Common Position (EC) No 49/2000 of 10 October 2000 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a Directive of the European Parliament and of the Council on the reorganisation and winding-up of insurance undertakings
Date: 2000-10-10
Institutions: Council of the European Union
Subjects: approximation of laws, insurance company, judicial cooperation, judicial proceedings, liquidation

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COMMON POSITION (EC) No 49/2000

adopted by the Council on 10 October 2000

with a view to adopting Directive 2000/…/EC of the European Parliament and of the Council of
… on the reorganisation and winding-up of insurance undertakings

(2000/C 344/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

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

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the Economic and Social
Committee (2),

Acting in accordance with the procedure laid down in
Article 251 of the Treaty (3),

(2)

Whereas:

(1)

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 (4),
as supplemented by Directive 92/49/EEC (5), and first
Council Directive 79/267/EEC of 5 March 1979 on the
coordination of laws, regulations and administrative
provisions relating to the taking-up and pursuit of the
business of direct life assurance (6), as supplemented by
Directive 92/96/EEC (7), provide for a single authoris-

(1) OJ C 71, 19.3.1987, p. 5 and OJ C 253, 6.10.1989, p. 3.
(2) OJ C 319, 30.11.1987, p. 10.
(3) Opinion of the European Parliament of 15 March 1989 (OJ C 96,
17.4.1989, p. 99), confirmed on 2 December 1993, Council
Common Position of 10 October 2000 and Decision of the
European Parliament of ...
(not yet published in the Official
Journal).

(4) OJ L 228, 16.8.1973, p. 3. Directive as last amended by Directive
95/26/EC of the European Parliament and of the Council (OJ
L 168, 18.7.1995, p. 7).

(5) 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, p. 1).

(6) OJ L 63, 13.3.1979, p. 1. Directive as last amended by Directive

95/26/EC.

(7) Council Directive 92/96/EEC of 10 November 1992 on the
coordination of laws, regulations and administrative provisions
life assurance and amending Directives
relating to direct
79/267/EEC and 90/619/EEC (third life assurance Directive) (OJ
L 360, 9.12.1992, p. 1).

ation of the insurance undertakings granted by the
home Member State supervisory authority. This single
authorisation allows the insurance undertaking to carry
out its activities in the Community by means of establish-
ment or free provision of services without any further
authorisation by the host Member State and under the
sole prudential supervision of the home Member State
supervisory authorities.

The insurance directives providing a single authorisation
with Community scope for the insurance undertakings
do not contain coordination rules in the event of
winding-up proceedings. Insurance undertakings as well
as other financial
institutions are expressly excluded
from the
scope of Council Regulation (EC) No
1346/2000 of 29 May 2000 on insolvency proceed-
ings (8). It is in the interest of the proper functioning of
the internal market and of the protection of creditors
that coordinated rules are established at Community
level for winding-up proceedings in respect of insurance
undertakings.

(3)

Coordination rules should also be established to ensure
that the reorganisation measures, adopted by the com-
petent authority of a Member State in order to preserve
or restore the financial soundness of an insurance
undertaking and to prevent as much as possible a
winding-up situation, produce full effects throughout
the Community. The reorganisation measures covered
by this Directive are those affecting pre-existing rights
of parties other than the insurance undertaking itself.
The measures provided for in Article 20 of Directive
73/239/EEC and Article 24 of Directive 79/267/EEC
should be included within the scope of this Directive
provided that they comply with the conditions contained
in the definition of reorganisation measures.

(8) OJ L 160, 30.6.2000, p. 1.

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(4)

(5)

(6)

(7)

(8)

This Directive has a Community scope which affects
insurance undertakings
as defined in Directives
73/239/EEC and 79/267/EEC which have their head
office in the Community, Community branches of
insurance undertakings which have their head office in
third countries and creditors resident in the Community.
This Directive should not regulate the effects of the
reorganisation measures and winding-up proceedings
vis-à-vis third countries.

(9)

This Directive does not seek to harmonise national
legislation concerning reorganisation measures and
winding-up proceedings but aims at ensuring mutual
recognition of Member States’ reorganisation measures
and winding-up legislation concerning insurance under-
takings as well as the necessary cooperation. Such
mutual recognition is implemented in this Directive
through the principles of unity, universality, coordi-
nation, publicity, equivalent treatment and protection of
insurance creditors.

This Directive should concern winding-up proceedings
whether or not they are founded on insolvency and
whether they are voluntary or compulsory. It should
apply to collective proceedings as defined by the home
Member State’s legislation in accordance with Article 9
involving the realisation of the assets of an insurance
undertaking and the distribution of
their proceeds.
Winding-up proceedings which, without being founded
on insolvency, involve for the payment of insurance
claims a priority order in accordance with Article 10
should also be included in the scope of this Directive.
Claims by the employees of an insurance undertaking
arising from employment contracts and employment
relationships should be capable of being subrogated to a
national wage guarantee scheme; such subrogated claims
should benefit from the treatment determined by the
home Member State’s law (lex concursus) according to the
principles of
this
Directive should apply to the different cases of winding-
up proceedings as appropriate.

this Directive. The provisions of

The adoption of reorganisation measures does not
preclude the opening of winding-up proceedings. Wind-
ing-up proceedings may be opened in the absence of, or
following,
the adoption of reorganisation measures
and they may terminate with composition or other
analogous measures, including reorganisation measures.

The definition of branch, in accordance with existing
insolvency principles, should take account of the single
legal personality of the insurance undertaking. The home
Member State’s legislation should determine the way in
which the assets and liabilities held by independent
persons who have a permanent authority to act as agent
for an insurance undertaking should be treated in the
winding-up of an insurance undertaking.

A distinction should be made between the competent
authorities for the purposes of reorganisation measures
and winding-up proceedings and the supervisory auth-
orities of the insurance undertakings. The competent
authorities may be administrative or judicial authorities
depending on the Member State’s legislation. This Direc-
tive does not purport to harmonise national legislation
concerning the allocation of competences between such
authorities.

(10) Only the competent authorities of the home Member
State should be empowered to take decisions on wind-
ing-up proceedings concerning insurance undertakings
(principle of unity). These proceedings should produce
their effects throughout the Community and should be
recognised by all Member States. All the assets and
liabilities of the insurance undertaking should, as a
general rule, be taken into consideration in the winding-
up proceedings (principle of universality).

(11) The home Member State’s law should govern the
winding-up decision concerning an insurance undertak-
ing, the winding-up proceedings themselves and their
effects, both substantive and procedural, on the persons
and legal relations concerned, except where this Direc-
tive provides otherwise. Therefore all the conditions
for the opening, conduct and closure of winding-up
proceedings should in general be governed by the home
Member State’s law. In order to facilitate its application,
this Directive should include a non-exhaustive list of
aspects which, in particular, are subject to the general
rule of the home Member State’s legislation.

(12) The supervisory authorities of the home Member State
and those of all the other Member States should be
informed as a matter of urgency of the opening of
winding-up proceedings (principle of coordination).

