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This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B FIRST COUNCIL DIRECTIVE
of 5 March 1979
on the coordination of laws, regulations and administrative provisions relating to the taking up
and pursuit of the business of direct life assurance
(79/267/EEC)
(OJ L 63, 13.3.1979, p. 1)
Amended by:
Official Journal
No page date
►A1Act of Accession of Greece L 291 17 19.11.1979
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FIRST COUNCIL DIRECTIVE
of 5 March 1979
on the coordination of laws, regulations and administrative provi-
sionsrelatingtothetakingupandpursuitofthebusinessofdirect
life 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 provisionsrelating to the financial guarantees required of life assurance undertak-ings 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 financialguarantees should be excluded from the scope of this Directive; whereascertain 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 Statesshould be allowed to permit existing undertakings which carry on theseactivities 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 ofthe activities are not borne by the other activity; whereas, when one ofthe undertakings wishes to establish itself in a Member State to pursuelife assurance in that State, it should set up a subsidiary for thatpurpose, which may be eligible on a transitional basis for certainfacilities; whereas, Member States should be given the option ofrequiring those existing undertakings established in their territory whichcarry on life assurance and non-life insurance simultaneously to put anend to this practice; whereas, moreover, specialized undertakings shouldbe subject to special supervision where a non-life undertaking belongsto the same financial group as a life undertaking;
Whereas life assurance is subject to official authorization and supervi-
sion in each Member State; whereas the conditions for the granting orwithdrawal of such authorization should be defined; whereas provisionmust 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 are
(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.
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carried on and the rules of that country are to govern the methods of
calculation, the determination of investment categories and the valuationof assets; whereas, although it is desirable that these various subjectsshould be coordinated, this is not essential for the purposes of thisDirective 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 underwritingliabilites, insurance undertakings should possess a supplementaryreserve, 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 determinedaccording to objective criteria whereby undertakings of the same sizewill 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 ofinvestment, death or management only; whereas it should accordinglybe 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 thatin the subsequent course of business the solvency margin in no eventfalls below a minimum of security; whereas the whole or a specifiedpart 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 forit 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 allundertakings operating on the market and, consequently, also to agen-cies and branches where the head office of the undertaking is situatedoutside the Community; whereas it is nevertheless desirable as regardsthe methods of supervision to lay down special provisions for suchagencies or branches, in view of the fact that the assets of the undertak-ings 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 therelaxation of such special conditions, while observing the principle thatsuch agencies and branches should not obtain more favourable treat-ment than Community undertakings;
Whereas certain transitional provisions are required in order, in partic-
ular, to permit small and medium-sized undertakings already in exis-tence to adapt themselves to the requirements to be introduced by theMember States in pursuance of this Directive, subject to Article 53 ofthe Treaty applying;
Whereas Article 52 of the EEC Treaty has been directly applicable
since the end of the transitional period; whereas since that time therehas accordingly been no need for the adoption of Directives abolishingrestrictions on the freedom of establishment; whereas, however, theprovisions concerning proof of good repute and no previous bankruptcycontained in Council Directive 73/240/EEC of 24 July 1973, abolishingrestrictions on freedom of establishment in the business of direct insur-ance 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;
(1) OJ No L 228, 16. 8. 1973, p. 20.
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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,
HAS ADOPTED THIS DIRECTIVE:
TITLE I
GENERAL PROVISIONS
Article 1
This Directive concerns the taking up and pursuit of the self-employed
activity of direct insurance carried on by undertakings which are estab-lished 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 a stipu-lated age or on earlier death, life assurance with return ofpremiums, marriage assurance, birth assurance;
(b) annuities;
(c) supplementary insurance carried on by life assurance undertak-
ings, that is to say, in particular, insurance against personalinjury 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 author-ities 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 oramong 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 areundertaken;
(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 thateffect payments on death or survival or in the event of discon-tinuance 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 aminimum 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'.
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 inaccordance with the laws of a Member State.
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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, regulationsand administrative provisions relating to the taking-up and pursuit ofthe business of direct insurance other than life assurance(
1), herein-
after referred to as ‘the first coordination Directive (non-life insur-ance)';
2. operations of provident and mutual-benefit institutions whose bene-
fits vary according to the resources available and which require eachof 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 ofdeath 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 areprovided in kind;
2. mutual associations, where:
— the articles of association contain provisions for calling up addi-
tional contributions or reducing their benefits or claiming assis-tance 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 three consecu-tive years this Directive shall apply with effect from the fourthyear.
