prevent Member
States from applying provisions requiring directors and managers to
have technical qualifications or from requiring the memorandum and
articles of association, the general and special policy conditions, thetechnical bases for calculating in particular premium rates and reservesreferred to in Article 17 and any other document necessary for thenormal exercise of supervision to be approved.
4. The abovementioned provisions may not require that any
application for an authorization shall be dealt with in the light of theeconomic requirements of the market.
Article 9
The scheme of operations referred to in Article 8 (1) (c) and (2) shall
contain the following particulars or evidence of cover:
(a) the nature of the commitments which the undertaking proposes to
cover; the general and special policy conditions which it proposes touse;
(b) the technical bases that the undertaking proposes to employ for each
class of business, including the data needed to calculate premium
rates and reserves referred to in Article 17;
(c) the guiding principles as to reinsurance;
(d) the items constituting the minimum of the guarantee fund;
(e) estimates relating to the expenses of installing the administrative
services and the organization for securing business and the financial
resources intended to cover them;and, in addition, shall include forthe first three financial years:
(f) a forecast balance sheet;
(g) a plan setting out detailed estimates of income and expenditure in
respect of direct business, reinsurance acceptances and reinsurance
cessions;
(h) estimates relating to the financial resources intended to cover
underwriting liabilities and the solvency margin.
Article 10
1. Each Member State shall require that an undertaking having its
head office in the territory of another Member State and seeking anauthorization to open an agency or branch shall:
(a) submit its memorandum and articles of association and a list of its
directors and managers;
(b) produce a certificate issued by the competent authorities of the head
office Member State, attesting the classes of insurance which theundertaking is entitled to cover and that it possesses the minimum ofthe guarantee fund or if higher, the minimum solvency margincalculated in accordance with Article 19 and stating the classes of
insurance which it actually underwrites and the financial resources
referred to in Article 11 (1) (e);
(c) submit a scheme of operations in accordance with Article 11;
(d) designate a general representative having his permanent residence
and abode in the host country and possessing sufficient powers tobind the undertaking in relation to third parties and to represent it inrelations with the authorities and courts of the host country; if therepresentative has a legal personality, it must have its head office in1979L0267 — EN — 20.11.1990 — 003.001 — 8
▼B
the host country and it must in its turn designate an individual to
represent it who complies with the above conditions. The designatedrepresentative shall not be objected to by the Member State except
on grounds relating to repute or technical qualifications such as
apply to directors or managers of undertakings whose head officesare situated in the territory of the State in question.
2. Each Member State shall require that for the purpose of extending
the business of the agency or branch, either to other classes or to otherparts of the national territory in the case provided for in Article 6 (2) (d),
the applicant for the authorization shall submit a scheme of operations in
accordance with Article 11 and comply with the conditions contained inparagraph 1 (b) of this Article.
3. The present coordinating measures shall not prevent Member
States from enforcing provisions requiring, for all insurance under-takings, approval of the general and special policy conditions, of thetechnical bases for calculating in particular premium rates and reserves
referred to in Article 17 and of any other document necessary for the
normal exercise of supervision.
4. The abovementioned provisions may not require that any
application for authorization shall be examined in the light of theeconomic requirements of the market.
Article 11
1. The scheme of operations of the agency or branch referred to in
Article 10 (1) (c) and (2) shall contain the following particulars orevidence of:
(a) the nature of the commitments which the undertaking proposes to
take on in the host country; the general and special policy conditions
which it proposes to use;
(b) the technical bases which the undertaking proposes to employ for
each class of business, including the data needed to calculatepremium rates and reserves referred to in Article 17;
(c) the guiding principles as to reinsurance;
(d) the state of the undertaking's solvency margin and guarantee fund
referred to in Articles 18, 19 and 20;
(e) estimates relating to the expenses of installing the administrative
services and the organization for securing business and the financialresources intended to cover them;and, in addition shall include, forthe first three financial years:
(f) a forecast balance sheet for the agency or branch;
(g) a plan setting out detailed estimates of income and expenditure in
respect of direct business, reinsurance acceptances and reinsurance
cessions.
2. The scheme of operations shall be accompanied by the balance
sheet and profit and loss account of the undertaking for each of the pastthree financial years. If, however, it has not yet been in business forthree financial years it shall be required to furnish them only for thefinancial years completed.
3. The scheme of operations, together with the observations of the
authorities competent to issue authorization, shall be forwarded to the
competent authorities of the head-office Member State. The latterauthorities shall communicate their opinion to the former within threemonths from the receipt of the documents; if their opinion has not beencommunicated upon the expiry of this time, it shall be deemed to be
favourable.
Article 12
Any decision to refuse an authorization shall be accompanied by the
precise grounds for doing so and notified to the undertaking in question.1979L0267 — EN — 20.11.1990 — 003.001 — 9
▼B
Each Member State shall make provision for a right to apply to the
courts should there be any refusal.
Such provision shall also be made with regard to cases where the
competent authorities have not dealt with an application for an
authorization upon the expiry of a period of six months from the dateof its receipt.
Article 13
1. Subject to paragraph 3, no undertaking may simultaneously carry
on in a Member State the activities referred to in the Annex to the first
coordination Directive (non-life insurance) and those listed in Article 1
of this Directive.
2. Where an undertaking carrying on the activities referred to in the
Annex to the first coordination Directive (non-life insurance) hasfinancial, commercial or administrative links with an undertakingcarrying on the activities covered by this Directive, the supervisory
authorities of the Member States in whose territory the head offices of
those undertakings are situated shall ensure that the accounts of theundertakings in question are not distorted by agreements between theseundertakings or by any arrangement which could affect the apportion-ment of expenses and income.
3. Subject to paragraph 6, undertakings which at the time of
notification of this Directive carry on simultaneously in a MemberState both of the activities referred to in paragraph 1 may continue to doso there provided that each activity is separately managed in accordancewith Article 14.
4. The undertakings referred to in paragraph 3 may set up agencies or
branches in the other Member States only for the classes listed in the
Annex to the first coordination Directive (non-life insurance).
5. The undertakings referred to in paragraph 3 may, by setting up
subsidiaries in other Member States to carry on the activities referred toin this Directive, avail themselves of the conditions and facilities laiddown in Article 35 for a transitional period of 10 years from the date of
notification of this Directive, provided they do not already have an
agency or branch carrying on in such Member States any activities otherthan those covered by this Directive.
6. (a) Any Member State may require undertakings whose head offices
are established in its territory to cease, within a period to be
determined by the Member State concerned, the simultaneous
pursuit of activities in which they were engaged at the time ofnotification of this Directive.
(b) After consulting the supervisory authority of the head office
Member State, particularly in regard to the period within which
such action must take place, any Member State may also imposethis requirement on agencies or branches established in itsterritory which simultaneously carry on both activities there.
(c) Agencies and branches of the undertakings referred to in
paragraph 3 which, at the time of notification of this Directive,are engaged in the territory of a Member State solely in theactivities covered by this Directive may continue their activitiesthere. If the undertaking wishes to carry on the activities covered
by the first coordination Directive (non-life insurance) in that
territory it may only carry on the activities mentioned in thisDirective through asubsidia ry.
Article 14
1. The separate management referred to in Article 13 (3) must be
organized in such a way that the activities covered by this Directive are
distinct from the activities covered by the first coordination Directive
(non-life insurance) in order that:
— the respective interests of life policy-holders and non-life policy-
holders are not prejudiced and, in particular, that profits from life1979L0267 — EN — 20.11.1990 — 003.001 — 10
▼B
assurance benefit life policy-holders as if the undertaking only
carried on the activity of life assurance,
— the minimum financial obligations, in particular solvency margins, in
respect of one or other of the two activities, namely an activity under
this Directive and an activity under the first coordination Directive
(non-life insurance) are not borne by the other activity.
However, as long as the minimum financial obligations are fulfilled
under the conditions laid down in the second indent of the firstsubparagraph and, provided the competent authority is informed, theundertaking may use those explicit items of the solvency margin which
are still available for one or other activity.
The supervisory authorities shall analyze the results in both activities so
as to ensure that the provisions of this paragraph are complied with.
2. (a) Accounts shall be drawn up in such a manner as to show the
sources of the results for each of the two activities, life assurance
and non-life insurance. To this end all income (in particular
premiums, payments by re-insurers and investment income) andexpenditure (in particular insurance settlements, additions totechnical reserves, reinsurance premiums, operating expenses inrespect of insurance business) shall be broken down according toorigin. Items common to both activities shall be entered in
accordance with methods of apportionment to be accepted by the
competent supervisory authority.
(b) Undertakings must, on the basis of the accounts, prepare a
statement clearly identifying the items making up each solvency
margin, in accordance with Article 18 of this Directive andArticle 16 (1) of the first coordination Directive (non-lifeinsurance).
3. If one of the solvency margins is insufficient, the supervisory
authorities shall apply to the deficient activity the measures provided for
in the relevant Directive, whatever the results in the other activity. By
way of derogation from the second indent of the first subparagraph ofparagraph 1, these measures may involve the authorization of a transferfrom one activity to the other.
Section B
Conditionsforcarrying onactivities
Article 15
Member States shall collaborate closely with one another in supervising
the financial position of authorized undertakings.
Article 16
The supervisory authority of the Member State in whose territory the
head office of the undertaking is situated must verify the state ofsolvency of the undertaking with respect to its entire business. Thesupervisory authorities of the other Member States shall provide theformer with all the information necessary to enable such verification to
be effected.
Article 17
1. Each Member State in whose territory activities are carried on by
an undertaking shall require the undertaking to establish sufficienttechnical reserves, including mathematical reserves.
The amount of the technical reserves, including mathematical reserves,
shall be determined according to the rules fixed by the Member State, or,
in the absence of such rules, according to the established practices insuch State.
2. Technical reserves, including mathematical reserves, shall be
required to be covered by equivalent and matching assets localized ineach country where activities are carried on. Member States may,1979L0267 — EN — 20.11.1990 — 003.001 — 11
▼B
however, permit relaxations in the rules as to matching assets and the
localization of assets. Relaxations of the rule on matching assets shalltake account of the characteristics of life assurance which is primarily a
form of capital and long-term insurance.
Having regard to its special position, Luxembourg may, pending
coordination of legislation on the winding-up of undertakings, retain itssystem of guarantees for technical reserves, including mathematical
reserves, existing at the date of notification of this Directive.
The regulations of the country where activities are carried on shall
determine the nature of such assets and, where appropriate, the extent towhich they may be used for the purpose of covering the technical
reserves, including mathematical reserves, and shall also determine the
rules for valuing such assets.
Compliance with these regulations may be ensured by the intervention
of aperson or institution from outside the underta king with
responsibility for verifying on the spot whether the assets representing
technical reserves, including mathematical reserves, comply with theregulations. This shall be the function of, in particular, the ‘Treuhänder’in Germany and of the ‘tillidsmand’ in Denmark.
3. If a Member State allows any technical reserves, including
mathematical reserves, to be covered by claims against re-insurers, it
shall fix the percentage so allowed. In such case, it may not require theassets representing such claims to be localized in its territory,notwithstanding the provisions of paragraph 2.
4. The supervisory authority of the Member State in whose territory
the head office of an undertaking is situated shall verify that its balancesheet shows in respect of the technical reserves, including mathematicalreserves, assets equivalent to the underwriting liabilities assumed in allthe countries where it carries on activities.