(13)

It is of utmost importance that insured persons, policy
holders, beneficiaries and any injured party having a
direct right of action against the insurance undertaking
on a claim arising from insurance operations be protect-
ed in winding-up proceedings. Such protection should
not include claims which arise not from obligations
under insurance contracts or insurance operations but
from civil liability caused by an agent in negotiations for
which, according to the law applicable to the insurance
contract or operation, the agent himself is not respon-
sible under such insurance contract or operation. In
order to achieve this objective Member States should
ensure special treatment for insurance creditors accord-
ing to one of two optional methods provided for in this

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Directive. Member States may choose between granting
insurance claims absolute precedence over any other
claim with respect to assets representing the technical
provisions or granting insurance claims a special rank
which may only be preceded by claims on salaries, social
security, taxes and rights in rem over the whole assets of
the insurance undertaking. Neither of the two methods
provided for in this Directive impedes a Member State
from establishing a ranking between different categories
of insurance claims.

(14) This Directive should ensure an appropriate balance
between the protection of insurance creditors and other
privileged creditors protected by the Member State’s
legislation and not harmonise the different systems of
privileged creditors existing in the Member States.

(15) The two optional methods for treatment of insurance
claims are considered substantially equivalent. The first
method ensures the affectation of assets representing the
technical provisions to insurance claims, the second
method ensures insurance claims a position in the
ranking of creditors which not only affects the assets
representing the technical provisions but all the assets
of the insurance undertaking.

(18) The home Member State should be able to provide that,
where the rights of
insurance creditors have been
subrogated to a guarantee scheme established in such
home Member State, claims by that scheme should not
benefit from the treatment of insurance claims under
this Directive.

(19) The opening of winding-up proceedings should involve
the withdrawal of the authorisation to conduct business
granted to the insurance undertaking unless such author-
isation has previously been withdrawn.

(20) The decision to open winding-up proceedings, which
may produce effects throughout the Community accord-
ing to the principle of universality, should have appropri-
ate publicity within the Community. In order to protect
interested parties, the decision should be published in
accordance with the home Member State’s procedures
and in the Official Journal of the European Communities
and, further, by any other means decided by the other
Member States’ supervisory authorities within their
respective territories. In addition to publication of the
decision, known creditors who are resident
in the
Community should be individually informed of the
decision and this information should contain at least the
elements specified in this Directive. Liquidators should
also keep creditors regularly informed of the progress of
the winding-up proceedings.

(16) Member States which,

in order to protect insurance
creditors, opt for the method of granting insurance
claims absolute precedence with respect to the assets
representing the technical provisions should require
their insurance undertakings to establish and keep up to
date a special register of such assets. Such a register is a
useful instrument for identifying the assets affected to
such claims.

(21) Creditors should have the right to lodge claims or to
submit written observations in winding-up proceedings.
Claims by creditors resident in a Member State other
than the home Member State should be treated in the
same way as equivalent claims in the home Member
State without any discrimination on the grounds of
nationality or residence (principle of equivalent treat-
ment).

(17)

In order
to strengthen equivalence between both
methods of treatment of insurance claims, this Directive
should oblige the Member States which apply the
method set out in Article 10(1)(b) to require every
insurance undertaking to represent, at any moment and
independently of a possible winding-up, claims, which
according to that method may have precedence over
insurance claims and which are registered in the
insurance undertaking’s accounts, by assets allowed by
the insurance directives in force to represent the techni-
cal provisions.

(22) This Directive should apply to reorganisation measures
adopted by a competent authority of a Member State
principles which are similar mutatis mutandis to those
provided for in winding-up proceedings. The publication
of such reorganisation measures should be limited to
the case in which an appeal
in the home Member
State is possible by parties other than the insurance
undertaking itself. When reorganisation measures affect
exclusively the rights of shareholders, members or
employees of
the insurance undertaking considered
in those capacities, the competent authorities should
determine the manner in which the parties affected
should be informed in accordance with relevant legis-
lation.

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(23) This Directive provides for coordinated rules to deter-
mine the law applicable to reorganisation measures and
winding-up proceedings of insurance undertakings. This
Directive does not seek to establish rules of private
international
law determining the law applicable to
contracts and other legal relations. In particular, this
Directive does not seek to govern the applicable rules
on the existence of a contract, the rights and obligations
of parties and the evaluation of debts.

(28)

For the sole purpose of applying the provisions of this
Directive to reorganisation measures and winding-up
proceedings concerning branches situated in the Com-
munity of an insurance undertaking whose head office
is located in a third country, the home Member State
should be defined as the Member State in which the
branch is located and the supervisory authorities and
competent authorities as the authorities of that Member
State.

(24) The general rule of this Directive, according to which
reorganisation measures and the winding-up proceed-
ings are governed by the law of the home Member State,
should have a series of exceptions in order to protect
legitimate expectations and the certainty of certain
transactions in Member States other than the home
Member State. Such exceptions should concern the
effects of such reorganisation measures or winding-up
proceedings on certain contracts and rights, third parties’
rights in rem, reservations of title, set-off, regulated
markets, detrimental acts, third party purchasers and
lawsuits pending.

(25) The exception concerning the effects of reorganisation
measures and winding-up proceedings on certain con-
tracts and rights provided for in Article 19 should be
limited to the effects specified therein and should
not include any other issues related to reorganisation
measures and winding-up proceedings such as the
lodging, verification, admission and ranking of claims
regarding such contracts and rights, which should be
governed by the home Member State’s legislation.

(26) The effects of reorganisation measures or winding-up
proceedings on a lawsuit pending should be governed
by the law of the Member States in which the lawsuit is
pending concerning an asset or a right of which the
insurance undertaking has been divested as an exception
to the application of the law of the home Member State.
The effects of such measures and proceedings on
individual enforcement actions arising from these law-
suits should be governed by the home Member State’s
legislation, according to the general rule of this Directive.

(27) All persons required to receive or divulge information
connected with the procedures of communication pro-
vided for in this Directive should be bound by pro-
fessional secrecy in the same manner as that established
in Article 16 of Directive 92/49/EEC and Article 15 of
Directive 92/96/EC, with the exception of any judicial
authority to which specific national legislation applies.

(29) Where there are branches in more than one Member
State of an insurance undertaking whose head office is
located outside the Community, each branch should be
treated independently with regard to the application of
this Directive. In that case the competent authorities,
supervisory authorities, administrators and liquidators
should endeavour to coordinate their actions,

HAVE ADOPTED THIS DIRECTIVE:

TITLE I

SCOPE AND DEFINITIONS

Article 1

Scope

This Directive applies to reorganisation measures and

1.
winding-up proceedings concerning insurance undertakings.

2.
This Directive also applies, to the extent provided for
in Article 30, to reorganisation measures and winding-up
proceedings concerning branches in the territory of
the
Community of insurance undertakings having their head office
outside the Community.

