Proposal for a Directive of the European Parliament and of the Council on insurance mediation
Date: 2000-09-20
Institutions: European Commission
Subjects: financial market, freedom to provide services, insurance, right of establishment, trade intermediary

30.1.2001

EN

Official Journal of the European Communities

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Proposal for a Directive of the European Parliament and of the Council on insurance mediation

(2001/C 531 E/10)

(Text with EEA relevance)

COM(2000) 511 final (cid:151) 2000/0213(COD)

(Submitted by the Commission on 20 September 2000)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

appropriate to replace Directive 77/92/EEC and Recom-
mendation 92/48/EEC with a new directive.

Having regard to the Treaty establishing the European
Community, and in particular Articles 47(2) and 55 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee,

the Economic and Social

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) Insurance and reinsurance intermediaries play a central
insurance and reinsurance

role in the distribution of
products in the Community.

(6) Insurance and reinsurance intermediaries should be able
to avail themselves of the freedom of establishment and
the freedom to provide services which are enshrined in
the Treaty.

(7) The inability of insurance intermediaries to operate freely
the Community hinders the proper func-

throughout
tioning of the single market in insurance.

(8) The coordination of national provisions on professional
requirements and registration of persons taking up and
pursuing the activity of insurance mediation can therefore
contribute both to the completion of the single market for
financial services and to the enhancement of customer
protection in this field.

(9) Various types of persons or institutions, such as agents,
brokers and (cid:145)bancassurance(cid:146) operators, can distribute
insurance products. Equality of
treatment between
operators and customer protection requires that all these
persons or institutions be covered by this Directive.

(2) A first

step was made with Council Directive
freedom of
for
services

to facilitate the exercise of
and freedom to provide

77/92/EEC (1)
establishment
insurance agents and brokers.

(3) Directive 77/92/EEC was to remain applicable until the
entry into force of provisions coordinating national rules
concerning the taking-up and pursuit of the activities of
insurance agents and brokers.

(4) Commission

Recommendation
92/48/EEC
18
intermediaries (2) was
December 1991 on insurance
largely followed by Member States and helped to bring
closer together national provisions on the professional
requirements and registration of insurance intermediaries.

of

(5) However, there are still substantial differences between
national provisions that create barriers to the taking-up
and pursuit of the activities of insurance and reinsurance
therefore
intermediaries in the internal market.

is

It

(1) OJ L 26, 31.1.1977, p. 14; Directive as last amended by the Act of

Accession of Austria, Finland and Sweden.

(2) OJ L 19, 28.1.1992, p. 32.

is

(10) This Directive should cover persons whose normal
to provide third parties with insurance
business
mediation services on a professional basis.
Its scope
should not therefore cover any person with a different
an
such as
professional
accountant, who provides advice on insurance cover on
an incidental basis in the course of that other professional
activity.

tax expert or

activity,

a

(11) Member States should have the option of not applying
this Directive to persons practising insurance mediation as
an ancillary activity. However, in the interests of customer
protection, this option should be strictly limited.

(12)

and reinsurance

should be
Insurance
intermediaries
registered by the competent authority of
the Member
State where they have their head office, provided that
they meet strict professional requirements in relation to
their competence, good repute, professional
indemnity
cover and financial capacity.

(13) Such registration should allow insurance and reinsurance
intermediaries to operate in other Member States under
freedom of establishment and freedom to provide services,
provided that an appropriate notification procedure has
been followed between the competent authorities.

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(14) Appropriate sanctions are needed against persons exer-
cising the activity of insurance or reinsurance mediation
without being registered against insurance or reinsurance
undertakings using the services of unregistered inter-
intermediaries not complying
mediaries, and against
with national provisions
to this
Directive.

adopted pursuant

this
2. Member States need not apply the provisions of
Directive to persons providing insurance contracts if all the
following conditions are met:

(a) the contracts do not require general or specific knowledge

of insurance;

(15) Cooperation and exchange of

competent authorities are essential
customers and ensure the soundness of
reinsurance business in the single market.

information between
in order to protect
insurance and

(b) the contracts are not life insurance contracts;

(c) the insurance does not cover any liability risks;

(16)

It is essential for the customer to know whether he is
dealing with an intermediary who is advising him on
products from a broad range of insurance undertakings
or on products provided by a specific number of
insurance undertakings.

(17)

If the intermediary declares that he is giving advice on
products from a broad range of insurance undertakings,
he should carry out a fair and sufficiently wide-ranging
the products available on the market.
analysis of
In
addition, all
intermediaries should explain the reasons
underpinning their advice.