Article 18
Each Member State shall require of every undertaking whose head office
is situated in its territory an adequate solvency margin in respect of itsentire business.
The solvency margin shall consist of:
1. the assets of the undertaking, free of all foreseeable liabilities, less
any intangible items; in particular the following shall be included:
— the paid-up share capital or, in the case of a mutual concern, the
paid-up amount of its fund,
— one half of the unpaid-up share capital or fund once 25 % of such
capital or fund are paid up,
— statutory reserves and free reserves not corresponding to under-
writing liabilities,
— any carry-forward of profits;
2. in so far as authorized under national law, profit reserves appearing in
the balance sheet where they may be used to cover any losses whichmay arise and where they have not been made available for
distribution to policy-holders;
3. upon application, with supporting evidence, by the undertaking to the
supervisory authority of the Member State in the territory of which its
head office is situated and with the agreement of that authority:
(a) an amount equal to 50 % of the undertaking's future profits; the
amount of the future profits shall be obtained by multiplying the
estimated annual profit by a factor which represents the average
period left to run on policies; the factor used may not exceed 10;the estimated annual profit shall be the arithmetical average ofthe profits made over the last five years in the activities listed inArticle 1.
The bases for calculating the factor by which the estimated
annual profit is to be multiplied and the items comprising theprofits made shall be defined by common agreement by the1979L0267 — EN — 20.11.1990 — 003.001 — 12
▼B
competent authorities of the Member States in collaboration with
the Commission. Pending such agreement, those items shall bedetermined in accordance with the laws of the Member State in
the territory of which the undertaking (head office, agency or
branch) carries on its activities.
When the competent authorities have defined the concept of
profits made, the Commission shall submit proposals for the
harmonization of this concept by means of a Directive on the
harmonization of the annual accounts of insurance undertakingsand providing for the coordination set out in Article 1 (2) ofDirective 78/660/EEC(
1);
(b) where Zillmerizing is not practised or where, if practised, it is
less than the loading for acquisition costs included in the
premium, the difference between a non-Zillmerized or partiallyZillmerized mathematical reserve and a mathematical reserveZillmerized at a rate equal to the loading for acquisition costsincluded in the premium; this figure may not, however, exceed
3·5 % of the sum of the differences between the relevant capital
sums of life assurance activities and the mathematical reservesfor all policies for which Zillmerizing is possible; the differenceshall be reduced by the amount of any undepreciated acquisitioncosts entered as an asset;
(c) where approval is given by the supervisory authorities of the
Member States concerned in which the undertaking is carrying onits activities any hidden reserves resulting from the under-estimation of assets and over-estimation of liabilities other thanmathematical reserves in so far as such hidden reserves are not of
an exceptional nature.
Article 19
Subject to Article 20, the minimum solvency margin shall be determined
as shown below according to the classes of insurance underwritten:
(a) For the kinds of insurance referred to in Article 1 (1) (a) and (b)
other than assurances linked to investment funds and for the
operations referred to in Article 1 (3), it must be equal to the sum ofthe following two results:
— first result:
a 4 % fraction of the mathematical reserves, relating to direct
business gross of re-insurance cessions and to re-insurance
acceptances shall be multiplied by the ratio, for the last financial
year, of the total mathematical reserves net of re-insurancecessions to the gross total mathematical reserves as specifiedabove; that ratio may in no case be less than 85 %;
— second result:
for policies on which the capital at risk is not a negative figure, a
0·3 % fraction of such capital underwritten by the undertakingshall be multiplied by the ratio, for the last financial year, of thetotal capital at risk retained as the undertaking's liability after re-insurance cessions and retrocessions to the total capital at riskgross of re-insurance; that ratio may in no case be less than 50 %.
For temporary assurance on death of a maximum term of three years
the above fraction shall be 0·1 %; for such assurance of a term of
more than three years but not more than five years the above fractionshall be 0·15 %.
(b) For the supplementary insurance referred to in Article 1 (1) (c), it
shall be equal to the result of the following calculation:
— the premiums or contributions (inclusive of charges ancillary to
premiums or contributions) due in respect of direct business inthe last financial year in respect of all financial years shall beaggregated;1979L0267 — EN — 20.11.1990 — 003.001 — 13
(1) OJ No L 222, 14. 8. 1978, p. 11.
▼B
— to this aggregate there shall be added the amount of premiums
accepted for all reinsurance in the last financial year;
— from this sum shall then be deducted the total amount of
premiums or contributions cancelled in the last financial year aswell as the total amount of taxes and levies pertaining to the
premiums or contributions entering into the aggregate.
The amount so obtained shall be divided into two portions, the first
extending up to 10 million units of account and the secondcomprising the excess; 18 % and 16 % of these portions respectively
shall be calculated and added together.
The result shall be obtained by multiplying the sum so calculated by
the ratio existing in respect of the last financial year between theamount of claims remaining to be borne by the undertaking after
deduction of transfers for reinsurance and the gross amount of
claims; this ratio may in no case be less than 50 %.
In the case of the assocation of underwriters known as Lloyd's, the
calculation of the solvency margin shall be made on the basis of net
premiums, which shall be multiplied by flat-rate percentage fixed
annually by the supervisory authority of the head-office MemberState. This flat-rate percentage must be calculated on the basis of themost recent statistical data on commissions paid. The detailstogether with the relevant calculations shall be sent to thesupervisory authorities of the countries in whose territory Lloyd's
is established.
(c) For permanent health insurance not subject to cancellation referred
to in Article 1 (1) (d), and for capital redemption operations referredto in Article 1 (2) (b), it shall be equal to a 4 % fraction of the
mathematical reserves calculated in compliance with the conditions
set out in the first result in (a) of this Article.
