Common Position (EC) No 34/2002 of 18 March 2002 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 insurance mediation
Date: 2002-03-18
Institutions: Council of the European Union
Subjects: consumer information, financial market, freedom to provide services, insurance, right of establishment, services contract, trade intermediary

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Official Journal of the European Communities

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I

(Information)

COUNCIL

COMMON POSITION (EC) No 34/2002

adopted by the Council on 18 March 2002

with a view to adopting Directive 2002/. . ./EC of the European Parliament and of the Council of
. . . on insurance mediation

(2002/C 145 E/01)

THE EUROPEAN PARLIAMENT AND
THE COUNCIL OF THE EUROPEAN UNION,

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 (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),

Whereas:

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

role in the distribution of
products in the Community.

(2) A first step to facilitate the exercise of freedom of estab-
lishment and freedom to provide services for insurance
agents and brokers was made by Council Directive
to
77/92/EEC of 13 December 1976 on measures
facilitate the effective exercise of freedom of establishment
and freedom to provide services in respect of the activities
of insurance agents and brokers (ex ISIC Group 630) and,
in particular,
transitional measures in respect of those
activities (4).

(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 of 18 December
1991 on insurance intermediaries (5) was largely followed

(1) OJ C 29 E, 30.1.2001, p. 245.
(2) OJ C 221, 7.8.2001, p. 121.
(3) Opinion of the European Parliament of 14 November 2001 (not yet
Journal), Council Common Position of
published in the Official
18 March 2002 and Decision of the European Parliament of . . .
(not yet published in the Official Journal).

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

Accession of 1994.

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

by Member States and helped to bring closer together
national provisions on the professional requirements and
registration of insurance intermediaries.

(5) However, there are still substantial differences between
the
national provisions which
taking-up and pursuit of the activities of insurance and
reinsurance intermediaries in the internal market.
It is
therefore appropriate to replace Directive 77/92/EEC
with a new Directive.

barriers

create

to

(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
func-

the Community hinders the proper

throughout
tioning of the single market in insurance.

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

activity of

services

and

the

for

(9) Various types of persons or institutions, such as agents,
brokers and ‘bancassurance’ 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.

(10) This Directive contains a definition of

‘tied insurance
intermediary’ which takes into account the characteristics
of certain Member States' markets and whose purpose is
to establish the conditions for registration applicable to
such intermediaries. This definition is not intended to
preclude Member States from having similar concepts in
respect of insurance intermediaries who, while acting for
and on behalf of an insurance undertaking and under the
full responsibility of
that undertaking, are entitled to
collect premiums or amounts intended for the customer
in accordance with the financial guarantees laid down by
this Directive.

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(11) This Directive should apply to persons whose activity
consists in providing insurance mediation services to
third parties for remuneration, which may be pecuniary
or take some other form of agreed economic benefit tied
to performance.

products from a broad range of insurance undertakings or
on products provided by a specific number of insurance
undertakings.

(12) This Directive should not apply to persons with another
professional activity, such as tax experts or accountants,
who provide advice on insurance cover on an incidental
basis in the course of that other professional activity,
provided that the purpose of that activity is not to help
the customer conclude or fulfil an insurance or rein-
surance contract, nor the professional management of
claims for an insurance or reinsurance undertaking, nor
the loss adjusting and expert appraisal of claims.

(13) This Directive should not apply to persons practising
an ancillary activity under

insurance mediation as
certain strict conditions.

(14) Insurance

intermediaries

and reinsurance

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

(15) Such registration should allow insurance and reinsurance
intermediaries to operate in other Member States in
accordance with the principles of
freedom of estab-
lishment and freedom to provide services, provided that
an appropriate notification procedure has been followed
between the competent authorities.

(16) 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-
mediaries and against intermediaries not complying with
national provisions adopted pursuant to this Directive.

(17) 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

should have

intermediaries

imposed on insurance

(19) This Directive should specify the obligations which
in providing
insurance
information to customers. A Member State may in this
area maintain or adopt more stringent provisions which
may be
inde-
pendently of
their place of residence where they are
pursuing mediation activities on its territory provided
that any such more stringent provisions comply with
Community law,
including Directive 2000/31/EC of the
European Parliament and of the Council of 8 June 2000
on certain legal aspects of information society services, in
in the internal market
particular electronic commerce,
(Directive on electronic commerce) (1).

intermediaries

(20) 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
In
the products available on the market.
analysis of
addition, all
intermediaries should explain the reasons
underpinning their advice.