(d) the principal professional activity of the person is other

than insurance mediation;

(e) the insurance is ancillary to the good or service supplied, in
particular where such insurance covers either the risk of
breakdown, loss of or damage to goods supplied by that
person or an indemnification of goods linked to the travel
booked with that person;

(f)

the amount of the premium does not exceed EUR 1 000
and the duration of the insurance contract is less than a
year.

(18) There is less of a need to require that such information be
disclosed when the customer is a company seeking rein-
surance or insurance cover for commercial and industrial
risks.

Article 2

Definitions

For the purposes of this Directive:

(19) There is a need for suitable and effective complaint and
redress procedures in the Member States in order to settle
disputes between insurance intermediaries and customers,
using, where appropriate, existing procedures.

(1)

(cid:145)insurance undertaking(cid:146) means an undertaking which has
received official authorisation in accordance with Article
6 of Council Directive 73/239/EEC (1) or Article 6 of
Council Directive 79/267/EEC (2);

(20) Without prejudice to the right of customers to bring their
action before the courts, Member States should encourage
public or private bodies established with a view to settling
out-of-court disputes to cooperate in resolving cross-
border disputes. Such cooperation could for example
allow customers to contact extra-judicial bodies in their
country of
concerning
about
insurance intermediaries established in other Member
States,

complaints

residence

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

SCOPE AND DEFINITIONS

Article 1

Scope

1.
This Directive lays down rules for the taking-up and
pursuit of the activities of insurance and reinsurance mediation.

(2)

(cid:145)reinsurance undertaking(cid:146) shall be as defined by Article
1(c) of Directive 98/78/EC of the European Parliament
and the Council (3);

(3)

(4)

(cid:145)insurance mediation(cid:146) means the activities of introducing,
giving information, proposing or carrying out work
preparatory to the conclusion of, or
in concluding,
contracts of insurance, or assisting in the administration
and performance of such contracts, in particular in the
event of a claim;

the activities of

intro-
(cid:145)reinsurance mediation(cid:146) means
ducing, giving information, proposing or carrying out
work preparatory to the conclusion of, or in concluding,
contracts of reinsurance, or assisting in the administration
and performance of such contracts, in particular in the
event of a claim;

(1) OJ L 228, 16.8.1973, p. 3.
(2) OJ L 63, 13.3.1979, p. 1.
(3) OJ L 330, 5.12.1998, p. 1.

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for
(cid:145)insurance intermediary(cid:146) means any person who,
remuneration, takes up or pursues insurance mediation
and associated advisory services, except an insurance
undertaking or an employee of an insurance undertaking
when the employee is acting under the responsibility of
that insurance undertaking;

Registered insurance and reinsurance intermediaries shall
3.
be allowed to take up and pursue the activity of insurance and
reinsurance mediation in the Community by means of both
freedom of establishment and freedom to provide services.

(5)

(6)

takes

(cid:145)reinsurance intermediary(cid:146) means any person who,
for
reinsurance
up
remuneration,
mediation and associated advisory services, except a rein-
surance undertaking or an employee of a reinsurance
undertaking when the employee is acting under
the
responsibility of that reinsurance undertaking;

pursues

or

(7)

(cid:145)large risks(cid:146) shall be as defined by Article 5(d) of Directive
73/239/EEC;

(8)

(cid:145)home Member State(cid:146) means:

(a) where the intermediary is a natural person,

the
Member State in which his residence is situated and
in which he carries on business;

(b) where the intermediary is a legal person, the Member
State in which its registered office is situated or,
if
under its national law it has no registered office, the
Member State in which its head office is situated;

(9)

(cid:145)competent authorities(cid:146) means the authorities which each
Member State designates under Article 6;

(10)

(cid:145)durable medium(cid:146) means any instrument which enables
the customer to store information addressed personally
to him in a manner accessible for future reference for a
period of
the
information and which allows
the unchanged repro-
duction of the information stored.

time appropriate to the purposes of

CHAPTER II

REGISTRATION REQUIREMENTS

Article 3

Registration

Insurance

1.
be
registered by a competent authority as defined in Article
6(2), in their home Member State.

intermediaries

reinsurance

shall

and

2. Without prejudice to the third subparagraph of Article
4(1), Member States shall ensure that registration of insurance
and reinsurance intermediaries is made subject to the fulfilment
of the professional requirements laid down in Article 4.

4. Member States shall ensure that
there is easy public
access to the register or registers referred to in paragraph 1.

5.
Insurance undertakings shall use the insurance and rein-
surance mediation services only of registered insurance inter-
mediaries and reinsurance intermediaries and of the persons
referred to in Article 1(2).

Article 4

Professional requirements

1.
Insurance and reinsurance intermediaries shall possess
appropriate general, commercial and professional knowledge
and ability.

