WRITTEN QUESTION P-3102/98

by Marie-Noëlle Lienemann (PSE) to the Commission

(8 October 1998)

Subject: Directive on insurance

Non-profit-making mutual associations play an essential part in ensuring that all citizens have access to treatment and in developing preventive measures.

They help to achieve solidarity in aid of better welfare cover for European citizens.

Bearing this in mind, does not the Commission believe it advisable to lay down a legislative framework different from that provided for in the directive on insurance?

More generally, how does the Commission intend to take account of the special characteristics of mutual associations and to protect their interests?

Answer given by Mr Monti on behalf of the Commission

(16 November 1998)

The Commission recognises the importance of the role played by mutual associations in the non-profit sector within the Community.

Where the business of insurance is concerned, the relevant Community directives lay down the conditions for carrying on this activity in the single market, in accordance with the principles of freedom of establishment and freedom to provide services enshrined in the EC Treaty. They establish arrangements for the taking-up and pursuit of these activities under which an insurance company, irrespective of its legal form, is required to maintain a financial position that will enable it to honour at all times the commitments deriving from insurance contracts written by it. These arrangements are based on close monitoring of the financial aspects of the insurance company, which is required among other things to have at all times adequate technical provisions that are covered by matching assets and invested according to strict rules, a sufficient solvency margin for its activities that is calculated according to the provisions of the Insurance Directives, sound administrative and accounting procedures, and adequate internal controls.

The Insurance Directives already contain provisions which take into consideration the specific nature of insurance bodies having the form of a mutual association. These provisions relate in particular to the constitution of own funds (solvency margin). They permit non-life mutual associations to call in additional contributions to constitute up to 50 % of their solvency margin. The Directives also authorise Member States to provide for a 25 % reduction in the minimum level of the guarantee fund required by the Directives in the case of mutual associations.

The Directive on the supplementary supervision of insurance undertakings in an insurance group, which was adopted by the Council and Parliament on 27 October 1998(1), takes full account of the concern expressed by mutual associations during the legislative process. It creates the conditions necessary to enable mutual associations, which by definition cannot have cross-holdings, and insurance undertakings in the form of companies to be treated on an equal basis as regards solvency requirements when they belong to an insurance group.

The work under way on the Statute for a European Mutual Society and the Statute for a European Cooperative is also aimed at providing mutual associations in Member States with a tailor-made legal instrument that will enable them to carry on their activities in the internal market.

(1) OJ L 330, 5.12.1998.