WRITTEN QUESTION P-2879/01

by Gerard Collins (UEN) to the Commission

(10 October 2001)

Subject: UK implementation of Directive 73/239

Is the Commission aware that a considerable number of Union citizens have suffered substantial loss by being liable for a share of the losses that

Lloyd's of London has incurred in business written in the United States as a consequence of their membership of that company's insurance market? Is the Commission further aware of evidence that Lloyd's syndicates had not properly reserved for that business as required by Directive 73/239(1)? Does the Commission propose to open infringement proceedings against the UK in relation to this matter and will the Commission make available to Parliament any documentation and correspondence which it possesses in relation to this matter?

(1) OJ L 228, 16.8.1973, p. 3.

Answer given by Mr Bolkestein on behalf of the Commission

(12 November 2001)

The Honourable Member has raised four issues.

The Member of the Commission responsible for the Internal Market has already responded to many of these in the detailed briefing to the Petitions Committee on 18 June 2001:

- First, the Commission is aware that a considerable number of Union citizens have suffered substantial loss by being liable for a share of the losses that Lloyd's of London has incurred in business written the United States as a consequence of their membership of Lloyd's.

- Second, the Commission is aware that on an ex-post basis, it became evident that many Lloyd's syndicates were under-reserved for their liabilities as a result of rising asbestosis claims in the United States. However, as part of its enquiries into the respect of the requirements of the first Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance, with regard to Lloyd's, the Commission is examining whether sufficient reserves were established on an ex-ante basis.

- Third, the Commission is taking very seriously the many complaints it has received regarding alleged infringements of the Community insurance directives with respect to Lloyd's. In this regard The General Directorate (DG) Internal Market has made official enquiries (what are termed pre-Article 226 (ex Article 169) of the EC Treaty letters) to the British authorities. The situation is extremely complicated and the Commission hopes to complete its preliminary analysis very shortly. The Commission will then take a decision on whether to launch formal infringement proceedings under Article 226 of the EC Treaty. The Parliament will be informed of the Commission's decision.

- Fourth, the Commission has always sought to keep Parliament fully informed by submitting extensive written comments and by oral explanation of Commission officials at Petitions Committee meetings. In particular, the Honourable Member of the Commission responsible for the Internal Market made a lengthy presentation to the Petitions Committee on 18 June 2001 and responded to detailed Members' questions. The Commission has also sought to provide documents, unless bound by confidentiality constraints, and the Commission provided a copy of questions it sent to the British authorities in October 2000.