Member States need not apply the requirement referred to in
the first subparagraph to all the persons working either in an
undertaking or for a natural person exercising the activity of
insurance or reinsurance mediation. Member States shall ensure
that the management of such undertakings or natural person
and any staff directly involved in insurance or reinsurance
mediation possess such knowledge and ability.

subparagraph to natural persons

Member States need not apply the requirement referred to in
the first
taking up and
pursuing the activity of insurance mediation whose principal
professional activity is other than insurance mediation and
whose income does not predominantly depend on it. Such a
person shall be permitted to mediate only if an insurance inter-
mediary fulfilling the provisions of this Article or an insurance
undertaking has taken on full responsibility for his actions and
provided him with appropriate and relevant basic training.

2.
Insurance and reinsurance intermediaries shall be of good
repute. In particular, they shall have a clean police record or
any other national equivalent in relation to insurance and rein-
surance business and they shall not have previously been
declared bankrupt, unless they have been rehabilitated in
accordance with national law.

Member States need not apply the requirement referred to in
the first subparagraph to all the persons working either in an
undertaking or for a natural person exercising the activity of
insurance or reinsurance mediation. They shall ensure that the
management of such undertakings or natural persons fulfil that
requirement. They shall ensure that any staff directly involved
in insurance or reinsurance mediation fulfil that requirement.

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intermediaries

Insurance and reinsurance

shall hold
3.
professional
indemnity insurance or some other comparable
guarantee against liability arising from professional negligence,
for at least EUR 1 000 000 per claim, unless such insurance or
comparable guarantee is already provided by an insurance
undertaking, reinsurance undertaking or other undertaking
on whose behalf the insurance or reinsurance intermediary is
acting or for which the insurance or reinsurance intermediary
is empowered to act.

competent

authorities

States under the freedom to provide services or the freedom of
establishment shall first inform the competent authorities of
the home Member State. Within one month of this notification,
those
to the
competent authorities of the Member State or the Member
States within the territories of which the insurance or rein-
surance intermediary intends to carry on business under the
freedom to provide services or the freedom of establishment
the insurance or reinsurance intermediary’s intention and the
fact that he is properly registered.

communicate

shall

4. Member States shall take all necessary action to protect
customers against the inability of the insurance or reinsurance
intermediary to transfer the premium to the insurance or rein-
surance undertaking or to transfer the amount of claim to the
insured.

Such action may take any one of the following forms:

(a) provisions laid down by law whereby monies paid by the
customer to the intermediary are treated as having been
paid to the undertaking, whereas monies paid by the under-
taking to the intermediary are not treated as having been
paid to the customer until the customer actually receives
them;

reinsurance intermediary may start
2.
The insurance or
the date on which he was
business one month after
informed by the competent authority of the home Member
State of the communication referred to in paragraph 1.

3.
The authorities of the Member State in which the inter-
mediary wishes to operate under the freedom to provide
services or the freedom of establishment shall, within one
month of receiving the information referred to in paragraph
1, inform the competent authorities of the home Member State,
if appropriate, of the specific conditions under which, in the
interest of the general good, the business must be carried on in
their territories.

(b) a requirement for insurance and reinsurance intermediaries
to have financial capacity amounting, on a permanent
basis, to 8 % of the annual net retained revenue of inter-
mediaries, subject to a minimum of EUR 15 000;

Article 6

Competent authorities

(c) a requirement that customer’s monies shall be transferred
these
via strictly segregated client accounts and that
accounts shall not be used to reimburse other creditors in
the event of bankruptcy;

(d) a requirement that a guarantee fund be set up.

Exercising the activities of

5.
insurance and reinsurance
mediation shall require that the professional requirements set
out in this Article be fulfilled on a permanent basis.

6. Member States
the
requirements laid down in paragraphs (3) and (4) are fulfilled.

in particular

ensure

shall

that

7. Member States may reinforce the requirements set out in
this Article or add other requirements for the insurance and
reinsurance intermediaries registered within their jurisdiction.

Article 5

1. Member States shall designate the competent authorities
empowered to ensure implementation of this Directive. They
shall inform the Commission thereof, indicating any division of
those duties.

2.
The authorities referred to in paragraph 1 shall be either
public authorities, bodies recognised by national law or bodies
recognised by public authorities expressly empowered for that
purpose by national law.

The authorities concerned shall possess all the powers

3.
necessary for the performance of their functions.

Article 7

Sanctions

Subject

to Article 1(2), Member States shall provide
1.
appropriate sanctions in the event that a person exercising
the activity of
reinsurance mediation is not
insurance or
registered in a Member State.

