COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council concerning life assurance (recast version)

2000/0162 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council concerning life assurance (recast version)

1- BACKGROUND

- On 28 June 2000 the Commission adopted a Proposal for a Directive of the European Parliament and of the Council concerning life assurance (recast version) [1]. The Proposal was submitted to the Council and to the European Parliament on 28 June 2000.

[1] COM (2000) 398 final, OJ C 365 E, 19.12.2000., p.1

- At its 378th plenary session on 24 January 2001 [2] Economic and Social Committee delivered a favourable opinion on the Proposal.

[2] OJ C 123, 25.04.2001, p.24

- The European Parliament adopted a legislative resolution [3] embodying its opinion on the Commission's Proposal at its plenary session on 12-15 March 2001. The Parliament approved the text of the Commission proposal without proposing any amendment.

[3] PE 298391. Rapporteur Lord Inglewood.

- On 27 May 2002 the Council adopted the common position [4] which is the subject of this communication.

[4] OJ...........

2- OBJECTIVE OF THE COMMISSION PROPOSAL

The main object of this Proposal is to facilitate the comprehension and application of the insurance directives by recasting them in a clear, coherent and complete legal text. The Proposal recasts in a single text all the existing directives in the field of life assurance.

In addition to the pure codification of the provisions, some minor adaptations - which do not affect the substance of the text - were deemed to be necessary. These adaptations concern only omissions in existing texts, clarification of certain legal situations and deletions of the names of undertakings which have ceased activities and no longer need to be mentioned. The proposal goes therefore beyond the limits of a pure codification and is called "recast".

The adaptations contained in the Commission Proposal concern the following points, which do not affect the substance of the text: Article 1 (1) (m), definition of "regulated market"; Article 18(3), dates on composite activities; Article 27, point (3) (a), calculation of "future profits"; Article 49(2)(g)(3) and (4), scheme of operations; Article 59 (2), derogation and abolition of restrictive measures; and Article 67(1), rights acquired by existing branches.

3- COMMENTS ON THE COMMON POSITION

3.1. Parliament in the first reading approved the Commission proposal without any amendment

3.1.1. The common position takes full account of the Commission's Proposal which was approved by the European Parliament in the first reading without any amendment.

3.2. Changes introduced by the Council in the common position

3.2.1. As a result of the examination of the Proposal by the Council working group some further technical corrections and adaptations have been introduced in the text of the common position in order to improve the consistency and the completeness of the Directive. All these adaptations are not substantial and fully fall within the limits of the recast exercise.

The common position contains therefore technical corrections and adaptations of the Proposal on the following points:

- Recital 23 of the common position takes account of the 2nd recital Directive 2000/64/EC [5] which was adopted after the recast Proposal was presented by the Commission.

[5] OJ L 290, 17.11.2000, p. 27

- Article 1(1) r) of the common position: in the definition of close links, the notion of "control" has been fully adapted to the wording of Directive 95/26/EC.

- Article 3 (7) of the common position: the reference to the "Caisse d'Epargne de l'Etat" of Luxembourg has been deleted as this institution is no longer engaged in insurance activities.

- Article 16(3) of the common position: this paragraph has been adapted to Article 2 of Directive 2000/64/EC.

- Article 18(3) of the common position: the date from which the specialisation principle applies to life assurance undertaking in the case of Austria, Finland and Sweden has been indicated as the accession date as for the other Member States which joined the European Union after the adoption of the relevant directive.

- Article 20(1)(B)(a)(i) first subparagraph of the common position: the last sentence has been deleted to take account of the introduction of the euro.

- Article 51(3) and (4) of the common position: the scheme of operations required for third country branches established in a Member State has been adapted to keep consistency with the scheme of operations required from EU life assurance undertaking in Article 7 of the common position.

- Article 60(2) of the common position reintroduces a text contained in the original directive and eliminated in the recast Proposal, since it has been considered appropriate to keep it in order to avoid any confusion with regard to the scope of the provision.

- Article 65 of the common position, brings into a single provision Articles 58 and 66 of the Proposal, which derived from two different codified directives but had identical content, in order to avoid unnecessary repetitions.

- Article 69(2) of the common position takes account of the implementation date of Directive 2000/64/EC, which was adopted after the recast Proposal was presented by the Commission.

- The common position also eliminates Articles 61 and 62 of the Commission's Proposal as they concern transitional periods which were granted at the time by the codified directives and have already expired.

- Annex V of the common position, containing the list of repealed directives and deadlines for implementation, has been adapted in its presentation in order to improve clarity.

All the other adaptations included in the common position concern pure linguistic and grammatical points as well as the numbering of the Articles contained in the original Proposal.

3.2.2. In order to keep updated as much as possible the recast exercise on the life insurance directives the common position also incorporates the amendments to Directive 79/267/EEC which have been just introduced by the recently adopted Directive 2002/12/EC [6] as regards the solvency margin requirements for life assurance undertakings. These amendments concern the following recitals and Articles of the common position:

[6] OJ L 77, 20.03.2002, p 11

- Recital 39 of the common position has been adapted in order to incorporate the 3rd recital of Directive 2002/12/EC.

- Recital 41 of the common position has been completed in order to incorporate the 8th and 11th recitals of Directive 2002/12/EC.

- Recital 43 of the common position incorporates the 12th recital of Directive 2002/12/EC.

- Recital 50 of the common position has been completed by inserting the 10th recital of Directive 2002/12/EC.

- Article 3 (6) of the common position is adapted to incorporate the amendment inserted by Article 1(1) of Directive 2002/12/EC in Article 3 (2) of Directive79/267/EEC

- Article 27 of the common position is adapted to incorporate the amendment inserted by Article 1(2) of Directive 2002/12/EC in Article 18 of Directive79/267/EEC

- Article 28 of the common positions is adapted to incorporate the amendment inserted by Article 1(2) of Directive 2002/12/EC in Article 19 of Directive79/267/EEC

- Article 29 of the common positions is adapted to incorporate the amendment inserted by Article 1(2) of Directive 2002/12/EC in Article 20 of Directive79/267/EEC

- Article 30 of the common position incorporates the new Article 20(a) inserted in Directive79/267/EEC by Article 1(3) of Directive 2002/12/EC.

- Article 38 of the common position incorporates the new Article 24(a) inserted in Directive79/267/EEC by Article 1(4) of 2002/12/EC.

- Article 71 of the common position incorporates the transitional period provision laid down in Article 2 of Directive 2002/12/EC for the application of this Directive.

- Article 69 (3) and (4) takes account of the implementation date provision laid down in Article 3 of Directive 2002/12/EC

- Annex IV of the common position contains some provisions which will remain in force until they are replaced with those contained in directives 2000/64/EC and 2002/12/EC which have been included the recast exercise but will not be yet applicable at the moment of adoption of the recast directive. This annex aims to ensure legal certainty with respect to the applicable provisions.

- Annex VI of the common position fully reflects Annex V of the recast Proposal.

4- CONCLUSION

The Commission takes the view that the Council's common position very much reflects the substance of the Commission's Proposal which was approved by the European Parliament without any amendment. The adaptations and corrections introduced by the Council in the common position do not involve any substantial change and fall within the limits of a recast. The Commission can commend the approval of this common position to the European Parliament.