(d) For tontines, referred to in Article 1 (2) (a), it shall be equal to 1 %
of their assets.
(e) For assurances covered by Article 1 (1) (a) and (b) linked to
investment funds and for the operations referred to in Article 1 (2)(c), (d) and (e) it shall be equal to:
— a 4 % fraction of the mathematical reserves, calculated in
compliance with the conditions set out in the first result in (a) ofthis Article in so far as the undertaking bears an investment risk,and a 1 % fraction of the reserves calculated in the fashion, in sofar as the undertaking bears no investment risk provided that theterm of the contract exceeds five years and the allocation to
cover management expenses set out in the contract is fixed for a
period exceeding five years
plus
— a 0·3 % fraction of the capital at risk calculated in compliance
with the conditions set out in the first subparagraph of the second
result of (a) of this Article in so far as the undertaking covers adeath risk.
Article 20
1. One third of the minimum solvency margin as specified in Article
19 shall constitute the guarantee fund. Subject to paragraph 2, at least50 % of this fund shall consist of the items listed in Article 18 (1) and(2).
2. (a) The guarantee fund may not, however, be less than a minimum of
800 000 units of account.
(b) Any Member State may provide for the minimum of the
guarantee fund to be reduced to 600 000 units of account in thecase of mutual associations and mutual-type associations and
tontines.
(c) For mutual associations referred to in the second sentence of the
second indent of Article 3 (2), as soon as they come within thescope of this Directive, and for tontines, any Member State maypermit the establishment of a minimum of the guarantee fund of1979L0267 — EN — 20.11.1990 — 003.001 — 14
▼B
100 000 units of account to be increased progressively to the
amount fixed in (b) by successive tranches of 100 000 units ofaccount whenever the contributions increase by 500 000 units of
account.
(d) The minimum of the guarantee fund referred to in (a), (b) and (c)
must consist of the items listed in Article 18 (1) and (2).
3. Mutual associations wishing to extend their business within the
meaning of Article 8 (2) or Article 10 may not do so unless they complyimmediately with the requirements of paragraph 2 (a) and (b) of this
Article.
Article 21
1. Member States shall not prescribe any rules as to the choice of the
assets in excess of those representing the reserves referred to in Article
17.
2. Subject to Article 17 (2), Article 24 (1) and (3) and the last
subparagraph of Article 26 (1), Member States shall not restrain the freedisposal of assets, whether movable or immovable, forming part of theassets of authorized undertakings.
3. This Article shall not preclude any measures which Member
States, while observing the rules prevailing in countries where activitiesare carried on as required under Article 17 (2) and while safeguardingthe interests of policy-holders, are entitled to take as owners or members
or associates of the undertakings in question.
Article 22
1. Member States may not require undertakings to cede part of their
underwriting of activities listed in Article 1 to an organization or
organizations designated by national regulations.
2. The Italian Republic shall take all steps to ensure that the
requirement that undertakings established in its territory cede part of
their underwriting to the ‘Istituto Nazionale di Assicurazioni’ isabolished no later than 20 November 1994.
Article 23
1. Each Member State shall require every undertaking whose head
office is situated in its territory to produce an annual account, covering
all types of operation, of its financial situation and solvency.
2. Member States shall require undertakings carrying on activities in
their territory to render periodically the returns, together with statisticaldocuments, which are necessary for the purposes of supervision. Thecompetent supervisory authorities shall furnish each other with the
documents and information necessary for exercising supervision.
3. Each Member State shall take all steps necessary to ensure that the
authorities responsible for supervising assurance undertakings have thepowers and means necessary for supervision of the activities ofassurance undertakings established within their territory, includingactivities engaged in outside that territory, in accordance with theCouncil Directives governing those activities and for the purpose of
ensuring that they are implemented.
Those powers and meanst must, in particular, enable the supervisory
authorities to:
— make detailed inquires about the undertaking's situation and the
whole of its business, inter alia by:
— gathering information or requiring the submission of documents
concerning assurance business,
— carrying out on-the-spot investigations at the undertaking's
premises,1979L0267 — EN — 20.11.1990 — 003.001 — 15
▼M1
▼B
▼M1
▼M1
— take any measures, with regard to the undertaking, which are
appropriate and necessary to ensure that the activities of theundertaking remain in conformity with the laws, regulations and
administrative provisions with which the undertaking has to comply
in each Member State and in particular with the scheme ofoperations insofar as it remains mandatory, and to prevent orremove any irregularities prejudicial to the interests of policyholders,
— ensure that measures required by the supervisory authorities are
carried out, if need be by enforcement, where appropriate through
judicial channels.
Member States may also make provision for the supervisory authorities
to obtain any information regarding contracts which is held by
intermediaries.
Article 24
1. If an undertaking does not comply with the provisions envisaged in
Article 17, the supervisory authority of the Member State in whoseterritory it carries on its activity may prohibit the free disposal of assetslocalized in that Member State after having informed the supervisory
authorities of the head-office Member State of its intention.
2. For the purposes of restorting the financial situation of an
undertaking whose solvency margin has fallen below the minimumrequired under Article 19, the supervisory authority of the head-office
Member State shall require a plan for the restoration of a sound financial
position to be submitted for its approval.
3. If the solvency margin falls below the guarantee fund as defined in
Article 20, or if the latter is no longer constituted as laid down in that
Article, the supervisory authority of the head-office Member State shall
require the undertaking to submit a short-term finance scheme for itsapproval.
It may also restrict or prohibit the free disposal of the assets of the
undertaking. It shall inform the authorities of other Member States in
whose territories the undertaking is authorized of any measures and thelatter shall, at the request of the former, take the same measures.