(21) 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.

(22) 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.

(23) 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
to cooperate in resolving cross-
disputes out-of-court,
border disputes. Such cooperation could for example be
aimed at enabling customers to contact extra-judicial
bodies established in their Member State of residence
about complaints concerning insurance intermediaries
established in other Member States. The setting up of
the FIN-NET network provides increased assistance to
consumers when using cross-border services.

(18) It is essential for the customer to know whether he is
dealing with an intermediary who is advising him on

(1) OJ L 178, 17.7.2000, p. 1.

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(24) Directive 77/92/EEC should accordingly be repealed,

HAVE ADOPTED THIS DIRECTIVE:

This Directive does not affect a Member State's law in respect
insurance mediation business pursued by insurance and
of
reinsurance
established in a non-member
country and operating on its territory under the principle of
freedom to provide services.

intermediaries

CHAPTER I

SCOPE AND DEFINITIONS

Article 1

Scope

This Directive lays down rules for the taking-up and
1.
pursuit of
and reinsurance
mediation by natural and legal persons which are established
in a Member State or which wish to become established there.

activities of

insurance

the

laws,

countries or

coordination of

in non-member

This Directive does not regulate insurance mediation activities
activities of
carried out
Community insurance or reinsurance undertakings, as defined
in the first Council Directive 73/239/EEC of 24 July 1973 on
regulations and administrative
the
provisions
the
business of direct insurance other than life assurance (1) and
the 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 (2), carried out through insurance intermediaries
in non-member countries.

relating to the taking-up and pursuit of

2.
This Directive shall not apply to persons providing
mediation services for insurance contracts if all the following
conditions are met:

Article 2

Definitions

(a) the insurance contract only requires knowledge of

the

insurance cover that is provided;

For the purpose of this Directive:

(b) the insurance contract is not a life assurance contract;

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

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

than insurance mediation;

(e) the insurance is complementary to the product or service
supplied by any provider, where such insurance covers:

(i) the risk of breakdown,

loss of or damage to goods

supplied by that provider; or

(ii) damage to or loss of baggage and other risks linked to
the
the travel booked with that provider, even if
insurance
liability risks,
provided that the cover is ancillary to the main cover
for the risks linked to that travel;

assurance or

covers

life

(f)

the amount of
EUR 500 and the
contract,
years.

the annual premium does not exceed
insurance
including any renewals, does not exceed five

total duration of

the

3.
This Directive does not apply to insurance and rein-
surance mediation services provided in relation to risks and
commitments located outside the Community.

1.

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

2.

3.

‘reinsurance undertaking’ means an undertaking, other
than an insurance undertaking or a non-member-country
insurance undertaking, the main business of which consists
in accepting risks ceded by an insurance undertaking, a
non-member-country insurance undertaking or other rein-
surance undertakings;

‘insurance mediation’ means the activities of introducing,
proposing or carrying out other work preparatory to the
conclusion of contracts of
insurance, or of concluding
such contracts, or of assisting in the administration and
performance of such contracts, in particular in the event of
a claim.

These activities when undertaken by an insurance under-
taking or an employee of an insurance undertaking who is
acting under the responsibility of the insurance under-
taking are not considered as insurance mediation.

(1) OJ L 228, 16.8.1973, p. 3. Directive as last amended by Directive
2000/26/EC of the European Parliament and of the Council (OJ
L 181, 20.7.2000, p. 65).

(2) OJ L 63, 13.3.1979, p. 1. 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).

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The provision of information on an incidental basis in the
context of another professional activity without
the
in concluding or
purpose of assisting the customer
performing an insurance contract,
the management of
claims of an insurance undertaking on a professional
basis, and loss adjusting and expert appraisal of claims
are also not considered as insurance mediation;

8.

‘large risks’ shall be as defined by Article 5(d) of Directive
73/239/EEC;

9.

‘home Member State’ means:

4.

‘reinsurance mediation’ means the activities of introducing,
proposing or carrying out other work preparatory to the
conclusion of contracts of reinsurance, or of concluding
such contracts, or of assisting in the administration and
performance of such contracts, in particular in the event of
a claim.

(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
if
State in which its registered office is situated or,
under its national law it has no registered office, the
Member State in which its head office is situated;

These activities when undertaken by a reinsurance under-
taking or an employee of a reinsurance undertaking who is
acting under the responsibility of the reinsurance under-
taking are not considered as reinsurance mediation.

10.

‘host Member State’ means the Member State in which an
insurance or reinsurance intermediary has a branch or
provides services;

The provision of information on an incidental basis in the
context of another professional activity without
the
purpose of assisting the customer
in concluding or
the management of
performing a reinsurance contract,
claims of a reinsurance undertaking on a professional
basis, and loss adjusting and expert appraisal of claims
are also not considered as reinsurance mediation;

5.

‘insurance intermediary’ means any natural or legal person
who,
takes up or pursues insurance
mediation;

for remuneration,

6.

‘reinsurance intermediary’ means any natural or
legal
person who, for remuneration, takes up or pursues rein-
surance mediation;

7.

‘tied insurance intermediary’ means any person who carries
on the activity of insurance mediation for and on behalf of
in the case of
one or more insurance undertakings
insurance products which are not
in competition but
does not collect premiums or amounts intended for the
customer and who acts under the full responsibility of
those insurance undertakings
the products which
concern them respectively.

for

11.

‘competent authorities’ means the authorities which each
Member State designates under Article 6;

12.

‘durable medium’ means any instrument which enables the
customer to store information addressed personally to him
in a way accessible for future reference for a period of
time adequate to the purposes of the information and
the
which allows
information stored.

reproduction of

the unchanged

floppy disks,
In particular, durable medium covers
CD-ROMs, DVDs and hard drives of personal computers
on which electronic mail is stored, but it excludes Internet
sites, unless such sites meet the criteria specified in the
first paragraph.

CHAPTER II

REGISTRATION REQUIREMENTS

Article 3

Registration

Insurance

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

intermediaries

reinsurance

shall

and

Any person who carries on the activity of
insurance
mediation in addition to his principal professional
activity is also considered as a tied insurance intermediary
acting under the responsibility of one or several insurance
the products which concern them
undertakings
the insurance is complementary to the
respectively if
goods or services supplied in the framework of
this
principal professional activity and the person does not
collect premiums or amounts intended for the customer;

for

Without prejudice to the first subparagraph, Member States
may stipulate that
insurance and reinsurance undertakings
and other bodies may collaborate with the competent auth-
orities in registering insurance and reinsurance intermediaries
and in the application of the requirements of Article 4 to such
intermediaries. In particular, in the case of tied insurance inter-
mediaries, they may be registered by an insurance undertaking
or by an association of
insurance undertakings under the
supervision of a competent authority.

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Member States need not apply the requirement referred to in
the first and second subparagraphs to all the natural persons
who work in an undertaking and pursue the activity of
insurance or reinsurance mediation.

6. Member States shall ensure that insurance undertakings
use the insurance and reinsurance mediation services only of
registered insurance and reinsurance intermediaries and of the
persons referred to in Article 1(2).

As regards legal persons, Member States shall register such
persons and shall also specify in the register the names of
the natural persons within the management who are
responsible for the mediation business.

Article 4

Professional requirements

2. Member States may establish more than one register for
insurance and reinsurance intermediaries provided that they lay
down the criteria according to which intermediaries are to be
registered.

Member States shall see to it that a single information point is
established allowing quick and easy access to information from
these different registers, which shall be compiled electronically
and kept constantly updated. This information point shall also
provide the identification details of the competent authorities
of each Member State referred to in paragraph 1,
first
subparagraph.

3. Member States shall ensure that registration of insurance
intermediaries,
including tied ones, and reinsurance inter-
mediaries is made subject to the fulfilment of the professional
requirements laid down in Article 4.

Member States shall also ensure that insurance intermediaries,
including tied ones, and reinsurance intermediaries who cease
to fulfil these requirements are removed from the register. If
necessary,
inform the host
Member State of such removal, by any appropriate means.

the home Member State shall

4.
The competent authorities may provide the insurance and
reinsurance intermediaries with a document enabling any
interested party by consultation of the register(s) referred to
in paragraph 2 to verify that they are duly registered.