Article 2

Definitions

For the purpose of this Directive:

(a)

(b)

‘insurance undertaking’ means an undertaking which
has received official authorisation in accordance with
Article 6 of Directive 73/239/EEC or Article 6 of Directi-
ve 79/267/EEC;

‘branch’ means any permanent presence of an insurance
undertaking in the territory of a Member State other than
the home Member State which carries out insurance
business;

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(c)

(d)

(e)

(f)

(g)

‘reorganisation measures’ means measures involving any
intervention by administrative bodies or judicial auth-
orities which are intended to preserve or restore the
financial situation of an insurance undertaking and
which affect pre-existing rights of parties other than the
insurance undertaking itself, including but not limited to
measures involving the possibility of a suspension of
suspension of enforcement measures or
payments,
reduction of claims;

‘winding-up proceedings’ means collective proceedings
involving realising the assets of an insurance undertaking
and distributing the proceeds among the creditors, share-
holders or members as appropriate, which necessarily
involve any intervention by the administrative or the
judicial authorities of a Member State, including where the
collective proceedings are terminated by a composition or
other analogous measure, whether or not
they are
founded on insolvency or are voluntary or compulsory;

‘home Member State’ means the Member State in which
an insurance undertaking has been authorised in accord-
ance with Article 6 of Directive 73/239/EEC or Article 6
of Directive 79/267/EEC;

‘host Member State’ means the Member State other
than the home Member State in which an insurance
undertaking has a branch;

‘competent authorities’ means the administrative or
the Member States which are
judicial authorities of
competent
the reorganisation
measures or the winding-up proceedings;

the purposes of

for

(h)

‘supervisory authorities’ means the competent authorities
within the meaning of Article 1(k) of Directive 92/49/EEC
and of Article 1(l) of Directive 92/96/EEC;

(i)

(j)

(k)

‘administrator’ means any person or body appointed by
the competent authorities for the purpose of adminis-
tering reorganisation measures;

‘liquidator’ means any person or body appointed by the
competent authorities or by the governing bodies of an
insurance undertaking, as appropriate, for the purpose of
administering winding-up proceedings;

‘insurance claims’ means any amount which is owed by
an insurance undertaking to insured persons, policy
holders, beneficiaries or to any injured party having direct
right of action against the insurance undertaking and
which arises from an insurance contract or from any
operation provided for in Article 1(2) and (3), of Direct-
ive 79/267/EC in direct insurance business,
including
amounts set aside for the aforementioned persons, when
some elements of the debt are not yet known. The
premiums owed by an insurance undertaking as a result
of the non-conclusion or cancellation of these insurance
contracts and operations in accordance with the law
applicable to such contracts or operations before the
opening of the winding-up proceedings shall also be
considered insurance claims.

TITLE II

REORGANISATION MEASURES

Article 3

Scope

This title applies to the reorganisation measures defined in
Article 2(c).

Article 4

Adoption of reorganisation measures — Applicable law

1.
Only the competent authorities of the home Member
State shall be entitled to decide on the reorganisation measures
with respect
including its
to an insurance undertaking,
branches in other Member States. The reorganisation measures
shall not preclude the opening of winding-up proceedings by
the home Member State.

2.
The reorganisation measures shall be governed by the
laws, regulations and procedures applicable in the home
Member State, unless otherwise provided in Articles 19 to 26.

3.
The reorganisation measures shall be fully effective
throughout the Community in accordance with the legislation
of the home Member State without any further formalities,
including against third parties in other Member States, even if
the legislation of those other Member States does not provide
for such reorganisation measures or alternatively makes their
implementation subject to conditions which are not fulfilled.

4.
The reorganisation measures shall be effective through-
out the Community once they become effective in the Member
State where they have been taken.

Article 5

Information to the supervisory authorities

The competent authorities of the home Member State shall
inform as a matter of urgency the home Member State’s
supervisory authorities of their decision on any reorganisation
measure, where possible before the adoption of such a measure
and failing that immediately thereafter. The supervisory auth-
orities of the home Member State shall inform as a matter of
urgency the supervisory authorities of all other Member States
of the decision to adopt reorganisation measures including the
possible practical effects of such measures.

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Article 6

Publication

1. Where an appeal is possible in the home Member State
against a reorganisation measure, the competent authorities of
the home Member State, the administrator or any person
entitled to do so in the home Member State shall make public
its decision on a reorganisation measure in accordance with
the publication procedures provided for in the home Member
State and, furthermore, publish in the Official Journal of the
European Communities at the earliest opportunity an extract
from the document establishing the reorganisation measure.
The supervisory authorities of all the other Member States
which have been informed of the decision on a reorganisation
measure pursuant to Article 5 may ensure the publication of
such decision within their territory in the manner they consider
appropriate.

2.
The publications provided for in paragraph 1 shall also
specify the competent authority of the home Member State, the
applicable law as provided in Article 4(2) and the administrator
appointed, if any. They shall be carried out in the official
language or in one of the official languages of the Member
State in which the information is published.

3.
The reorganisation measures shall apply regardless of the
provisions concerning publication set out in paragraphs 1 and
2 and shall be fully effective as against creditors, unless the
competent authorities of the home Member State or the law
of that State provide otherwise.

4. When reorganisation measures affect exclusively the
rights of shareholders, members or employees of an insurance
undertaking, considered in those capacities, this Article shall
not apply unless the law applicable to these reorganisation
measures provides otherwise. The competent authorities shall
determine the manner in which the interested parties affected
by such reorganisation measures shall be informed in accord-
ance with the relevant legislation.

Article 7

Information to known creditors — Right to lodge claims

1. Where the legislation of the home Member State requires
lodgement of a claim with a view to its recognition or provides
for compulsory notification of a reorganisation measure to
creditors who have their normal place of residence, domicile
or head office in that State, the competent authorities of the
home Member State or the administrator shall also inform
known creditors who have their normal place of residence,
domicile or head office in another Member State, in accordance
with the procedures laid down in Articles 15 and 17(1).

2. Where the legislation of the home Member State provides
for the right of creditors who have their normal place of
residence, domicile or head office in that State to lodge claims
or to submit observations concerning their claims, creditors
who have their normal place of residence, domicile or head
office in another Member State shall have the same right to
lodge claims or submit observations in accordance with the
procedures laid down in Articles 16 and 17(2).

TITLE III

WINDING-UP PROCEEDINGS

Article 8

Opening of winding-up proceedings — Information to
the supervisory authorities

1.
Only the competent authorities of the home Member
State shall be entitled to take a decision concerning the opening
of winding-up proceedings with regard to an insurance
undertaking, including its branches in other Member States.
This decision may be taken in the absence, or following the
adoption, of reorganisation measures.

2.
A decision adopted according to the home Member
State’s legislation concerning the opening of winding-up
including its
proceedings of an insurance undertaking,
branches in other Member States, shall be recognised without
further formality within the territory of all other Member
States and shall be effective there as soon as the decision is
effective in the Member State in which the proceedings are
opened.

3.
The supervisory authorities of the home Member State
shall be informed as a matter of urgency of the decision to open
winding-up proceedings, if possible before the proceedings are
opened and failing that immediately thereafter. The supervisory
authorities of the home Member State shall inform as a matter
of urgency the supervisory authorities of all other Member
States of the decision to open winding-up proceedings includ-
ing the possible practical effects of such proceedings.

Article 9

Applicable law

1.
The decision to open winding-up proceedings with
regard to an insurance undertaking, the winding-up proceed-
ings and their effects shall be governed by the laws, regulations
and administrative provisions applicable in its home Member
State unless otherwise provided in Articles 19 to 26.