4. The competent supervisory authorities may further take all
measures necessary to safeguard the policy-holders' interests in the
cases provided for in paragraphs 1 and 3.
5. The supervisory authorities of other Member States in whose
territory the undertaking in question has also been authorized shallcollaborate for the purpose of implementing the provisions referred to in
paragraphs 1 to 4.
Section C
Withdrawalofauthorization
Article 26
1. The authorization granted by the competent authority of the
Member State in whose territory the head office is situated may bewithdrawn by such authority if the undertaking:
(a) no longer fulfils the conditions of admission;
(b) has been unable, within the time allowed, to take the measures
contained in the restoration plan or finance scheme referred to in
Article 24;
(c) fails seriously in its obligations under the national regulations.
In the event of the withdrawal of the authorization, the supervisory
authority of the head-office Member State shall notify such withdrawalto the supervisory authorities of other Member States which have1979L0267 — EN — 20.11.1990 — 003.001 — 16
▼B
▼M1
▼B
▼B
authorized the undertaking; they shall, thereupon, also withdraw their
authorization. The supervisory authority of the head-office MemberState shall, in conjunction with such other authorities, take all necessary
measures to safeguard policy-holders' interests and, in particular, shall
restrict the free disposal of the assets of the undertaking if suchrestriction has not been already imposed in accordance with theprovisions of the second subparagraph of Article 24 (1) and (3).
2. An authorization granted to an agency or branch of an undertaking
whose head office is situated in another Member State may be
withdrawn if the agency or branch:
(a) no longer fulfils the conditions for admission;
(b) fails seriously in its obligations under the regulations of the Member
State where it carries on its activity, with respect in particular to theestablishment of reserves referred to in Article 17.
Before withdrawing authorization the supervisory authorities of the
Member State where the activity is carried on shall consult the
supervisory authority of the Member State where the head office is
situated. If they deem it necessary to suspend the business of suchagency or branch before consultation is concluded, they shallimmediately advise the supervisory authority of the country where thehead office is situated.
3. Any decision to withdraw authorization or suspend business shall
be supported by precise reasons and notified to the undertaking in
question.
Each Member State shall make provision for a right to apply to the
courts against such a decision.
TITLE III A
RULES APPLICABLE TO AGENCIES OR BRANCHES ESTABLISHED
WITHIN THE COMMUNITY AND BELONGING TO UNDERTAKINGS
WHOSEHEADOFFICESAREOUTSIDETHECOMMUNITY
Article 27
1. Each Member State shall make access to the activities referred to
in Article 1 by any undertaking whose head office is outside theCommunity subject to an official authorization.
2. A Member State may grant an authorization if the undertaking
fulfils at least the following conditions:
(a) it is entitled to undertake insurance activities covered by Article 1
under its national law;
(b) it establishes an agency or branch in the territory of such Member
State;
(c) it undertakes to establish at the place of management of the agency
or branch accounts specific to the activity which it carries on thereand to keep there all the records relating to the business transacted;
(d) it designates a general representative, to be approved by the
competent authorities;
(e) it possesses in the Member State where it carries on an activity
assets of an amount equal in value to at least one half of the
minimum amount prescribed in Article 20 (2) (a) in respect of theguarantee fund and deposits one fourth of the minimum amount assecurity;
(f) it undertakes to keep a solvency margin complying with Article 29;
(g) it submits a scheme of operations in accordance with Article 11 (1)
and (2).1979L0267 — EN — 20.11.1990 — 003.001 — 17
▼M1
▼B
▼B
Article 28
Member States shall require undertakings to establish reserves, referred
to in Article 17, adequate to cover the underwriting liabilities assumed intheir territories. Member States shall see that the agency or branch
covers such reserves by means of assets which are equivalent to such
reserves and, to the extent fixed by the Member State in question,matching assets.
The law of the Member States shall be applicable to the calculation of
such reserves, the determination of categories of investment and thevaluation of assets, and, where appropriate, the determination of theextent to which these assets may be used for the purpose of covering
such reserves.
The Member State in question shall require that the assets covering these
reserves, shall be localized in its territory. Article 17 (3) shall, however,apply.
Article 29
1. Each Member State shall require of agencies or branches set up in
its territory asolvency ma rgin consisting of the items listed in Article18. The minimum solvency margin shall be calculated in accordancewith Article 19. However, for the purpose of calculating this margin,account shall be taken only of the operations effected by the agency orbranch concerned.
2. One third of the minimum solvency margin shall constitute the
guarantee fund.
However, the amount of this fund may not be less than one half of the
minimum required under Article 20 (2) (a). The initial deposit lodged in
accordance with Article 27 (2) (e) shall be counted towards suchguarantee fund.
The guarantee fund and the minimum of such fund shall be constituted
in accordance with Article 20.
3. The assets representing the minimum solvency margin must be
kept within the Member State where activities are carried on up to theamount of the guarantee fund and the excess within the Community.
Article 30
1. Any undertaking which has requested or obtained authorization
from more than one Member State may apply for the followingadvantages which may be granted only jointly:
(a) the solvency margin referred to in Article 29 shall be calculated in
relation to the entire business which it carries on within the
Community; in such case, account shall be taken only of the
operations effected by all the agencies or branches establishedwithin the Community for the purposes of this calculation;
(b) the deposit required under Article 27 (2) (e) shall be lodged in only
one of those Member States;
(c) the assets representing the guarantee fund shall be localized in any
one of the Member States in which it carries on its activities.
2. Application to benefit from the advantages provided for in
paragraph 1 shall be made to the competent authorities of the MemberStates concerned. The application must state the authority of theMember State which in future is to supervise the solvency of the entire
business of the agencies or branches established within the Community.