That document shall at least provide the information specified
in Article 11(1)(a) and (b), and, in the case of a legal person,
the name(s) of the natural person(s) referred to in the fourth
subparagraph of paragraph 1 of this Article.

The Member State shall require the return of the document to
the competent authority which issued it when the insurance or
reinsurance intermediary concerned ceases to be registered.

1.
Insurance and reinsurance intermediaries shall possess
appropriate knowledge and ability, as determined by the
home Member State of the intermediary.

or

Home Member States may adjust the required conditions with
regard to knowledge and ability in line with the activity of
the products
reinsurance mediation and
insurance
distributed, particularly if the principal professional activity of
the intermediary is other than insurance mediation. In such
cases, that intermediary may pursue an activity of insurance
mediation only if an insurance intermediary fulfilling the
conditions of
an insurance undertaking
assumes full responsibility for his actions.

this Article or

Member States may provide that for the cases referred to in the
second subparagraph of Article 3(1), the insurance undertaking
shall verify that the knowledge and ability of the intermediaries
are in conformity with the obligations set out in the first
subparagraph of this paragraph and, if need be, shall provide
such intermediaries with training which corresponds to the
requirements concerning the products
sold by the inter-
mediaries.

Member States need not apply the requirement referred to in
the first subparagraph of this paragraph to all
the natural
persons working in an undertaking who pursue the activity
of insurance or reinsurance mediation. Member States shall
ensure that a reasonable proportion of
the persons within
the management structure of such undertakings who are
insurance products
responsible for mediation in respect of
and all other persons directly involved in insurance or rein-
surance mediation demonstrate the knowledge and ability
necessary for the performance of their duties.

2.
Insurance and reinsurance intermediaries shall be of good
repute. As a minimum, they shall have a clean police record or
any other national equivalent in relation to serious criminal
offences linked to crimes against property or other crimes
related to financial activities and they should not have
previously been declared bankrupt, unless they have been reha-
bilitated in accordance with national law.

5.
Registered insurance and reinsurance intermediaries shall
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.

Member States may, for the cases referred to in the second
subparagraph of Article 3(1), allow the insurance undertaking
to check the good repute of tied insurance intermediaries.

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Member States need not apply the requirement referred to in
the first subparagraph of this paragraph to all the natural
persons who work in an undertaking and who pursue the
insurance and reinsurance mediation. Member
activity of
the management structure of such
States shall ensure that
undertakings and any staff directly involved in insurance or
reinsurance mediation fulfil that requirement.

intermediaries

Insurance and reinsurance

3.
shall hold
professional indemnity insurance covering the whole territory
of the Community or some other comparable guarantee against
liability arising from professional negligence,
least
EUR 1 000 000 applying to each claim and in aggregate
EUR 1 500 000 per year for all claims, 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 or such undertaking has taken on full
responsibility for the intermediary's actions.

for at

shall

take all necessary measures

4. Member States
to
protect customers against the inability of the insurance inter-
mediary to transfer the premium to the insurance undertaking
or to transfer the amount of claim or return premium to the
insured.

Such measures shall take any one or more of the following
forms:

6. Member States may reinforce the requirements set out in
this Article or add other requirements for insurance and rein-
surance intermediaries registered within their jurisdiction.

7.
The amounts referred to in paragraphs 3 and 4 shall be
reviewed regularly in order to take account of changes in the
European index of consumer prices as published by Eurostat.
The first review shall take place five years after the entry into
force of this Directive and the successive reviews every five
years after the previous review date.

The amounts shall be adapted automatically by increasing the
base amount in euro by the percentage change in that index
over the period between the entry into force of this Directive
and the first review date or between the last review date and
the new review date and rounded up to the nearest euro.

Article 5

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
States under the freedom to provide services or the freedom of
inform the competent authorities of the
establishment shall
home Member State.

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

Within a period of one month of such notification,
those
competent authorities shall inform the competent authorities
of any host Member States wishing to know, of the intention
of the insurance or reinsurance intermediary and shall at the
same time inform the intermediary concerned.

(b) a requirement for insurance intermediaries to have financial
capacity amounting, on a permanent basis, to 4 % of the
sum of annual premiums received, subject to a minimum
of EUR 15 000;

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

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

Pursuit of

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

the activities of

The insurance or reinsurance intermediary may start business
one month after the date on which he was informed by the
competent authorities of the home Member State of the notifi-
cation referred to in the second subparagraph. However, that
intermediary may start business
the host
Member State does not wish to be informed of the fact.

immediately if

2. Member States shall notify the Commission of their wish
to be
informed in accordance with paragraph 1. The
Commission shall in turn notify all the Member States of this.

3.
The competent authorities of the host Member State may
take the necessary steps to ensure appropriate publication of
the conditions under which, in the interest of the general good,
the business concerned must be carried on in their territories.

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Article 6

Competent authorities

the right to apply to the courts in the Member State which
adopted it.

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 or bodies recognised by national law or by
public authorities expressly empowered for that purpose by
national law. They shall not be insurance or reinsurance under-
takings.

The competent authorities shall possess all the powers
3.
necessary for the performance of their duties. Where there is
more than one competent authority on its territory, a Member
State shall ensure that those authorities collaborate closely so
that they can discharge their respective duties effectively.

Article 7

Sanctions

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

2. Member States shall provide for appropriate sanctions
against insurance or reinsurance undertakings which use the
insurance or reinsurance mediation services of persons who are
not registered in a Member State and who are not referred to
in Article 1(2).

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

4.
This Directive shall not affect the power of the host
Member States to take appropriate measures to prevent or to
penalise irregularities committed within their territories which
are contrary to legal or regulatory provisions adopted in the
interest of the general good. This shall include the possibility of
preventing offending insurance or reinsurance intermediaries
from initiating any further activities within their territories.

Article 8

Exchange of information between Member States

1.
The competent authorities of the various Member States
shall cooperate in order to ensure the proper application of the
provisions of this Directive.

The competent authorities shall exchange information on
2.
insurance and reinsurance intermediaries if
they have been
subject to a sanction referred to in Article 7(3) or a measure
referred to in Article 7(4) and such information is likely to lead
from the register of such intermediaries. The
to removal
relevant
authorities may
competent
information at the request of an authority.

also exchange

any

All persons required to receive or divulge information in
3.
connection with this Directive shall be bound by professional
secrecy, in the same manner as is laid down in Article 16 of
Council Directive 92/49/EEC of 18 June 1992 on the coor-
laws, regulations and administrative provisions
dination of
relating to direct
insurance other than life assurance and
amending Directives 73/239/EEC and 88/357/EEC (third
non-life insurance Directive) (1) and Article 15 of Council
Directive 92/96/EEC of 10 November 1992 on the coor-
laws, regulations and administrative provisions
dination of
relating to direct
life assurance and amending Directives
79/267/EEC and 90/619/EEC (third life assurance Directive) (2).

Article 9

Complaints

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

Article 10

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.

5.
Any measure adopted involving sanctions or restrictions
on the activities of an insurance or reinsurance intermediary
must be properly justified and communicated to the inter-
mediary concerned. Every such measure shall be subject to

(1) OJ L 228, 11.8.1992, p. 1. Directive as last amended by Directive
2000/64/EC of the European Parliament and of the Council (OJ
L 290, 17.11.2000, p. 27).

(2) OJ L 360, 9.12.1992, p. 1. Directive as last amended by Directive

2000/64/EC of the European Parliament and of the Council.

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CHAPTER III

INFORMATION REQUIREMENTS FOR INTERMEDIARIES

Article 11

Information provided by the insurance intermediary

Prior to the conclusion of any initial insurance contract,
1.
thereof, an
if necessary, on amendment or
and,
insurance intermediary shall provide the customer with at
least the following information:

renewal

(a) his identity and address;

(b) the register in which he has been included and the means

for verifying that he has been registered;

(c) whether he has a holding, direct or indirect, representing
more than 10 % of the voting rights or of the capital in a
given insurance undertaking;

information provided by the customer,

Prior to the conclusion of any specific contract,

the
3.
in particular on
insurance intermediary shall at least specify,
the
the basis of
demands and the needs of
that customer as well as the
underlying reasons for any advice given to the customer on
a given insurance product. These details shall be modulated
according to the complexity of the insurance contract being
proposed.

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.

5. Member States may maintain or adopt stricter provisions
regarding
to in
information requirements
paragraph 1, provided that such provisions comply with
Community law.

referred

the

Member States shall communicate to the Commission the
national provisions set out in the first subparagraph.

(d) whether a given insurance undertaking or parent under-
taking of a given insurance undertaking has a holding,
direct or indirect, representing more than 10 % of
the
in the insurance inter-
the capital
voting rights or of
mediary;

In order to establish a high level of transparency by all appro-
priate means, the Commission shall ensure that the information
it receives relating to national provisions is also communicated
to consumers and insurance intermediaries.

(e) the procedures referred to in Article 9 allowing customers
and other interested parties to register complaints about
insurance and reinsurance intermediaries and,
if appro-
priate, about
the out-of-court complaint and redress
procedures referred to in Article 10.

In addition, an insurance intermediary shall
inform the
customer, concerning the contract that is provided, whether:

(i) he gives advice based on the obligation in paragraph 2 to

provide a fair analysis, or

Article 12

Information conditions

All

1.
accordance with Article 11 shall be communicated:

information to be provided to customers

in

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

accessible to the customer;

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

customer;

(ii) he is under a contractual obligation to conduct insurance
mediation business exclusively with one or more insurance
undertakings.
In that case, he shall also inform the
customer of the names of those insurance undertakings, or

(c)

language of

in an official
the
commitment or in any other language agreed by the
parties.

the Member State of

(iii) he is not under a contractual obligation to conduct
insurance mediation business exclusively with one or
more insurance undertakings and does not give advice
based on the obligation in paragraph 2 to provide a fair
analysis. In that case, he shall also inform the customer of
the names of the insurance undertakings with which he
may and does conduct business.

2.
the
By way of derogation from paragraph 1(a),
information referred to in Article 11 may be provided orally
where the customer requests it, or where immediate cover is
necessary. In those cases, the information shall be provided to
the customer in accordance with paragraph 1 immediately after
the conclusion of the insurance contract.

If the insurance intermediary informs the customer that
2.
he gives advice on the basis of a fair analysis, he is obliged to
give that advice based on an analysis of a sufficient number of
insurance contracts available on the market to enable him to
recommend the insurance contract appropriate to meet the
customer's needs.

customer

In the case of telephone selling, the prior information
3.
given to the
in accordance with
shall be
Community rules applicable to the distance marketing of
consumer financial services. Moreover,
information shall be
provided to the customer in accordance with paragraph 1
immediately after the conclusion of the insurance contract.

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CHAPTER IV

FINAL PROVISIONS

Article 13

Right to apply to the courts

Member States shall ensure that decisions taken in respect of
reinsurance intermediary or an
an insurance intermediary,
insurance undertaking under the laws, regulations and adminis-
trative provisions adopted in accordance with this Directive
may be subject to the right to apply to the courts.

These measures 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 the Member States.

2. Member States shall communicate to the Commission the
text of
the laws, regulations and administrative provisions
which they adopt in the field governed by this Directive. In
that communication they shall provide a table indicating the
national provisions corresponding to this Directive.

Article 16

Entry into force

Article 14

Repeal

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

Directive 77/92/EEC is repealed with effect
referred to in Article 15(1).

from the date

Article 17

Addressees

Article 15

Transposition

This Directive is addressed to the Member States.

Done at . . .

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

For the European Parliament
The President

For the Council
The President

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

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STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. On 22 September 2000, the Commission presented its proposal for a Directive of the European
Parliament and of the Council on insurance mediation (1). The proposal was based on Articles 47(2)
and 55 of the Treaty.

2. The European Parliament delivered its opinion on 14 November 2001 (2).

The Economic and Social Committee delivered its opinion on 30 May 2001 (3).

3. On 26 November 2001, the Council reached a political agreement (4) with a view to the adoption of

a Common Position in accordance with Article 251(2) of the Treaty at a later stage.

4. On 18 March 2002 the Council adopted its Common Position in accordance with Article 251 of the

Treaty.