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 Communi-ties(
2); wherever this Directive refers to the unit of account, the
conversion value in national currency to be adopted shall as from31 December of each year be that of the last day of the precedingmonth of October for which EUA conversion values are available inall the Community currencies;
(b) ‘matching assets' means the representation of underwriting liabili-
ties which can be required to be met in a particular currency byassets expressed or realisable in the same currency;
(1) OJ No L 228, 16. 8. 1973, p. 3.
(2) OJ No L 356, 31. 12. 1977, p. 1.
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(c) ‘localization of assets' means the existence of assets, whether
movable or immovable, within a Member State but shall not beconstrued as involving a requirement that movable assets be depos-ited or that immovable assets be subjected to restrictive measuressuch as the registration of mortgages; assets represented by claimsagainst debtors shall be regarded as situated in the Member Statewhere they are realizable;
(d) ‘capital at risk'means the amount payable on death less the mathe-
matical reserve for the main risk.
TITLE II
RULES APPLICABLE TO UNDERTAKINGS WHOSE HEAD OFFICES
ARE SITUATED WITHIN THE COMMUNITY
Section A
Conditions of admission
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 official authori-zation.
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 itsactivity beyond such part.
3. Member States shall not make authorization subject to the lodging
of a deposit 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 shallcover the entire class unless the applicant wishes to cover only part ofthe risks pertaining 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 operationsreferred 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.
Article 8
1. Each Member State shall require any undertaking setting up in its
territory for which an authorization is sought to:
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(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 b ĳwĳze van geld-
schieting op aandelen',‘association d’assurance mutuelle' —‘onderlinge verzekeringsmaatschapp ĳ', ‘société coopérative' —
‘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' ,
▼
A1
— in the case of the Hellenic Republic:
‘ανώνυµη εταιρία ',
▼B
— 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 ProvidentSocieties Acts and societies registered under the Friendly Socie-ties Acts,
— in the case of the Italian Republic:
‘società per azioni', ‘società cooperativa', ‘mutua di assicura-
zione'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', ‘asso-
ciation d’assurances mutuelles', ‘société coopérative' ,
— in the case of the Kingdom of the Netherlands:
‘naamloze vennootschap', ‘onderlinge waarborgmaatschapp ĳ',
— in the case of the United Kingdom:
incorporated companies limited by shares or by guarantee or
unlimited, societies registered under the Industrial and ProvidentSocieties Acts, societies registered under the Friendly SocietiesActs, the association of underwriters known as Lloyd’s;
Furthermore, Member States may set up, where appropriate, under-
takings under any form of known public law or its equivalentprovided that such institutions have as their object to carry oninsurance operations under conditions equivalent to those of under-takings under private law;
(b) limit its business activities to the activities referred to in this
Directive and operations directly arising therefrom, to the exclusionof 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).
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 operationsin accordance with the provisions of Article 9 as regards such otherclasses 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 guaranteefund 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 tohave technical qualifications or from requiring the memorandum and
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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 applica-
tion for an authorization shall be dealt with in the light of the economicrequirements 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 proposesto use;
(b) the technical bases that the undertaking proposes to employ for each
class of business, including the data needed to calculate premiumrates 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 financialresources intended to cover them;
and, in addition, shall include for the 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 reinsurancecessions;
(h) estimates relating to the financial resources intended to cover under-
writing 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 minimumof the guarantee fund or if higher, the minimum solvency margincalculated in accordance with Article 19 and stating the classes ofinsurance which it actually underwrites and the financial resourcesreferred 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 inthe host country and it must in its turn designate an individual torepresent it who complies with the above conditions. The desig-nated representative shall not be objected to by the Member Stateexcept on grounds relating to repute or technical qualifications suchas apply to directors or managers of undertakings whose headoffices are 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 opera-
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tions in accordance with Article 11 and comply with the conditionscontained in paragraph 1 (b) of this Article.
3. The present coordinating measures shall not prevent Member
States from enforcing provisions requiring, for all insurance undertak-ings, approval of the general and special policy conditions, of thetechnical bases for calculating in particular premium rates and reservesreferred to in Article 17 and of any other document necessary for thenormal exercise of supervision.
4. The abovementioned provisions may not require that any applica-
tion for authorization shall be examined in the light of the economicrequirements 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 condi-tions 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, for the 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 reinsurancecessions.
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 thecompetent 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 befavourable.
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.
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 authori-zation upon the expiry of a period of six months from the date of itsreceipt.
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
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coordination Directive (non-life insurance) and those listed in Article 1of this Directive.
2. Where an undertaking carrying on the activities referred to in the
Annex to the first coordination Directive (non-life insurance) has finan-cial, commercial or administrative links with an undertaking carrying onthe activities covered by this Directive, the supervisory authorities ofthe Member States in whose territory the head offices of those undertak-ings are situated shall ensure that the accounts of the undertakings inquestion are not distorted by agreements between these undertakings orby any arrangement which could affect the apportionment of expensesand income.