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The law of the home Member State shall determine in

2.
particular:

(a)

the assets which form part of the estate and the treatment
of assets acquired by, or devolving on, the insurance
undertaking after the opening of the winding-up proceed-
ings;

(b)

insurance claims shall, with respect to the whole of the
insurance undertaking’s assets, take precedence over any
other claim on the insurance undertaking with the only
possible exception of:

(i)

claims by employees arising from employment
contracts and employment relationships;

(b)

the respective powers of the insurance undertaking and
the liquidator;

(ii)

claims by public bodies on taxes;

(c)

the conditions under which set-off may be invoked;

(iii) claims by social security systems;

the effects of the winding-up proceedings on current
contracts to which the insurance undertaking is party;

(iv) claims on assets subject to rights in rem.

the effects of the winding-up proceedings on proceedings
brought by individual creditors, with the exception of
lawsuits pending as provided for in Article 26;

the claims which are to be lodged against the insurance
undertaking’s estate and the treatment of claims arising
after the opening of winding-up proceedings;

the rules governing the lodging, verification and admis-
sion of claims;

the rules governing the distribution of proceeds from the
realisation of assets, the ranking of claims, and the rights
of creditors who have obtained partial satisfaction after
the opening of winding-up proceedings by virtue of a
right in rem or through a set-off;

2. Without prejudice to paragraph 1, Member States may
provide that the whole or a part of the expenses arising
from the winding-up procedure, as defined by their national
legislation, shall take precedence over insurance claims.

3. Member States which have opted for the method pro-
vided for in paragraph 1(a) shall require that
insurance
undertakings establish and keep up to date a special register in
line with the provisions set out in the Annex.

Article 11

the conditions for and the effects of closure of winding-
up proceedings, in particular by composition;

Subrogation to a guarantee scheme

creditors’ rights after the closure of winding-up proceed-
ings;

(k) who is to bear the cost and expenses incurred in the

winding-up proceedings;

(l)

the rules relating to the voidness, voidability or unen-
forceability of legal acts detrimental to all the creditors.

The home Member State may provide that, where the rights of
insurance creditors have been subrogated to a guarantee
scheme established in that Member State, claims by that
scheme shall not benefit from the provisions of Article 10(1).

Article 12

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Article 10

Representation of preferential claims by assets

Treatment of insurance claims

1. Member States shall ensure that insurance claims take
precedence over other claims on the insurance undertaking
according to one or both of the following methods:

(a)

insurance claims shall, with respect to assets representing
the technical provisions,take absolute precedence over
any other claim on the insurance undertaking;

By way of derogation from Article 18 of Directive 73/239/EEC
and Article 21 of Directive 79/267/EEC, Member States which
apply the method set out in Article 10(1)(b) of this Directive
shall require every insurance undertaking to represent, at any
moment and independently from a possible winding-up, the
claims which may take precedence over insurance claims
pursuant to Article 10(1)(b) and which are registered in the
insurance undertaking’s accounts, by assets mentioned in
Article 21 of Directive 92/49/EEC and Article 21 of Directive
92/96/EEC.

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Article 13

Withdrawal of the authorisation

1. Where the opening of winding-up proceedings is decided
in respect of an insurance undertaking, the authorisation of
the insurance undertaking shall be withdrawn, except to the
extent necessary for the purposes of paragraph 2, in accord-
ance with the procedure laid down in Article 22 of Direct-
ive 73/239/EEC and Article 26 of Directive 79/267/EEC, if the
authorisation has not been previously withdrawn.

2.
The withdrawal of authorisation pursuant to paragraph 1
shall not prevent the liquidator or any other person entrusted
by the competent authorities from carrying on some of the
insurance undertakings’ activities in so far as that is necessary
or appropriate for the purposes of winding-up. The home
Member State may provide that such activities shall be carried
the
on with the consent and under the supervision of
supervisory authorities of the home Member State.

Article 14

Publication

1.
The competent authority, the liquidator or any person
appointed for that purpose by the competent authority shall
publish the decision to open winding-up proceedings in
accordance with the publication procedures provided for in
the home Member State and also publish an extract from the
winding-up decision in the Official
Journal of the European
Communities. The supervisory authorities of all
the other
Member States which have been informed of the decision to
open winding-up proceedings in accordance with Article 8(3)
may ensure the publication of such decision within their
territories in the manner they consider appropriate.

The publication of the decision to open winding-up
2.
proceedings provided for in paragraph 1 shall also specify the
competent authority of the home Member State, the applicable
law and the liquidator appointed. It shall be in the official
language or in one of the official languages of the Member
State in which the information is published.

Article 15

Information to known creditors

1. When winding-up proceedings are opened, the com-
petent authorities of the home Member State, the liquidator or
any person appointed for that purpose by the competent
authorities shall without delay individually inform by written
notice each known creditor who has his normal place of
residence, domicile or head office in another Member State
thereof.

2.
The notice referred to in paragraph 1 shall in particular
deal with time limits, the penalties laid down with regard to
those time limits, the body or authority empowered to accept
the lodgement of claims or observations relating to claims and
the other measures laid down. The notice shall also indicate
whether creditors whose claims are preferential or secured in
rem need to lodge their claims. In the case of insurance claims,
the notice shall further indicate the general effects of the
winding-up proceedings on the insurance contracts, in particu-
lar, the date on which the insurance contracts or the operations
will cease to produce effects and the rights and duties of
insured persons with regard to the contract or operation.

Article 16

Right to lodge claims

1.
Any creditor who has his normal place of residence,
domicile or head office in a Member State other than the home
Member State, including Member States’ public authorities,
shall have the right to lodge claims or to submit written
observations relating to claims.

2.
The claims of all creditors who have their normal place
of residence, domicile or head office in a Member State other
than the home Member State, including the aforementioned
authorities, shall be treated in the same way and accorded the
same ranking as claims of an equivalent nature lodgeable by
creditors who have their normal place of residence, domicile
or head office in the home Member State.

3.
Except in cases where the law of the home Member State
allows otherwise, a creditor shall send copies of supporting
documents, if any, and shall indicate the nature of the claim,
the date on which it arose and the amount, whether he alleges
preference, security in rem or reservation of title in respect of
the claim and what assets are covered by his security. The
precedence granted to insurance claims by Article 10 need not
be indicated.

Article 17

Languages and form

1.
The information in the notice referred to in Article 15
shall be provided in the official language or one of the official
languages of the home Member State. For that purpose a form
shall be used bearing the heading ‘Invitation to lodge a claim;
time limits to be observed’ or, where the law of the home
Member State provides for the submission of observations
relating to claims, ‘Invitation to submit observations relating
to a claim; time limits to be observed’,
in all the official
languages of the European Union.

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However, where a known creditor is a holder of an insurance
claim, the information in the notice referred to in Article 15
shall be provided in the official language or one of the official
languages of the Member State in which the creditor has his
normal place of residence, domicile or head office.

2.
Any creditor who has his normal place of residence,
domicile or head office in a Member State other than the home
Member State may lodge his claim or submit observations
relating to his claim in the official language or one of the
official languages of that other Member State. However, in that
the lodgement of his claim or the submission of
event
observations on his claim, as appropriate, shall bear the
heading ‘Lodgement of claim’ or ‘Submission of observations
relating to claims’, as appropriate, in the official language or
one of the official languages of the home Member State.

Article 20

Third parties’ rights in rem

The opening of reorganisation measures or winding-up
1.
proceedings shall not affect the rights in rem of creditors or
third parties in respect of tangible or intangible, movable or
immovable assets — both specific assets and collections of
indefinite assets as a whole which change from time to time
— belonging to the insurance undertaking which are situated
within the territory of another Member State at the time of the
opening of such measures or proceedings.

Article 18

The rights referred to in paragraph 1 shall in particular

2.
mean:

Regular information to the creditors

1.
Liquidators shall keep creditors regularly informed, in an
appropriate manner, in particular regarding the progress of
the winding-up.

The supervisory authorities of the Member States may
information on developments in the winding-up
the home

2.
request
procedure from the supervisory authorities of
Member State.

TITLE IV

PROVISIONS COMMON TO REORGANISATION MEASURES
AND WINDING-UP PROCEEDINGS

Article 19

Effects on certain contracts and rights

By way of derogation from Articles 4 and 9, the effects of
the opening of reorganisation measures or of winding-up
proceedings on the contracts and rights specified below shall
be governed by the following rules:

(a)

(b)

(c)

employment contracts and employment relationships
shall be governed solely by the law of the Member State
applicable to the employment contract or employment
relationship;

a contract conferring the right to make use of or acquire
immovable property shall be governed solely by the law
of the Member State in whose territory the immovable
property is situated;

the insurance undertaking with respect

rights of
to
immovable property, a ship or an aircraft subject to
registration in a public register shall be governed by the
law of the Member State under whose authority the
register is kept.

(a)

(b)

(c)

the right to dispose of assets or have them disposed of
and to obtain satisfaction from the proceeds of or income
from those assets, in particular by virtue of a lien or a
mortgage;

the exclusive right to have a claim met, in particular a
right guaranteed by a lien in respect of the claim or by
assignment of the claim by way of a guarantee;

the right to demand the assets from, and/or to require
restitution by, anyone having possession or use of them
contrary to the wishes of the party so entitled;

(d)

a right in rem to the beneficial use of assets.

The right, recorded in a public register and enforceable
3.
against third parties, under which a right in rem within the
meaning of paragraph 1 may be obtained, shall be considered
a right in rem.

Paragraph 1 shall not preclude actions for voidness,

4.
voidability or unenforceability referred to in Article 9(2)(l).

Article 21

Reservation of title

The opening of reorganisation measures or winding-up
1.
proceedings against an insurance undertaking purchasing an
asset shall not affect the seller’s rights based on a reservation
of title where at the time of the opening of such measures or
proceedings the asset is situated within the territory of a
Member State other than the State in which such measures or
proceedings were opened.

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2.
The opening of reorganisation measures or winding-up
proceedings against an insurance undertaking selling an asset,
after delivery of the asset, shall not constitute grounds for
rescinding or terminating the sale and shall not prevent the
purchaser from acquiring title where at the time of the opening
of such measures or proceedings the asset sold is situated
within the territory of a Member State other than the State in
which such measures or proceedings were opened.

3.
Paragraphs 1 and 2 shall not preclude actions for
voidness, voidability or unenforceability referred to in
Article 9(2)(l).

Article 22

Set-off

1.
The opening of reorganisation measures or winding-up
proceedings shall not affect the right of creditors to demand
the set-off of their claims against the claims of the insurance
undertaking, where such a set-off is permitted by the law
applicable to the insurance undertaking’s claim.

Paragraph 1 shall not preclude actions for voidness,

2.
voidability or unenforceability referred to in Article 9(2)(l).

(b)

that law does not allow any means of challenging that act
in the relevant case.

Article 25

Protection of third-party purchasers

Where, by an act concluded after the adoption of a reorgan-
isation measure or the opening of winding-up proceedings, an
insurance undertaking disposes, for a consideration, of:

(a)

an immovable asset;

(b)

(c)

a ship or an aircraft subject to registration in a public
register; or

transferable or other securities whose existence or transfer
presupposes entry in a register or account laid down by
law or which are placed in a central deposit system
governed by the law of a Member State,

the validity of that act shall be governed by the law of the
Member State within whose territory the immovable asset is
situated or under whose authority the register, account or
system is kept.

Article 23

Regulated markets

Article 26

Lawsuits pending

1. Without prejudice to Article 20 the effects of a reorgan-
isation measure or the opening of winding-up proceedings on
the rights and obligations of the parties to a regulated market
shall be governed solely by the law applicable to that market.

The effects of reorganisation measures or winding-up proceed-
ings on a pending lawsuit concerning an asset or a right of
which the insurance undertaking has been divested shall be
governed solely by the law of the Member State in which the
lawsuit is pending.

2.
Paragraph 1 shall not preclude any action for voidness,
voidability, or unenforceability referred to in Article 9(2)(l)
which may be taken to set aside payments or transactions
under the law applicable to that market.

Article 24

Detrimental acts

Article 9(2)(l) shall not apply, where a person who has
benefited from a legal act detrimental to all the creditors
provides proof that:

(a)

the said act is subject to the law of a Member State other
than the home Member State; and

Article 27

Administrators and liquidators

1.
The administrator’s or liquidator’s appointment shall be
evidenced by a certified copy of the original decision appoint-
ing him or by any other certificate issued by the competent
authorities of the home Member State.

A translation into the official language or one of the official
languages of the Member State within the territory of which
the administrator or liquidator wishes to act may be required.
No legalisation or other similar formality shall be required.

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2.
Administrators and liquidators shall be entitled to exer-
cise within the territory of all the Member States all the powers
which they are entitled to exercise within the territory of the
home Member State. Persons to assist or, where appropriate,
represent administrators and liquidators may be appointed,
according to the home Member State’s legislation, in the course
of the reorganisation measure or winding-up proceedings, in
particular in host Member States and, specifically, in order to
help overcome any difficulties encountered by creditors in the
host Member State.

Article 30

Branches of third country insurance undertakings

1.
Notwithstanding the definitions laid down in Article 2(e),
(f) and (g) and for the purpose of applying the provisions of
this Directive to the reorganisation measures and winding-up
proceedings concerning a branch situated in a Member State
of an insurance undertaking whose head office is located
outside the Community:

3.
In exercising his powers according to the home Member
State’s legislation, an administrator or liquidator shall comply
with the law of the Member States within whose territory he
wishes to take action, in particular with regard to procedures
for the realisation of assets and the informing of employees.
Those powers may not include the use of force or the right to
rule on legal proceedings or disputes.

(a)

(b)

‘home Member State’ means the Member State in which
the branch has been granted authorisation according to
Article 23 of Directive 73/239/EEC and Article 27 of
Directive 79/267/EEC; and

‘supervisory authorities’ and ‘competent authorities’ mean
such authorities of the Member State in which the branch
was authorised.

Article 28

Registration in a public register

1.
The administrator, liquidator or any other authority or
person duly empowered in the home Member State may
request that a reorganisation measure or the decision to open
winding-up proceedings be registered in the land register, the
trade register and any other public register kept in the other
Member States.

However, if a Member State prescribes mandatory registration,
the authority or person referred to in subparagraph 1 shall
take all the measures necessary to ensure such registration.

The costs of registration shall be regarded as costs and

2.
expenses incurred in the proceedings.

Article 29

Professional secrecy

All persons required to receive or divulge information in
connection with the procedures of communication laid down
in Articles 5, 8 and 30 shall be bound by professional secrecy,
in the same manner as laid down in Article 16 of Directive
92/49/EEC and Article 15 of Directive 92/96/EEC, with the
exception of any judicial authorities to which existing national
provisions apply.

2. When an insurance undertaking whose head office is
outside the Community has branches established in more than
one Member State, each branch shall be treated independently
with regard to the application of this Directive. The competent
authorities and the supervisory authorities of these Member
States shall endeavour to coordinate their actions. Any admin-
istrators or liquidators shall likewise endeavour to coordinate
their actions.

Article 31

Implementation of this Directive

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive before ... (*). They shall forthwith inform the Com-
mission thereof.

When Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such
reference on the occasion of their official publication. The
methods of making such reference shall be laid down by
Member States.

2.
National provisions adopted in application of this Direc-
tive shall apply only to reorganisation measures or winding-
up proceedings adopted or opened after the date referred to in
paragraph 1. Reorganisation measures adopted or winding-up
proceedings opened before that date shall continue to be
governed by the law that was applicable to them at the time of
adoption or opening.

(*) Two years after the date of entry into force of this Directive.

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3. Member States shall communicate to the Commission
the text of the main provisions of domestic law which they
adopt in the field governed by this Directive.

Article 33

Addressees

Article 32

Entry into force

This Directive is addressed to the Member States.

Done at ...

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

For the European Parliament

For the Council

The President

The President

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ANNEX

SPECIAL REGISTER REFERRED TO IN ARTICLE 10(3)

1.

Every insurance undertaking must keep at its head office a special register of the assets used to cover the
technical provisions calculated and invested in accordance with the home Member State’s rules.

2. Where an insurance undertaking transacts both non-life and life business, it must keep at its head office separate
registers for each type of business. However, where a Member State authorises insurance undertakings to cover
life and the risks listed in points 1 and 2 of Annex A to Directive 73/239/EEC, it may provide that those
insurance undertakings must keep a single register for the whole of their activities.

3.

The total value of the assets entered, valued in accordance with the rules applicable in the home Member State,
must at no time be less than the value of the technical provisions.

4. Where an asset entered in the register is subject to a right in rem in favour of a creditor or a third party, with
the result that part of the value of the asset is not available for the purpose of covering commitments, that fact
is recorded in the register and the amount not available is not included in the total value referred to in point 3.

5. Where an asset employed to cover technical provisions is subject to a right in rem in favour of a creditor or a
third party, without meeting the conditions of point 4, or where such an asset is subject to a reservation of title
in favour of a creditor or of a third party or where a creditor has a right to demand the set-off of his claim
against the claim of the insurance undertaking, the treatment of such asset in case of the winding-up of the
insurance undertaking with respect to the method provided for in Article 10(1)(a) shall be determined by the
legislation of the home Member State except where Articles 20, 21 or 22 apply to that asset.

6.

7.

8.

9.

The composition of the assets entered in the register in accordance with points 1 to 5, at the time when
winding-up proceedings are opened, must not thereafter be changed and no alteration other than the correction
of purely clerical errors must be made in the registers, except with the authorisation of the competent authority.

Notwithstanding point 6, the liquidators must add to the said assets the yield therefrom and the value of the
pure premiums received in respect of the class of business concerned between the opening of the winding-up
proceedings and the time of payment of the insurance claims or until any transfer of portfolio is effected.

If the product of the realisation of assets is less than their estimated value in the registers, the liquidators must
be required to justify this to the home Member States’ competent authorities.

The supervisory authorities of the Member States must take appropriate measures to ensure full application by
the insurance undertakings of the provisions of this Annex.

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STATEMENT OF REASONS

I.

INTRODUCTION

1. On 23 January 1987, the Commission forwarded to the Council a proposal for a Directive on
the reorganisation and winding-up of insurance undertakings based on Article 47(2) of the
EC Treaty.

The European Parliament gave its opinion at first reading on 14 March 1989. The Economic
and Social Committee gave its opinion on 23 September 1987. Taking into account these
opinions, the Commission presented an amended proposal on 18 September 1989.

2. On 10 October 2000, the Council adopted its Common Position pursuant to Article 251 of

the Treaty.

II. OBJECTIVE

The purpose of the Directive is to establish, for the proper functioning of the internal market and
the protection of the creditors:

— coordination rules to ensure that the reorganisation measures adopted by the competent
authority of the home Member State in order to preserve or restore the financial soundness of
an insurance undertaking, as well as the measures adopted by persons or bodies appointed by
those authorities to administer the reorganisation measures, are recognised and implemented
throughout the Community, and

— coordination rules for winding-up proceedings in order to ensure that these proceedings
commenced in the home Member State are recognised and have full effects throughout the
Community, in accordance with the principles of unity and universality.

The Commission proposal and amended proposal had as their objective the regulation of compulsory
winding-up proceedings. The Common Position adopted by the Council has a wider scope since it
also covers reorganisation measures and voluntary winding-up proceedings. The Council has not
maintained the terminological division between special and normal compulsory winding-up
proceedings but covers, nevertheless, winding-up proceedings based and not based on insolvency.
In the view of the Council, this extension of the scope is justified taking into consideration the
overall objective of the proposed Directive of protecting the interests of creditors and ensuring the
proper functioning of the insurance industry within the common market.

The changes made by the Council are also justified by the obvious changes in the legislative
environment during the extended examination of the amended proposal, most notably the third
Directives, which are referred to in recital 1. The Council has also taken into account the
developments in the parallel related legislative processes for the Insolvency Regulation (1) as well as
the Common Position for a Directive on the reorganisation and winding-up of credit institutions (2).
Credit institutions and insurance companies were both exempted from the Insolvency Regulation
because they are subject to special arrangements and because the national supervisory authorities
often have extremely wide-ranging powers of intervention. The proposal for a Directive on the
reorganisation and winding-up of credit institutions has been examined in parallel with this proposal
concerning insurance undertakings, and similar provisions have been introduced to the extent
sector-specific circumstances have made it possible.

(1) Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings.
(2) Common Position (EC) No 43/2000 adopted by the Council on 17 July 2000 with a view to adopting a Directive
of the European Parliament and of the Council on the reorganisation and winding-up of credit institutions (OJ
C 300, 20.10.2000, p. 13).

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III. ANALYSIS OF THE COMMON POSITION

III.1. Taking account of Parliament’s amendments

The Council has accepted, in substance, all three Amendments by the European Parliament, which
were also taken into account in substance by the Commission in its amended proposal.

— Article 6 dealing with the publication requirements for reorganisation measures and Article 14
dealing with the same for winding-up proceedings take account of the concern of the European
Parliament for adequate publicity for the decision, in addition to the publication in the Official
Journal of the European Communities. However, these provisions as amended by the Council refer
to the publication procedures of the home Member State and, as regards other Member States,
their supervisory authorities, having been informed of the reorganisation measure or winding-
up proceedings, may ensure the publication of such decision within their respective territories
in the way they consider appropriate. Recital 20 of the Common Position underlines the need
for publicity respectively.

— Article 4(2) dealing with the effects of reorganisation measures and Article 8(2) dealing with the
effects of winding-up proceedings in other Member States have been redrafted in the same spirit
as Articles 8 and 10 of the Commission’s amended proposal and Amendments 2 and 3 of the
European Parliament. The Council considers its wordings in Articles 4(2) and 8(2) to be adequate
and producing the same results as aimed at by the Commission and the European Parliament.

III.2. Structure

Due to changes in the scope and in the terminological approach, the body of the Common Position
consists of four new titles. Title I defines the scope of the Directive (Article 1) and contains the
definitions of the terms used in the Directive (Article 2). Title II deals with reorganisation measures
while Title III deals with winding-up proceedings. Finally, Title IV contains provisions common to
reorganisation measures and winding-up proceedings.

A special register referred to in Article 10(3) is given in the Annex to this Directive.

