EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 18 July 2008 
at the request of the Austrian Federal Ministry of Finance on the provisions introducing  
investment-oriented life assurance  
(CON/2008/30) 
 
Introduction and legal basis  
On 9 June 2008 the European Central Bank (ECB) received a request from the Austrian Federal Ministry 
of Finance for an opinion on a draft law implementing Directive 2007/44/EC1 amending the Law on 
banking, the Law on securities supervision, the Law on  the stock exchange, the Law on savings banks, the 
Law on federal finance, the Law on insurance supervis ion, the Law on company pensions and the Law on 
financial conglomerates (hereinafter the ‘draft law’),  and at the same time introducing a new investment 
instrument, namely investment-oriented life assurance. 
The ECB’s competence to deliver an opinion is based on the sixth indent of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions2, as the draft law relates to rules applicable to financial 
institutions insofar as they materially influence th e stability of financial institutions and markets. In 
accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central 
Bank, the Governing Council has adopted this opinion. 
 1. Purpose of the draft law and scope of the opinion 
1.1 According to the explanatory memorandum to the draft law, the proposed investment-oriented life 
assurance would allow proceeds from the premiu ms paid out under a specific life assurance 
contract to be invested in line with the pre-defi ned investment strategy specified in the contract. 
Proceeds gained from such specified  investments will be attributed to the individual contract, 
whereas in unit-linked life assurance or index-linked life  assurance, the investment is attached to an 
external fund or index. This differs also from cl assic life assurance, where all interest yields are 
equally distributed to the respective contracts.  According to the explanatory memorandum, the 
                                                
 
1 Directive 2007/44/EC of the European Parliament and of  the Council of 5 September 2007 amending Council Directive 
92/49/EEC and Directives 2002/83/EC, 2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and 
evaluation criteria for the prudential assessm ent of acquisitions and increase of hold ings in the financial sector (OJ L 247, 
21.9.2007, p. 1). 
2  OJ L 189, 3.7.1998, p. 42.  
2 insurance company will hence be in a position to pr ovide insurance products tailored to the client’s 
individual risk preferences with a guaranteed interest rate3.  
1.2 Under the draft law, insurance companies will also have to comply with conduct of business rules 
for transactions in unit-linked life assurance, a nd in investment-oriented life assurance without 
guarantee. It also empowers the Financial Ma rket Authority, which supervises insurance 
companies, to exercise regulatory powers in that respect. 
1.3 This opinion does not consider the measures inte nded to transpose Directive 2007/44/EC and only 
focuses on the above summarised provisions intr oducing investment-oriented life assurance and 
conduct of business rules for insurance companies.  
 2. The central bank’s financial stability role and exchange of information  
2.1 In previous opinions, the ECB has recognised that the nature and scope of risk in the financial 
sector is widening, due to closer links between cr edit institutions, insurance companies, investment 
firms and pension funds, as demonstrated by the emergence of hybrid financial products, the 
increased use of risk transfer instruments and the growing role of financial conglomerates
4.  
2.2 Further, in keeping with the position taken by the ECB in previous opinions on draft national 
legislation, including its opinions on the 2001 refo rm of the Austrian financial supervision 
framework5 and the reform of the banking supervision framework in Austria6, the ECB considers 
that central banks are in general best placed to take on responsibility for financial stability, given 
their insight into money and financial market developments and their involvement in payment 
systems and monetary policy operations. This app lies both to the normal conduct of business and in 
crisis situations. 
2.3 Given the hybrid nature of the proposed investme nt-oriented life assurance, the Oesterreichische 
National Bank (OeNB) must have adequate access to information and data in relation to this 
product. The ECB understands that Article 44b(1) of the Law on the OeNB7 provides an adequate 
legal basis in this respect8. 
 
                                                 
3  The product may be linked, at a higher premiu m, to the guaranteed minimum rate of return. 
4  See, e.g. paragraph 2.1 of ECB Opinion CON/2008/16 of 4 Apr il 2008 at the request of the Finnish Ministry of Finance 
on a draft government proposal for a law on the Financial and Insurance Supervisory Authorit y and certain related draft 
laws. 
5   See ECB Opinion CON/2001/10 of 25 of May 2001 at the request of the Austrian Ministry of Finance on the Law 
establishing and organising the financial market supervisory authority and amending several laws. 
6 See ECB Opinion CON/2007/33 of 5 November 2007 at the request  of the Austrian Federal Ministry of Finance on a 
draft law amending the Law on banking, the Law on savings  banks, the Law on the Fina ncial Market Supervisory 
Authority and the Law on the Oe sterreichische Nationalbank. 
7 The Law on the Oesterreichische Nationalbank.  
8 See paragraph 2.4 of ECB Opinion CON/2007/33.  
3 3. Specific issues  
3.1 The ECB welcomes the introduction of conduct of bu siness rules in relation to the abovementioned 
assurance products as they will enhance consumer protection. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 18 July 2008. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET