APPENDIX

to the Opinion of the Economic and Social Committee

The following proposed amendment, which received more than one quarter of the votes cast, was rejected:

Point 2.1

Delete the last two sentences of this point and replace them by the following:

"The introduction of demanding technical standards (e.g. in respect of emission values) is an integral part of tried and tested environmental policy machinery. Account does, of course, always also have to be taken of the questions of technical feasibility and future dissemination on the market. Measures should also be taken to seek to ensure that these standards can be met by as many technology suppliers as possible.

The Committee understands all the possible reservations which may be expressed over the technical feasibility of standards in individual cases but it does endorse the principle that environmental policy should lay down demanding technical standards in order to enable environmental technology to press ahead."

Result of the vote

For: 28, against: 32, abstentions: 6.

Opinion of the Economic and Social Committee on the "Proposal for a Directive of the European Parliament and of the Council concerning life assurance (recast version)"

(2001/C 123/04)

On 26 July 2000 the Council decided to consult the Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 8 December 2000. The rapporteur was Mr Pelletier.

At its 378th plenary session of 24 and 25 January 2001 (meeting of 24 January) the Economic and Social Committee adopted the following opinion with 81 votes in favour and two abstentions.

1. Introduction

1.1. The basic texts governing the single market in life assurance, which is founded on the principle of the single authorisation and mutual recognition of checks, are the first directive of 5 March 1979(1), the second directive of 8 November 1990(2) and the third directive of 10 November 1992(3), the latter directive amending and supplementing the preceding directives. It does not replace them completely and many of the provisions from the first two directives remain in force. These directives have themselves been amended by a directive of 29 June 1995(4) intended to strengthen prudential supervision.

1.2. Because of this accumulation of interlinking texts, and the resultant extremely complex layout, the Commission wishes to consolidate them officially in the interests of clarity.

1.3. During the official consolidation of the life assurance directives it became apparent to the Commission that it would be necessary to propose some amendments going beyond pure consolidation so as to clarify or update certain situations. This is why the proposal submitted for the Committee's opinion constitutes a proposal for recasting the directives.

2. General comments

2.1. Subject to the comments set out below, the Committee is generally favourable to the proposed recasting and can only share the objective of transparency and clarity.

2.2. Furthermore, the newly inserted provisions - of which there are six - are of limited scope and do not all require detailed comment. They concern the following points:

- definition of a regulated market;

- dates concerning the activities of composite undertakings;

- calculation of future profits;

- presentation of a scheme of operations by third country branches to be established in the EU;

- abolition of derogations;

- rights acquired by existing branches.

2.3. The majority of the proposal's provisions restate the life assurance directives, although several articles which no longer have any point are dropped. Regarding the articles which refer to the drawing-up of reports, the Committee wonders whether these reports have actually been drawn up.

3. Specific comments

3.1. Preamble

3.1.1. Recital 5

Recital 3 of Directive 92/96/EEC described the adoption of this directive as a "stage that must be supplemented by other Community measures". This phrase should be retained in the proposed "recast" insofar as the single market still needs Community initiatives.

3.1.2. Recital 34

The French version lacks the reference "92/96/EEC No 13" in the margin.

3.1.3. Recital 58

It should be spelt out that the "provisions concerning proof of good repute and no previous bankruptcy" must apply to the directors.

3.2. Articles

3.2.1. Article 1 - Definitions

3.2.1.1. 1(b) Branch

In the definition of "branch" the words "shall be treated in the same way as an agency or branch" which followed the words "Any permanent presence of an undertaking ..." in Article 3 of the Directive of 8 November 1990 (90/619/EEC) have not been included (French text only). The Committee would suggest inserting two indents so as to clearly separate these two paragraphs, one starting with "an agency ..." and the other with "any permanent presence ...".

3.2.1.2. 1(c) Establishment

The Committee would point out that in the French version the word "établissement" (establishment) is not in italics like the other words defined in Article 1. The definition of "establishment" should more logically precede that of "branch".

The Committee wonders why Article 1 does not provide a definition of "Member State of establishment" which Article 2(f) of the second directive of 8 November 1990 (90/619/EEC) defined as "the Member State in which the establishment covering the commitment is situated". Is it regarded as redundant, being identical with "Member State of the branch"?

3.2.1.3. 1(m) Regulated market

Directive 92/96/EEC provided for a provisional definition of a regulated market, pending the adoption of a directive on investment services in the securities field, which would harmonise that concept at Community level.

Council Directive 93/22/EEC(5) of 10 May 1993 on investment services in the securities field provides for a definition of regulated market, although it excludes from its scope life assurance activities. The Committee considers that incorporating this definition for life assurance is satisfactory and ensures that Community law is uniform.

Regarding the treatment of regulated markets in third countries, the Commission proposes leaving it up to the Member States to decide whether such markets are comparable with those in the EU. The Committee wonders whether more coordination and cooperation between the supervisory authorities is not needed to establish a number of criteria and requirements to improve the comparability of Community and non-Community regulated markets(6).

3.2.2. Article 18(6) - Simultaneous pursuit of life assurance and non-life insurance activities

The derogations introduced to the principle that life and non-life operations are to be kept separate should not be too numerous. Bearing in mind also the forthcoming enlargement of the EU, there is a risk of an increase in derogations to the principle. For this reason the Committee wonders whether the scope for derogation should not be further hedged in.

3.2.3. Article 23(1)(C) - Categories of authorised assets

Article 23(1)(C) of the French text of the draft recast, concerning the categories of assets authorised to cover the mathematical provisions, does not incorporate "(p) reversionary interests" from Article 21 of the third directive (92/96/EEC). This must be an oversight.