The Common Position applies to the branches of non-Community insurance undertakings as well,
but, unlike the amended proposal, these matters have not been treated in a separate title, but in
Article 30 to which reference is made in Article 1(2)

III.3. Recitals

The Council has amended the recitals of the Directive in accordance with the redrafting of the
Articles by introducing new recitals and replacing the recitals contained in the amended proposal by
new ones. The new recitals include, inter alia, the following:

— Recitals 1 and 2 take account of the introduction of the third Insurance Directives,

— Recital 3 relates to the provisions for reorganisation measures, while recital 22 concerns the
relationship between the principles applying to reorganisation measures on the one hand and
winding-up proceedings on the other,

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— Recital 5 concerns the provisions for winding-up proceedings within the meaning of this

Directive as well as to the treatment of certain subrogated claims,

— Recitals 9 and 10 define the objective of the Directive and the principles on which it is based,

— Recitals 23, 24, 25 and 26 relate to the law applicable taken that the Common Position follows
the example of the Insolvency Regulation by containing some conflict-of-laws provisions.

III.4. Title 1 — Scope and definitions

Article 1 provides for the scope of the Directive. As compared to the amended proposal, the scope
includes reorganisation measures and voluntary winding-up proceedings. This Article also states the
extent of the application of the Directive to reorganisation measures and winding-up proceedings
concerning branches in the territory of the Community of insurance undertakings having their head
office outside the Community.

A separate Article 2 on definitions for the purposes of this Directive has been added by the Council.

III.5. Title II — Reorganisation measures

This title has been added by the Council to provide coordination rules for the preservation and
restoration of the financial soundness of an insurance undertaking as well as in order to make the
decisions adopted by persons or bodies appointed by the authorities to administer the reorganisation
measures recognised and implemented throughout the Community. The main features of the articles
of this title are as follows.

Article 3 has been added to restrict the scope of Directive to those reorganisation measures which
are defined in Article 2(c) to be those affecting the pre-existing rights of parties other than the
insurance undertaking itself. Recital 3 explains, furthermore, that the measures provided for in
Article 20 of Directive 73/239/EEC and Article 24 of Directive 79/267/EEC should be included
within the scope of the Directive provided that they comply with the conditions contained in the
definition of reorganisation measures.

Article 4 lays down the principles of unity and universality as regards reorganisation measures. Only
the competent authorities of the home Member State shall be entitled to decide on the measures,
which shall be fully effective throughout the Community. This Article also provides for the
application of the home Member State laws, regulations and procedures, exceptions to which are
provided for in Articles 19 to 26.

Articles 5, 6 and 7 introduce information requirements between the authorities as well as publication
and communication requirements vis-à-vis creditors and other interested parties. The Council has
attached a lot of attention in providing that the interested parties will receive information about the
reorganisation measures, however, also leaving discretion to national authorities in some situations.

Article 6 creates an obligation for the relevant authority or person to make public a decision on a
reorganisation measure according to the publication procedures of the home Member State and to
publish an extract of the document establishing the measure in the Official Journal of the European
Communities. Paragraph 1 leaves it to the supervisory authorities of the Member State other than the
home Member State to determine the manner in which these ensure the publication of a decision
after having been informed of it pursuant to Article 5.

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When reorganisation measures affect exclusively the rights of shareholders, members or employees
of an insurance undertaking, considered in those capacities, the publication requirements envisaged
in Article 6 apply only to the extent provided for by the law applicable to the reorganisation
measures (the law of the home Member State). The competent authorities shall determine the
manner in which the interested parties affected by such reorganisation measures shall be informed
in accordance with the relevant legislation.

Article 7 creates an obligation for the authorities of the home Member State to inform the known
creditors in other Member States in cases where the home Member State legislation requires the
lodgement of a claim for its recognition or where it requires the compulsory notification of a
reorganisation measure to domestic creditors. This Article places creditors in other Member States
on equal footing as regards their right to lodge claims or submit observations. Reference is made to
the procedures set out in Articles 15 to 17 for winding-up proceedings.

III.6. Title III — Winding-up proceedings

Unlike the Commission’s amended proposal, the Common Position applies to both voluntary and
compulsory winding-up proceedings as well as to winding-up proceedings based or not based on
insolvency. The Council has not maintained the division between normal and special compulsory
winding-up-proceedings and has not included in the Common Position any provisions on the actual
procedure of the winding-up proceedings. The main features of this title are as follows.

Article 8 lays down the principles of unity and universality as regards winding-up proceedings. It
also provides for information requirements to the supervisory authorities.

Article 9 provides for the application of the laws, regulations and administrative provisions
applicable in the home Member State, except where Articles 19 to 26 provide otherwise. Following
the example of the Insolvency Regulation, a non-exhaustive list of matters determined by the home
Member State law is given in paragraph 2.

It should be noted that, although Article 9(2)(h) submits the ranking of claims to be determined by
the home Member State law, the Common Position requires that insurance claims shall be given
precedence in accordance with Article 10.

Article 10 lays down two optional methods for the Member States to ensure that insurance claims
take precedence over other claims. Member States shall either require that insurance claims take
absolute precedence over any other claims, but only with respect to assets representing the technical
provisions, or it may be provided that one or more of the four categories of claims defined in
Article 10(1)(b) are given higher priority than all insurance claims have.

For those Member States that opt for an absolute priority for insurance claims, Article 10(3) sets out
a requirement to maintain a register, provided for in the Annex to this Directive, of the assets
representing the technical provisions. For the Member States that opt for giving the listed other
claims precedence, Article 12 lays down a requirement to represent the claims which may take
precedence over insurance claims by assets mentioned in the third Directives (Article 21).

Article 11 gives the home Member State an opportunity to deny the claims presented by guarantee
schemes, which are established in the home Member State and to which insurance claims have been
subrogated, the possibility to enjoy a preferential treatment for insurance claims that is provided for
in Article 10(1).

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Article 13 provides that where the opening of winding-up proceedings is decided in respect of an
insurance undertaking, the authorisation of the insurance undertaking shall be withdrawn unless it
is necessary for the purposes of winding-up. The amended proposal of the Commission contained a
provision (Article 4) whereby an undertaking whose authorisation is withdrawn shall be automati-
cally wound-up. This provision has not been included in the Common Position since it leaves the
winding-up proceedings to be regulated by the home Member State.

Article 14 creates an obligation for the relevant authority or person to publish a decision to open
winding-up proceedings in accordance with the publication procedures of the home Member State
and to publish an extract of the decision in the Official Journal of the European Communities. The
supervisory authorities of other Member States, after having been informed of the winding-up
proceedings, may ensure the publication of the decision in the manner they consider appropriate
(like Article 6 for reorganisation measures).

Article 15 lays down an obligation for the competent authorities of the home Member State, the
liquidator or any person appointed for the purpose of winding-up proceedings, to inform known
creditors in other Member States than the home Member State. Paragraph 2 contains detailed
requirements for the contents of the notice while the questions of language and forms used in giving
the notice are dealt with in Article 17. These requirements are also applied for informing creditors
in other Member States of reorganisation measures pursuant to Article 7(1).

Article 16 puts creditors having their normal place of residence, domicile or head office in a Member
State other than the home Member State on an equal footing with the creditors in the home Member
State in respect of lodging claims and submitting written observations thereon. The Article also lays
down, in its paragraph 3, provisions for the procedure of making a claim.