3. Subject to paragraph 6, undertakings which at the time of noti-
fication of this Directive carry on simultaneously in a Member Stateboth of the activities referred to in paragraph 1 may continue to do sothere 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 theAnnex 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 ofnotification of this Directive, provided they do not already have anagency 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 bedetermined by the Member State concerned, the simultaneouspursuit 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 whichsuch action must take place, any Member State may also imposethis requirement on agencies or branches established in its terri-tory which simultaneously carry on both activities there.
(c) Agencies and branches of the undertakings referred to in para-
graph 3 which, at the time of notification of this Directive, areengaged in the territory of a Member State solely in the activitiescovered by this Directive may continue their activities there. Ifthe undertaking wishes to carry on the activities covered by thefirst coordination Directive (non-life insurance) in that territory itmay only carry on the activities mentioned in this Directivethrough a subsidiary.
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 aredistinct 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 lifeassurance benefit life policy-holders as if the undertaking onlycarried 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 activityunder this Directive and an activity under the first coordinationDirective (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 first subpara-graph and, provided the competent authority is informed, the under-taking may use those explicit items of the solvency margin which arestill available for one or other activity.
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The supervisory authorities shall analyze the results in both activities soas 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 assuranceand non-life insurance. To this end all income (in particularpremiums, 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 inaccordance with methods of apportionment to be accepted by thecompetent supervisory authority.
(b) Undertakings must, on the basis of the accounts, prepare a state-
ment clearly identifying the items making up each solvencymargin, in accordance with Article 18 of this Directive andArticle 16 (1) of the first coordination Directive (non-life insur-ance).
3. If one of the solvency margins is insufficient, the supervisory
authorities shall apply to the deficient activity the measures provided forin the relevant Directive, whatever the results in the other activity. Byway 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
Conditions for carrying on activities
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 tobe effected.
Article 17
1. Each Member State in whose territory activities are carried on by
an undertaking shall require the undertaking to establish sufficient tech-nical 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,however, permit relaxations in the rules as to matching assets and thelocalization of assets. Relaxations of the rule on matching assets shalltake account of the characteristics of life assurance which is primarily aform of capital and long-term insurance.
Having regard to its special position, Luxembourg may, pending coordi-
nation of legislation on the winding-up of undertakings, retain itssystem of guarantees for technical reserves, including mathematicalreserves, 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
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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 a person or institution from outside the undertaking with responsi-bility for verifying on the spot whether the assets representing technicalreserves, including mathematical reserves, comply with the regulations.This shall be the function of, in particular, the ‘Treuhänder'in Germanyand of the ‘tillidsmand' in Denmark.
3. If a Member State allows any technical reserves, including mathe-
matical reserves, to be covered by claims against re-insurers, it shall fixthe percentage so allowed. In such case, it may not require the assetsrepresenting such claims to be localized in its territory, notwithstandingthe 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 respectof its entire 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 losseswhich may arise and where they have not been made available fordistribution to policy-holders;
3. upon application, with supporting evidence, by the undertaking to the
supervisory authority of the Member State in the territory of whichits 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 theestimated annual profit by a factor which represents the averageperiod 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 thecompetent authorities of the Member States in collaboration withthe Commission. Pending such agreement, those items shall bedetermined in accordance with the laws of the Member State inthe territory of which the undertaking (head office, agency orbranch) carries on its activities.
When the competent authorities have defined the concept of
profits made, the Commission shall submit proposals for theharmonization of this concept by means of a Directive on theharmonization of the annual accounts of insurance undertakings
1979L0267 — EN — 01.01.1981 — 001.001 — 13
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and providing for the coordination set out in Article 1 (2) of
Directive 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 thepremium, 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, exceed3·5 % 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 carryingon its 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 notof an exceptional nature.
Article 19
Subject to Article 20, the minimum solvency margin shall be deter-
mined as shown below according to the classes of insurance under-written:
(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 opera-tions referred to in Article 1 (3), it must be equal to the sum of thefollowing two results:
— first result:
a 4 % fraction of the mathematical reserves, relating to direct
business gross of re-insurance cessions and to re-insuranceacceptances shall be multiplied by the ratio, for the last financialyear, 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,
a0·3 % fraction of such capital underwritten by the undertaking
shall be multiplied by the ratio, for the last financial year, of thetotal capital at risk retained as the undertaking’s liability afterre-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;
— 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 thepremiums or contributions entering into the aggregate.