3.2.4. Article 25 - Contracts linked to a UCITS or share index

In the French version there is a mistake in the reference in margin. It should be Article 23 (92/96/EEC) and not Article 2.

3.2.5. Article 27(3)(a) - Rules relating to the solvency margin and to the guarantee fund

3.2.5.1. 2nd paragraph - calculation of future profits

The proposal states that "the bases for calculating the factor by which the estimated annual profit is to be multiplied and the items comprising the profits made shall be defined by common agreement by the competent authorities of the Member States in collaboration with the Commission". It stipulates that "pending such agreement, those items shall be determined in accordance with the laws of the home Member State" and not, as in previous versions, "of the Member State in the territory of which the undertaking (head office, agency or branch) carries on its activities". In the Committee's view this amendment is in line with the Community directives which allot responsibility for supervising operations to the country where the head office is located.

3.2.5.2. Furthermore, the Committee wonders whether the method for calculating future profits should not include a more forward-looking dimension. This point should be studied when the texts on the solvency margin are amended.

3.2.6. Article 28 - Minimum solvency margin

3.2.6.1. In the third line of the fourth paragraph "et" should be replaced by "est" in the French version.

3.2.7. Article 49(2),(3),(4) - Scheme of operation of branches

The text of Article 11 of the first directive is reintroduced for the scheme of operations of third country branches. Is the information required by third country branches sufficient? Is more information needed to assess the links of a third country branch in a group or for intra-group transactions within the meaning of the directive on the supplementary supervision of insurance undertakings in an insurance group (98/78/EC)(7)?

The Committee thinks that it is justified in raising these points, especially bearing in mind the prospect of enlargement and the worldwide activities of criminal organisations.

3.2.8. Article 57 - Third country treatment of Community assurance undertakings

3.2.8.1. Paragraph 2

Rather than the Commission "periodically" drawing up a report examining the treatment accorded to Community assurance undertakings in third countries, a more precise timetable should be stipulated, every five years for example.

Furthermore, was the above-mentioned report, which should have been drawn up for the first time no later than six months before the date referred to in the second paragraph of Article 30 of Directive 90/619/EEC, drawn up as provided for in Article 9 of that directive?

3.2.8.2. Paragraphs 4 and 5

Article 57 of the proposal incorporates Article 32b of Directive 79/267/EEC as inserted by Article 9 of Directive 90/619/EEC.

However, the last sub-paragraph of paragraph 4 and the first sub-paragraph of paragraph 5 have been omitted in the French version. The Committee proposes that they be reintroduced. The text is as follows:

"Such limitations or suspension may not apply to the setting up of subsidiaries by insurance undertakings or their subsidiaries duly authorized in the Community, or to the acquisition of holdings in Community insurance undertakings by such undertakings or subsidiaries.

5. Whenever it appears to the Commission that one of the situations described in paragraphs 3 and 4 has arisen, the Member States shall inform it at its request."

3.2.9. Article 59(2) - Derogations and abolition of restrictive measures

The Committee wonders whether a derogation should be retained for societies registered in the United Kingdom "under the Friendly Societies Acts" when the derogations introduced for Belgian and Italian societies are no longer necessary.

3.2.10. Article 61 - Transitional regime for investments in land and buildings; Article 62 - Transitional regime for Sweden; Article 67 - Rights acquired by existing branches and assurance undertakings; Article 69 - Review of amounts expressed in euro

These articles laying down transitional regimes should either be adapted by stipulating a new period or be deleted as no longer relevant.

3.3. The Annexes

3.3.1. Annex III on information for policy-holders

The Committee suggests amending point (a)14 to read "type of contract" instead of "type of policy" to bring it into line with the terminology used in the directive.

4. Conclusions

4.1. Without prejudice to point 2.2 above, the main objective of the proposal referred to the Committee is to consolidate Community provisions on life assurance so as to provide the public with a single, clear and readily understandable text. The Committee approves this initiative which will help to give economic agents and consumers an ordered overview of the general framework governing life assurance activities in the EU and will facilitate the growth of trans-border transactions. It will also help to improve legal certainty for economic agents.

4.2. The Committee would strongly encourage the European Commission to carry out the same exercise as soon as possible for non-life insurance, an area where the complexities of the Community legal framework are in need of clarification. These operations are in fact governed by no fewer than nine directives, adopted between 1973 and 1999, covering not only access to and exercise of non-life activities, but also more specifically vehicle insurance, credit insurance, travel insurance and legal protection insurance.

4.3. The Committee is also concerned that the proposed directive should not leave the way open for the principles and procedures laid down by the consolidated directives to be called into question.

Brussels, 24 January 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) Council Directive 79/267/EEC of 5 March 1979, OJ L 63, 13.3.1979, p. 1.

(2) Council Directive 90/619/EEC of 8 November 1990, OJ L 330, 29.11.1990, p. 50.

(3) Council Directive 92/96/EEC of 10 November 1992, OJ L 360, 9.12.1992, p. 1.

(4) European Parliament and Council Directive 95/26/EC of 29 June 1995, OJ L 168, 18.7.1995, p. 7.

(5) Council Directive 93/22/EEC of 10 May 1993, OJ L 141, 11.6.1993, p. 27.

(6) "Challenges posed by EMU to financial markets", OJ C 367, 20.12.2000.

(7) Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998, OJ L 330, 5.12.1998, p. 1.