Article 17 sets out, in paragraph 1, requirements as to the language and forms used in providing the
notice referred to in Article 15. The main rule is that the information in the notice shall be given in
the official language(s) of the home Member State, but a form with a common heading in all
Community languages has to be used. For creditors holding insurance claims, however, the
information has to be provided in one of the official languages of the Member State in which the
creditor has his normal place of residence, domicile or head office.

Article 17 provides further, in paragraph 2, that a creditor in another Member State than the home
Member State may use one of the official languages of his country in making the claim or submitting
his observations. The document has to bear, however, a relevant heading in one of the official
languages of the home Member State.

Article 18 contains an obligation for the liquidators to keep creditors regularly informed in particular
regarding the progress of the winding-up proceedings. There is also a provision pointing out a
possibility for the supervisory authorities of a Member State to request information from the
supervisory authorities of the home Member State.

III.7. Title IV — Provisions common to reorganisation measures and winding-up proceedings

This title deals partly with choice-of-law issues and partly with administrative and definitional
matters that are common to reorganisation measures and winding-up proceedings.

Articles 19 to 26 contain derogations to the general principle of applying the home Member State
legislation provided for in Article 4 in the case of reorganisation measures and in Article 9 in the
case of winding-up proceedings. In drafting these derogations, the Council found it appropriate to
incorporate the approach of the relevant provisions of the Insolvency Convention since there is no
compelling reason, in determining the law applicable in the cases envisaged in these Articles, to treat
insurance undertakings in a way different from other enterprises.

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Article 19 provides that the effects of the reorganisation measures and winding-up proceedings on
employment contracts, on contracts conferring the right to make use or acquire immovable property
and on the rights on immovable property, ships or aircraft shall be governed by the Member State
law applicable to these contracts and rights. Other issues such as the lodging, verification, admission
and ranking of claims regarding such contracts and rights should be governed by the law of the
home Member State, as has been stated in the corresponding recital 25.

Article 20 makes third parties’ (and creditors’) rights in rem in respect of the assets of the insurance
undertaking situated within the territory of another Member State at the time of the opening of
winding-up proceedings or reorganisation measures unaffected. The Article contains a non-
exhaustive list of rights in rem within the meaning of the Article and mentions expressly, in order
to cover also ‘floating charges’, the rights enforceable against third parties and recorded in a public
register under which a right in rem within the meaning of the Article may be obtained.

Article 21 provides that the opening of reorganisation measures or winding-up proceedings against
an insurance undertaking does not affect the seller’s reservation of title in a case where the insurance
company is purchasing an asset, and shall not prevent the purchaser from obtaining title in a case
where the insurance company is selling property (and where the delivery has taken place) when at
the time of the opening of proceedings the asset is situated within the territory of a Member State
other than the State in which the proceedings were opened.

Article 22 states that the opening of reorganisation measures or winding-up proceedings shall not
affect the right of creditors to demand the set-off of their claims against the claims of the insurance
undertaking, where set-off is permitted by the law applicable to the insurance undertaking’s claim.

Article 23 provides a further derogation to the home Member State legislation by making the rights
and obligations of the parties to a regulated market (with the possible exception of rights in rem)
subject to the law applicable to that market.

Articles 20 to 23 all contain a provision according to which they do not preclude actions for
voidness, voidability or unenforceability referred to in Article 9(2)(l). This means that home Member
State legislation will apply to these actions. Article 24, however, sets limits to the application of
home Member State legislation pursuant to Article 9(2)(l). Thus, the said provision does not apply,
where a person who has benefited from a legal act detrimental to all the creditors provides proof
that the said act is subject to the law of a Member State other than the home Member State and that
law does not allow any means of challenging that act in the relevant case. This means that
challenging the act must also be possible under the law applicable to it.

It should be noted, despite the fact that this Article is for practical reasons presented under Title IV,
that Article 24 as well as the provisions of Articles 20 to 23 referred to in the preceding
paragraph deal only with winding-up proceedings, since Article 9(2)(l) deals only with them.

Article 25 is aimed to protect third-party purchasers of immovable property, ship, aircraft or
securities in a situation where an insurance undertaking disposes of these assets after the opening of
winding-up proceedings or the adoption of reorganisation measures. The Article stipulates that the
validity of the act shall be governed by the law of the Member State within whose territory the
immovable asset is situated or under whose authority the register, account or system is kept.

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Article 26 makes the effects of reorganisation measures or winding-up proceedings on a lawsuit
pending concerning an asset or a right of which the insurance undertaking has been divested solely
subject to the law of the Member State in which the lawsuit is pending.

Article 27 contains provisions regarding administrators and liquidators. Their appointment shall be
evidenced by a certified copy of the original decision to appoint him or by any other certificate
issued by the competent authorities of the home Member State. The principle of universality is
equally applied to the powers of administrators and liquidators so that these shall be entitled to
exercise throughout the Community the same powers that they are entitled to exercise in their home
Member State. However, an administrator or liquidator has to comply with the laws of the Member
State within the territory of which he wishes to take action, particularly as regards the realisation of
assets and the informing of employees, although his powers are generally determined by the home
Member State legislation. It has been especially stated that the powers cannot include any use of
force or judiciary powers.

Article 28 gives the administrator, liquidator or any other authority or person duly empowered by
the home Member State a right to request the registration of the winding-up proceedings or
reorganisation measures in the relevant registries. The costs arising from the registration shall be
regarded as costs incurred in the proceedings.

Article 29 lays down a requirement of professional secrecy, which applies to all persons required to
receive or divulge information in connection with the procedures of communication laid down in
Articles 5, 8 and 30, by referring to the relevant provisions of the third Directives, but making an
exception concerning any judicial authorities subject to existing national provisions.

Article 30 contains special provisions on branches of third-country insurance undertakings within
the Community. In the amended proposal, these branches are dealt with by a separate title containing
parallel provisions identical to those applicable to Community undertakings. In the Common
Position, however, the Community branches of third-country insurance undertakings are directly
subject, by virtue of Article 1(2), to the same provisions as Community insurance undertakings. The
purpose of Article 30 is, therefore, to lay down interpretation rules for some relevant definitions set
out in Article 2. Thus, ‘home Member State’ is stated to mean the Member State in which the branch
has been granted authorisation according to Article 23 of Directive 73/239/EEC and Article 27 of
Directive 79/267/EEC and ‘supervisory authorities’ and ‘competent authorities’ mean such authorities
of the Member State in which the branch was authorised.

Article 30 states further that,
if an insurance undertaking whose head office is outside the
Community has branches established in more than one Member State, each branch shall be treated
independently with regard to the application of the Directive. Should there be, for instance,
concurrent winding-up proceedings or reorganisation measures for the branches, the competent
authorities and supervisory authorities of these Member States are requested to endeavour to
coordinate their actions. A similar provision applies to any administrators or liquidators.

Articles 31 to 33 are normal
implementation provisions. The Council has stipulated that the
Directive should apply only to those winding-up proceedings and reorganisation measures which
have been opened or taken after the date set out for the Member States to implement this Directive.
Hence there would be no retroactive application of the Directive.

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IV. CONCLUSION

The Council considers that the Common Position fully complies with the objectives of the
Commission’s amended proposal in creating a regime based principally on the principles of unity
and universality, as well as with the spirit of Parliament’s amendments, inter alia, in strengthening
the creditors possibilities to obtain information. The changes introduced by the Council, fully
supported by the Commission, go even further in promoting the objectives of the amended proposal
and take duly account of the developments in the related legislative environment during the extended
examination time used by the Council.