(1) OJ No L 222, 14. 8. 1978, p. 11.
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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 respectivelyshall 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 afterdeduction of transfers for reinsurance and the gross amount ofclaims; 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 netpremiums, which shall be multiplied by flat-rate percentage fixedannually 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 details togetherwith the relevant calculations shall be sent to the supervisory author-ities 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 themathematical reserves calculated in compliance with the conditionsset 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,a n da1% fraction of the reserves calculated in the fashion, in
so far as the undertaking bears no investment risk provided thatthe term of the contract exceeds five years and the allocation tocover management expenses set out in the contract is fixed for aperiod exceeding five years
plus
—a0 ·3 % fraction of the capital at risk calculated in compliance
with the conditions set out in the first subparagraph of thesecond result of (a) of this Article in so far as the undertakingcovers a death 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 guar-
antee fund to be reduced to 600 000 units of account in the caseof 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 of100 000 units of account to be increased progressively to theamount fixed in (b) by successive tranches of 100 000 units ofaccount whenever the contributions increase by 500 000 units ofaccount.
(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
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comply immediately 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 Article17.
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 ormembers 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 ororganizations designated by national regulations.
2. (a) The Italian Republic may, as an exception, continue to require
undertakings established in its territory to cede part of theirunderwriting to the Istituto Nazionale di Assicurazioni, on condi-tion that:
— the extent of that requirement as at the time of notification of
this Directive is in no way enlarged,
— where account is taken, in determining the compulsory
cession percentage, of the period during which the agency orbranch has been established in Italy, account shall also betaken of the total number of financial years during which theundertaking has carried on the kinds of insurance referred toin Article 1 in the territory of the Member State in which itshead office is situated. In such cases, the competent authorityin that State shall issue a certificate in conformity with thatreferred to in Article 10 (1) (b) in respect of the entire periodduring which the undertaking has carried on business in thosekinds of insurance.
(b) This matter shall be re-examined in connection with a second
Directive relating to the coordination of laws on life assuranceand laying down provisions intended to facilitate the effectiveexercise of freedom to provide services.
Article 23
1. Each Member State shall require every undertaking whose head
office is situated in its territory to produce an annual account, coveringall 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 thedocuments and information necessary for exercising supervision.
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 supervisoryauthorities of the head-office Member State of its intention.
2. For the purposes of restorting the financial situation of an under-
taking whose solvency margin has fallen below the minimum requiredunder Article 19, the supervisory authority of the head-office Member
1979L0267 — EN — 01.01.1981 — 001.001 — 16
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State shall require a plan for the restoration of a sound financial positionto 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 thatArticle, the supervisory authority of the head-office Member State shallrequire 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 inwhose 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 meas-
ures necessary to safeguard the policy-holders’ interests in the casesprovided 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 inparagraphs 1 to 4.
Article 25
1. Each Member State shall make it possible for an authorized under-
taking to assign all or part of its portfolio of policies if the assigneespossess the necessary solvency margin, due account being taken of theassignment.
The supervisory authorities concerned shall consult each other before
approving such assignment.
2. Once approved by the competent national authority, such assign-
ment shall affect directly the policy-holders concerned.
Section C
Withdrawal of authorization
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 inArticle 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 haveauthorized the undertaking; they shall, thereupon, also withdraw theirauthorization. The supervisory authority of the head-office MemberState shall, in conjunction with such other authorities, take all necessarymeasures to safeguard policy-holders’ interests and, in particular, shallrestrict the free disposal of the assets of the undertaking if such restric-tion has not been already imposed in accordance with the provisions ofthe 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 with-drawn 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 partic-ular to the establishment of reserves referred to in Article 17.
1979L0267 — EN — 01.01.1981 — 001.001 — 17
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Before withdrawing authorization the supervisory authorities of the
Member State where the activity is carried on shall consult the super-visory authority of the Member State where the head office is situated.If they deem it necessary to suspend the business of such agency orbranch before consultation is concluded, they shall immediately advisethe supervisory authority of the country where the head office is situ-ated.
3. Any decision to withdraw authorization or suspend business shall
be supported by precise reasons and notified to the undertaking inquestion.
Each Member State shall make provision for a right to apply to the
courts against such a decision.
TITLE III
RULES APPLICABLE TO AGENCIES OR BRANCHES ESTABLISHED
WITHIN THE COMMUNITY AND BELONGING TO UNDERTAKINGS
WHOSE HEAD OFFICES ARE OUTSIDE THE COMMUNITY
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 theminimum 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).