Notification of establishment

and services

in other

Member States

1.
Any insurance or reinsurance intermediary intending to
carry on business for the first time in one or more Member

Subject

2.
to Article 1(2), Member States shall provide
appropriate sanctions against insurance undertakings that use
the insurance or reinsurance mediation services of persons not
registered in a Member State.

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3. Member States shall provide appropriate sanctions in the
event of an insurance or reinsurance intermediary’s failure to
comply with national provisions adopted pursuant
to this
Directive.

4.
Competent
information on:

authorities

shall

cooperate

and

share

(a) insurance and reinsurance intermediaries who have been

subject to a sanction referred to in paragraph 3;

(b) any negligence, misconduct or inappropriate advice for
which insurance and reinsurance intermediaries have been
held liable;

(c) any redress proceedings instigated against insurance and

reinsurance intermediaries.

5.
All persons required to receive or divulge information in
connection with paragraphs 1 to 4 shall be bound by
professional secrecy, in the same manner as is laid down in
Article 16 of Council Directive 92/49/EEC (1) and Article 15 of
Council Directive 92/96/EEC (2).

(b) whether he advises the customer on insurance cover from a
broad range of insurance undertakings or not. In the latter
the insurance intermediary shall also inform the
case,
customer of
the insurance
the number and identity of
undertakings with which he may and does conduct
business for each class of risk;

(c) any holding, direct or indirect, by the insurance inter-
mediary representing more than 10 % of the voting rights
and of the capital in an insurance or reinsurance under-
taking and of any holding, direct or
indirect, by an
insurance undertaking, reinsurance undertaking or parent
undertaking of an insurance or reinsurance undertaking
representing more than 10 % of the voting rights and of
the capital in the insurance intermediary;

(d) any contractual obligation to conduct

respective
business with one or more insurance undertakings as well
as the names of those undertakings;

the

(e) the party to be held liable for any negligence, misconduct
or inappropriate advice by the intermediary in relation to
the insurance mediation;

Article 8

Complaints

(f)

interested parties

the facility referred to in Article 8 allowing customers and
about
other
insurance and reinsurance intermediaries and,
if appro-
priate, about
complaint and redress
the out-of-court
procedures referred to in Article 9;

to register

complaints

Member States shall ensure the setting-up of a facility allowing
customers and other interested parties to register complaints
about insurance and reinsurance intermediaries.

Article 9

Out-of-court redress

1. Member States shall encourage the setting-up of appro-
priate and effective complaints and redress procedures for the
out-of-court settlement of disputes between insurance inter-
mediaries and customers, using existing bodies where appro-
priate.

2. Member States shall encourage these bodies to cooperate
in the resolution of cross-border disputes.

CHAPTER III

IINFORMATION REQUIREMENTS FOR INTERMEDIARIES

Article 10

Information provided by the insurance intermediary

Prior to any initial contract, an insurance intermediary
the following

1.
shall provide the customer with at
information:

least

(a) his identity and address;

(1) OJ L 228, 11.8.1992, p. 1.
(2) OJ L 360, 9.12.1992, p. 1.

(g) the register in which they have been included and the

means for verifying that they have been registered.

2.
If the insurance intermediary declares that he gives advice
on insurance from a broad range of insurance undertakings
referred to in point (b) of paragraph 1, he shall at least give
advice based on a fair analysis of insurance contracts available
on the market that is sufficient to enable him to recommend
the customer’s
the insurance contract appropriate to meet
needs.

3.
Prior to the conclusion of any specific contract, insurance
intermediaries shall at least specify the demands and the needs
of the customer and clarify the underlying reasons for their
advice.

4.
The information referred to in paragraphs 1, 2 and 3
need not be given when the insurance intermediary mediates
in the insurance of large risks, nor in the case of mediation by
reinsurance intermediaries.

Article 11

Information conditions

All

1.
accordance with Article 10 shall be communicated:

information to be provided to customers

in

(a) on paper or on other durable medium available and

accessible to the customer;

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(b) in a clear and accurate manner, comprehensible to the

customer;

Article 13

Transposition

(c) in an official

language of

the
commitment, or any other language agreed upon by the
contracting parties.

the Member State of

2.
By way of derogation from point (a) of paragraph 1, the
information referred to in Article 10 may be provided orally
only where immediate cover is necessary or requested by the
customer.

CHAPTER IV

FINAL PROVISIONS

Article 12

Repeal of Directive

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by 31 December 2003 at
the latest. They shall
forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain
a reference to this Directive or shall be accompanied by such a
reference on the occasion of their official publication. Member
States shall determine how such reference is to be made.

Article 14

Entry into force

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 15

Addresses

Directive 77/92/EEC is hereby repealed.

This Directive is addressed to the Member States.