WRITTEN QUESTION E-3954/97 by Pierre Bernard-Reymond (PPE) to the Commission (12 December 1997)

Subject: Commission reasoned opinion of 17 February 1997 prohibiting the 'Mutualité' sickness insurance scheme from owning dental and medical practices or pharmacies as of 1 June 1997

Is it true that a reasoned opinion prohibiting the 'Mutuality' sickness insurance scheme from owning dental practices as of 1 June 1997 was delivered by the European Commission on 17 February 1997?

Answer given by Mr Monti on behalf of the Commission (13 March 1998)

The Commission has initiated infringement proceedings against France, under Article 169 of the EC Treaty, for incomplete transposal of certain insurance Directives, namely Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance Directive ((OJ L 228, 11.8.1992. ))) and Council Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance Directive ((OJ L 360, 9.12.1992. ))). A reasoned opinion was delivered to France on 5 March 1997.

These Directives, which lay down the principles that authorisation is granted and prudential and financial supervision carried out by the insurance undertaking's home Member State, have been applicable since 1 July 1994. Their scope, as far as France is concerned, covers the following forms of undertaking: 'société anonyme', 'société d'assurance mutuelle', 'institution de prévoyance régie par le code rural' and 'mutuelles régies par le code de la mutualité'.

France adopted and notified to the Commission the texts of Laws 94/678 on employees' supplementary social welfare cover and 94/679 containing various economic and financial provisions (both dated 8 August 1994), which transposed the Directives into national law. However, transposal was incomplete, the above-mentioned laws not having transposed the Directives as far as the 'mutuelles régies par le code de la mutualité' were concerned.

Regarding, more specifically, the management of pharmacies and dental practices by the 'Mutualité', Directives 92/49/EEC and 92/96/EEC laid down the principle that any undertaking authorised to carry on insurance business must be engaged exclusively in insurance. The French legislation, however, does not comply with this requirement since the insurance side of the mutual associations' activities, their commercial business and their social welfare activities, which include the management of dental practices and pharmacies, are all managed by the same legal entity. Transposing the third-generation insurance Directives does not prevent a mutual association continuing to conduct its insurance business and manage social welfare activities, provided that it entrusts these two types of activity to distinct legal entities.

Directives 92/96/EEC and 92/49/EEC allow insurance undertakings to carry out certain activities other than insurance only in so far as they derive directly from the business of insurance and enable the insurance undertaking to conduct its insurance activities effectively. Where there is no such link between these ancillary activities and the business of insurance, the insurance undertaking cannot legitimately carry out its activities under the same legal personality.