Article 28
Member States shall require undertakings to establish reserves, referred
to in Article 17, adequate to cover the underwriting liabilities assumedin their territories. Member States shall see that the agency or branchcovers such reserves by means of assets which are equivalent to suchreserves 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 coveringsuch 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.
1979L0267 — EN — 01.01.1981 — 001.001 — 18
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Article 29
1. Each Member State shall require of agencies or branches set up in
its territory a solvency margin 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 inaccordance with Article 27 (2) (e) shall be counted towards such guar-antee 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 following advan-tages 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 theCommunity; in such case, account shall be taken only of the opera-tions effected by all the agencies or branches established within theCommunity 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 para-
graph 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 entirebusiness of the agencies or branches established within the Community.Reasons must be given for the choice of authority made by the under-taking. 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 applica-tion has been made agree to them. They shall take effect from the timewhen the selected supervisory authority informs the other supervisoryauthorities that it will supervise the state of solvency of the entirebusiness 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 simultane-ously 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 coordinationDirective (non-life insurance) and those covered by thisDirective.
(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 simultane-
1979L0267 — EN — 01.01.1981 — 001.001 — 19
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ously 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 thesimultaneous pursuit of the activities in which they are engagedat the time of notification of this Directive must also impose thisrequirement on agencies and branches referred to in this Titlewhich are established in its territory and simultaneously carry onboth activities there.
(d) Member States may provide that agencies and branches referred
to in this Title whose head office simultaneously carries on bothactivities 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 itmay only carry on the activity covered by this Directive througha 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 operatesand the latter authorities shall take the appropriate measures. If thereason 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 thepurpose ensuring, under conditions of reciprocity, adequate protectionfor policy-holders in the Member States.
TITLE IV
TRANSITIONAL AND OTHER PROVISIONS
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 ofnotification of this Directive in order to comply with Articles 18, 19 and20.
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 thesolvency margin, a further period not exceeding two years in whichto do so provided that such undertakings have, in accordance withArticle 24, submitted for the approval of the supervisory authoritythe measures which 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
1979L0267 — EN — 01.01.1981 — 001.001 — 20
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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 thedate of 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 the noti-fication of this Directive, to carry on their present business in the legalform 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 mustcease 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 theactivities 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 yearsfrom 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.
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 Iand which do not extend their business within the meaning of Article 10(2), a maximum period of five years from the date of notification of thisDirective 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 followingrequirements:
(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 guaranteenot 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 fromthe third year onwards at the latest, subsidiaries must progressively
1979L0267 — EN — 01.01.1981 — 001.001 — 21
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replace the parent company’s guarantee by free assets; subsidiaries shall
submit 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, andat the latest upon the expiry of a period of four years after the noti-fication of this Directive, each Member State may retain for undertak-ings of that country established in its territory the rules applied to themon 1 January 1979 in respect of matching assets and the localization oftechnical reserves, including mathematical reserves, provided that noti-fication is given to the other Member States and the Commission andthat the limits of relaxations granted pursuant to Article 17 (2) in favourof the undertakings 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 competentjudicial or administrative authority in the Member State of origin or theMember 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 documentreferred to in paragraph 1, it may be replaced by a declaration on oath— or in States where there is no provision for declaration on oath by asolemn declaration — made by the person concerned before acompetent judicial or administrative authority or, where appropriate, anotary in the Member State of origin or the Member State whence thatperson comes; such authority or notary shall issue a certificate attestingthe authenticity of the declaration on oath or solemn declaration. Thedeclaration in respect of no previous bankruptcy may also be madebefore a competent professional or trade body in the said country.
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 andbodies competent to issue the documents referred to in paragraphs 1 and2 shall forthwith inform the other Member States and the Commissionthereof.
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
FINAL PROVISIONS
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 difficul-ties which 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 theeffects of the financial requirements imposed by this Directive on the
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situation in the insurance markets of the Member States. If necessary,
the Commission shall submit interim reports to the Council before theend of 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 dealingwith the operations of the two types of undertakings covered by thisDirective: that is to say, those undertakings which carry on simultane-ously the activity covered by the first coordination Directive (non-lifeinsurance) in addition to the activity covered by this Directive and thoseundertakings 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. TheCommission shall submit its first proposal in this connection to theCouncil 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 forthwithinform the Commission thereof. The provisions thus amended shall,subject to Articles 33 to 36, be applied within 30 months from the dateof notification.
Article 41
Following notification of this Directive, Member States shall communi-
cate the texts of the main provisions of a legislative, regulatory oradministrative nature which they adopt in the field covered by thisDirective to the Commission.
Article 42
This Directive is addressed to the Member States.
(1) OJ No L 189, 13. 7. 1976, p. 13.
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ANNEX
Classes of insurance
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)