Reasons must be given for the choice of authority made by theundertaking. The deposit shall be lodged with that Member State.
3. The advantages provided for in paragraph 1 may only be granted if
the competent authorities of all Member States in which an applicationhas been made agree to them. They shall take effect from the time whenthe selected supervisory authority informs the other supervisory1979L0267 — EN — 20.11.1990 — 003.001 — 18
▼B
authorities that it will supervise the state of solvency of the entire
business of the agencies or branches within the Community.
The supervisory authority selected shall obtain from the other Member
States the information necessary for the supervision of the overallsolvency of the agencies and branches established in their territory.
4. At the request of one or more of the Member States concerned, the
advantages granted under this Article shall be withdrawn simultaneously
by all Member States concerned.
Article 31
1. (a) Subject to point (b), agencies and branches referred to in this
Title may not simultaneously carry on in a Member State theactivities referred to in the Annex to the first coordination
Directive (non-life insurance) and those covered by this
Directive.
(b) Subject to point (c), Member States may provide that agencies
and branches referred to in this Title which at the time ofnotification of this Directive carry on both activities simulta-
neously in a Member State may continue to do so there provided
that each activity is separately managed in accordance withArticle 14.
(c) Any Member State which under Article 13 (6) (a) and (b) requires
undertakings established in its territory to cease the simultaneouspursuit of the activities in which they are engaged at the time of
notification of this Directive must also impose this requirement
on agencies and branches referred to in this Title which areestablished in its territory and simultaneously carry on bothactivities there.
(d) Member States may provide that agencies and branches referred
to in this Title whose head office simultaneously carries on both
activities and which at the time of notification of this Directivecarry on in the territory of a Member State solely the activitycovered by this Directive may continue their activity there. If theundertaking wishes to carry on the activity referred to in the firstcoordination Directive (non-life insurance) in that territory it may
only carry on the activity covered by this Directive through a
subsidiary.
2. Articles 23 and 24 shall apply mutatis mutandis to agencies and
branches referred to in this Title.
For the purposes of applying Article 24, the supervisory authority which
supervises the overall solvency of agencies or branches shall be treatedin the same way as the supervisory authority of the head-office MemberState.
3. In the case of a withdrawal of authorization by the authority
referred to in Article 30 (2), this authority shall notify the supervisoryauthorities of the other Member States where the undertaking operates
and the latter authorities shall take the appropriate measures. If the
reason for the withdrawal of authorization is the inadequacy of thesolvency margin calculated in accordance with Article 30 (1) (a), thesupervisory authorities of the other Member States concerned shall alsowithdraw their authorizations.
Article 32
The Community may, by means of agreements concluded pursuant to
the Treaty with one or more third countries, agree to the application ofprovisions different from those provided for in this Title, for the purposeensuring, under conditions of reciprocity, adequate protection for policy-holders in the Member States.1979L0267 — EN — 20.11.1990 — 003.001 — 19
▼M1
TITLE III B
RULES APPLICABLE TO SUBSIDIARIES OF PARENT UNDERTAK-
INGS GOVERNED BY THE LAWS OF A THIRD COUNTRY AND TO
ACQUISITIONSOFHOLDINGSBYSUCHPARENTUNDERTAKINGS
Article 32a
The competent authorities of the Member States shall inform the
Commission:
(a) of any authorization of a direct of indirect subsidiary one or more
parent undertakings of which are governed by the laws of a third
country. The Commission shall inform the Committee referred to in
Article 32b (6) accordingly;
(b) whenever such a parent undertaking acquires a holding in a
Community insurance undertaking which would turn the latter intoits subsidiary. The Commission shall inform the Committee referredto in Article 32b (6) accordingly.
When authorization is granted to the direct or indirect subsidiary of one
or more parent undertakings governed by the law of third countries, thestructure of the groupe shall be specified in the notification which thecompetent authorities shall address to the Commission.
Article 32b
1. The Member States shall inform the Commission of any general
difficulties encountered by their insurance undertakings in establishingthemselves or carrying on their activities in a third country.
2. Initially no later than six months before the date referred to in the
second paragraph of Article 30 of Directive 90/619/EEC(
1), and
thereafter periodically, the Commission shall draw up a report
examining the treatment accorded to Community insurance undertakings
in third countries, in the terms referred to in paragraphs 3 and 4, asregards establishment and the carrying on of insurance activities, and theacquisition of holdings in third-country insurance undertakings. TheCommission shall submit those reports to the Council, together with anyappropriate proposals.
3. Whenever it appears to the Commission, either on the basis of the
reports referred to in paragraph 2 or on the basis of other information,that a third country is not granting Community insurance undertakingseffective market access comparable to that granting Community to
insurance undertakings effective market access comparable to that
granted by the Community to insurance undertakings from that thirdcountry, the Commission may submit proposals to the Council for theappropriate mandate for negotiation with a view to obtaining compar-able competitive opportunities for Community insurance undertakings.
The Council shall decide by a qualified majority.
4. Whenever it appears to the Commission, either on the basis of the
reports referred to in paragraph 2 or on the basis of other information,that Community insurance undertakings in a third country are not
receiving national treatment offering the same competitive opportunities
as are available to domestic insurance undertakings and that theconditions of effective market access are not being fulfilled, theCommission may initiate negotiations in order to remedy the situation.
In the circumstances described in the first subparagraph, it may also be
decided at any time, and in addition to initiating negociations, inaccordance with the procedure laid down in Article 32b (6), that thecompetent authorities of the Member States must limit or suspend theirdecisions:
— regarding requests pending at the moment of the decision or future
requests for authorizations, and1979L0267 — EN — 20.11.1990 — 003.001 — 20
(1) OJ No L 330, 29. 11. 1990, p. 50.
▼M1
— regarding the acquisition of holdings by direct or indirect parent
undertakings governed by the laws of the third country in question.
The duration of the measures referred to may not exceed three months.Before the end of that three-month period, and in the light of the results
of the negotiations, the Council may, acting on a proposal from the
Commission, decide by a qualified majority whether the measures shall
be continued.
Such limitations or suspension may not apply to the setting up of
subsidiaries by insurance undertakings or their subsidiaries dulyauthorized in the Community, or to the acquisition of holdings inCommunity insurance undertakings by such undertakings or subsidi-
aries.
5. Whenever it appears to the Commission that one of the situations
described in paragraphs 3 and 4 has arisen, the Member States shallinform it at its request:
(a) of any request for the authorization of a direct or indirect subsidiary
one or more parent undertakings of which are governed by the lawsof the third country in question;
(b) of any plans for such an undertaking to acquire a holding in a
Community insurance undertaking such that the latter would becomethe subsidiary of the former.
This obligation to provide information shall lapse whenever an
agreement is reached with the third country referred to in paragraph 3or 4 when the measures referred to in the second and third
subparagraphs of paragraph 4 cease to apply.
6. The Commission shall be assisted by a committee composed of the
representatives of the Member States and chaired by the representativeof the Commission.
The representative of the Commission shall submit to the committee a
draft of the measures to be taken. The committee shall deliver itsopinion on the draft within a time limit which the chairman may laydown according to the urgency of the matter. The opinion shall be
delivered by the majority laid down in Article 148 (2) of the Treaty in
the case of decisions which the Council is required to adopt on aproposal from the Commission. The votes of the representatives of theMember States within the committee shall be weighted in the manner setout in that Article. The chairman shall not vote.
The Commission shall adopt the measures envisaged if they are in
accordance with the opinion of the committee.
If the measures envisaged are not in accordance with the opinion of the
committee, or if no opinion is delivered, the Commission shall, without
delay, submit to the Council a proposal relating to the measures to betaken. The Council shall act by a qualified majority.
If, on the expiry of a period to be laid down in each act to be adopted by
the Council under this paragraph but which may in no case exceed threemonths from the date of referral to the Council, the Council has not
acted, the proposed measures shall be adopted by the Commission, save
where the Council has decided against the said measures by a simplemajority.
7. Measures taken under this Article shall comply with the
Community's obligations under any international agreements, bilateralor multilateral, governing the taking-up and pursuit of the business ofinsurance undertakings.1979L0267 — EN — 20.11.1990 — 003.001 — 21
▼B
TITLE IV
TRANSITIONALANDOTHERPROVISIONS
Article 33
1. Member States shall allow undertakings referred to in Title II
which at the entry into force of the implementing measures to thisDirective provide insurance in their territories in one or more of theclasses referred to in the Annex, a period of five years from the date of
notification of this Directive in order to comply with Articles 18, 19 and
20.
2. Furthermore, Member States may:
(a) allow any undertakings referred to in paragraph 1, which upon the
expiry of the five-year period have not fully established the solvencymargin, a further period not exceeding two years in which to do soprovided that such undertakings have, in accordance with Article 24,submitted for the approval of the supervisory authority the measureswhich they propose to take for such purpose;
(b) except for the mutual associations referred to in the second sentence
of the second indent of Article 3 (2), exempt undertakings referredto in paragraph 1 of this Article, for which upon the expiry of thefive-year period the solvency margin to be established pursuant toArticle 19 without deduction for re-insurance does not reach the
minimum of the guarantee fund referred to in Article 20 (2) (a) and
(b), from the requirement to establish this fund before the end of thefinancial year in respect of which the solvency margin referred toreaches this minimum amount.
The maximum period thus granted to these undertakings to establish
this minimum amount shall in no case exceed 10 years from the dateof notification of this Directive.
3. Undertakings desiring to extend their business within the meaning
of Article 8 (2) or 10 may not do so unless they comply immediatelywith the rules of this Directive.
4. Undertakings having a structure different from any of those listed
in Article 8 may continue, for a period of three years from thenotification of this Directive, to carry on their present business in the
legal form in which they are constituted at the time of such notification.
Undertakings set up in the United Kingdom by Royal Charter or byprivate Act or by special Public Act may carry on their activity in theirpresent form for an unlimited period.
The Member States in question shall draw up a list of such undertakings
and communicate it to the other Member States and the Commission.
5. Undertakings which, in accordance with their objects, carry on the
activities of life assurance and savings operations may continue to carryon such activities, with the exception of savings operations, which must
cease within three years from the date of notification of this Directive.
As an exception, the ‘Caisse générale d'épargne et de retraite (CGER)’/‘Algemene Spoor- en Lifrentekas (ASLK)’ in Belgium, the societiesregistered under the Friendly Societies Acts in the United Kingdom andthe ‘Banca nazionale delle communicazioni’ in Italy may continue the
activities they were carrying on when the Directive was notified.
6. Undertakings which carry on simultaneously both activities in
accordance with the terms of Article 13 shall have a period of five years
from the date of notification of this Directive to comply with theprovisions of Article 14.
7. At the request of undertakings which comply with the require-
ments of Articles 17 to 20, Member States shall cease to apply anyrestrictive measures such as those relating to mortgages, deposits orsecurities established under their present regulations.1979L0267 — EN — 20.11.1990 — 003.001 — 22
▼B
Article 34
Member States shall allow agencies or branches referred to in Title III
which, at the entry into force of the implementing measures to thisDirective, are carrying on one or more classes referred to in Annex I andwhich do not extend their business within the meaning of Article 10 (2),
a maximum period of five years from the date of notification of this
Directive in order to comply with the conditions in Article 29.
Article 35
Where subsidiaries are set up in accordance with Article 13 (5), half the
minimum of the guarantee fund may take the form of an irrevocablefinancial guarantee from the parent company, subject to the following
requirements:
(a) at least 95 % of the subsidiary's share capital must be held by the
parent company;
(b) unpaid-up share capital may not be used to constitute that half of the
minimum of the guarantee fund which is not covered by theirrevocable financial guarantee; and
(c) the financial requirements of both the first coordination Directive
(non-life insurance) and this Directive must be met by the parentcompany, the funds corresponding to the amount of the guarantee
not being considered as part of its free assets.
Subsidiaries may benefit from this arrangement for a period of seven
years as from the date when it is granted. During this period, and from
the third year onwards at the latest, subsidiaries must progressivelyreplace the parent company's guarantee by free assets; subsidiaries shallsubmit a plan to this effect to the competent supervisory authority for itsagreement together with their request for authorization.
Article 36
During a period which terminates at the time of the entry into force of an
agreement concluded with a third country pursuant to Article 32, and atthe latest upon the expiry of a period of four years after the notificationof this Directive, each Member State may retain for undertakings of thatcountry established in its territory the rules applied to them on 1 January1979 in respect of matching assets and the localization of technical
reserves, including mathematical reserves, provided that notification is
given to the other Member States and the Commission and that the limitsof relaxations granted pursuant to Article 17 (2) in favour of theundertakings of Member States established in its territory are notexceeded.
Article 37
1. Where a Member State requires of its own nationals proof of good
repute and proof of no previous bankruptcy, or proof of either of these,that State shall accept as sufficient evidence in respect of nationals ofother Member States the production of an extract from the ‘judicialrecord’ or, failing this, of an equivalent document issued by a competent
judicial or administrative authority in the Member State of origin or the
Member State whence the foreign national comes showing that theserequirements have been met.
2. Where the Member State of origin or the Member State whence the
foreign national concerned comes does not issue the document referredto in paragraph 1, it may be replaced by a declaration on oath — or inStates where there is no provision for declaration on oath by a solemndeclaration — made by the person concerned before a competent
judicial or administrative authority or, where appropriate, a notary in the
Member State of origin or the Member State whence that person comes;such authority or notary shall issue a certificate attesting the authenticityof the declaration on oath or solemn declaration. The declaration inrespect of no previous bankruptcy may also be made before a competentprofessional or trade body in the said country.1979L0267 — EN — 20.11.1990 — 003.001 — 23
▼B
3. Documents issued in accordance with paragraphs 1 and 2 must not
be produced more than three months after their date of issue.
4. Member States shall, within the time limit of 18 months from the
date of notification of this Directive, designate the authorities and bodiescompetent to issue the documents referred to in paragraphs 1 and 2 shallforthwith inform the other Member States and the Commission thereof.
Within the same time limit, each Member State shall also inform the
other Member States and the Commission of the authorities or bodies towhich the documents referred to in this Article are to be submitted insupport of an application to carry on in the territory of this MemberState the activities referred to in Article 1.
TITLE V
FINALPROVISIONS
Article 38
The Commission and the competent authorities of the Member States
shall collaborate closely for the purpose of facilitating supervision ofdirect insurance within the Community and of examining any difficultieswhich might arise in the application of this Directive.
Article 39
1. The Commission shall submit to the Council, within six years from
the date of notification of this Directive, a report dealing with the effectsof the financial requirements imposed by this Directive on the situation
in the insurance markets of the Member States. If necessary, the
Commission shall submit interim reports to the Council before the endof the transitional period provided for in Article 33 (1).
2. Following a period of 10 years from the notification of this
Directive, the Commission shall submit to the Council a report dealing
with the operations of the two types of undertakings covered by this
Directive: that is to say, those undertakings which carry onsimultaneously the activity covered by the first coordination Directive(non-life insurance) in addition to the activity covered by this Directiveand those undertakings which carry on only the activity covered by this
Directive.
3. The Council, acting on a proposal from the Commission, shall
every two years examine and, where appropriate, review the amountsexpressed in units of account in this Directive, in the light of how theCommunity's economic and monetary situation has evolved. The
Commission shall submit its first proposal in this connection to the
Council at the time as a proposal concerning non-life insurance, as laiddown in Article 3 of Directive 76/580/EEC(
1), and not later than four
years after the date of notification of this Directive.
Article 40
Member States shall amend their national provisions to comply with this
Directive within 18 months of its notification and shall forthwith informthe Commission thereof. The provisions thus amended shall, subject toArticles 33 to 36, be applied within 30 months from the date ofnotification.
Article 41
Following notification of this Directive, Member States shall commu-
nicate the texts of the main provisions of a legislative, regulatory oradministrative nature which they adopt in the field covered by thisDirective to the Commission.1979L0267 — EN — 20.11.1990 — 003.001 — 24
(1) OJ No L 189, 13. 7. 1976, p. 13.
▼B
Article 42
This Directive is addressed to the Member States.1979L0267 — EN — 20.11.1990 — 003.001 — 25
▼B
ANNEX
Classesofinsurance
I. The assurance referred to in Article 1 (1) (a), (b) and (c) excluding those
referred to in II and III
II. Marriage assurance, birth assurance
III. The assurance referred to in Article 1 (1) (a) and (b), which are linked to
investment funds
IV. Permanent health insurance, referred to in Article 1 (1) (d)
V. Tontines, referred to in Article 1 (2) (a)
VI. Capital redemption operations, referred to in Article 1 (2) (b)
VII. Management of group pension funds, referred to in Article 1 (2) (c) and (d)
VIII. The operations referred to in Article 1 (2) (e)
IX. The operations referred to in Article 1 (3)1979L0267 — EN — 20.11.1990 — 003.001 — 26