II. OBJECTIVE

The proposal aims at completing the internal market for services and at the same time contributing to
a high degree of consumer protection. The intermediaries registered will be allowed to take up and
pursue their activities throughout the Community by taking advantage of the freedom of establishment
and the freedom to provide services under the supervision of the authorities of their home Member
State. Furthermore, the proposal lays down rules on information to be given to the customers.

The proposal provides that natural or legal persons who carry out the business of insurance or
reinsurance mediation should be registered on the basis of minimum requirements, especially
regarding their professional knowledge and good repute.

III. ANALYSIS OF THE COMMON POSITION

1. General

The Common Position follows the approach suggested by the Commission, but also takes on
board some of the amendments suggested by the European Parliament. This has been done in
order to take account of the status of certain intermediaries. Therefore the concept of ‘tied
insurance intermediary’
(Article 2(7)) was defined, along with a more substantial role for
insurance undertakings in the registration process of these persons as well as in the verification
of their professional knowledge and competence. Furthermore, the Common Position specifies that
only the names of some persons in the management structure of intermediaries (legal persons)
have to be specified in the registers (Article 3(1)). The treatment of
intermediaries from
(Article 1(3)). The provision on indemnity
non-member countries was clarified as well
insurance and guarantees (Article 4(3)) was modified accordingly,
in addition to which an
aggregate ceiling of EUR 1 500 000 per year and per all claims was added.

The Council added a special provision on information exchange between competent authorities
(Article 7a, now Article 8) with the objective of facilitating the act of deletion of names of persons
from the national registers who have been subject to certain penalties. A special clause regarding
telephone selling (Article 11(3)), now Article 12(3)) was inserted as well. Finally, the information
requirements (Article 10(1), (2) and (3), now Article 11(1), (2) and (3)) have been further clarified
and thus the transparency for the clients has been improved.

(1) OJ C 29 E, 30.1.2001, p. 245.
(2) OJ C . . .
(3) OJ C 221 7.8.2001, p. 121.
(4) OJ C . . .

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2.

European Parliament amendments

The Council has accepted several of Parliament's amendments. Most of them were accepted in
substance, although the exact wording has not been followed. However, some amendments could
not be accepted by the Council.

2.1. The following amendments have been accepted and integrated into the Council text:

Amendment 4, recital 12 (now recital 14)

The reference to the ‘residence’ in this recital is well-founded.

Amendment 56, Article 4(4)(a)

The inclusion of provisions laid down by contract (with the aim of consumer protection) follows
legal traditions in some Member States.

2.2. The following amendments were introduced with modifications to the suggested wording:

Amendment 1, recital 10

An additional statement regarding the exclusion of activities of mere provision of general
information on insurance has to be seen in the context of the much more precise modifications
now made in recital 12, Article 2(3), last subparagraph and Article 2(4) last subparagraph.

Amendment 5, recital 13a (new)

The issue of several registers in the Member States, supplemented by a central information point
for access has been clearly dealt with in the modified Article 3(2). According to the principles
applied to the drafting of Community legislation, a provision of this type is to be made in the
Articles and not in the recitals.

Amendment 7, Article 1(2)(a)

The spirit of the amendment was to improve the wording of this point and exclude simple
contracts not requiring specific knowledge of the insurance business as such. The Council text
to be clearer than in the
provides a positive wording for the same issue and is thought
Commission proposal.

Amendments 8 and 49, Article 1(2)(b)

The substance of this amendment has been dealt with in point (e) of the same paragraph, to which
it systematically belongs. The last part of the amendment ‘basic cover offered as a matter of
routine’ could not be accepted as it would not add any substance to the list of criteria for
exceptions in paragraph 2, especially points (b), (c), (e).

Amendment 9, Article 1(2)(c)

This amendment apparently aims to take care of travel
insurance having some liability risks
included in an ancillary cover. The whole issue has now been much more clearly dealt with by
the new wording of paragraph 2(e).

Amendment 11, Article 1(2)(e)

The objective of the amendment is to embrace all kinds of risks typically linked to a journey.
However, in this regard the Council considers that its wording is more straightforward.

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Amendment 15, Article 2(3)

The Council has not accepted the inclusion of all cases where a person gives information, but has
wanted to exclude incidental information more explicitly than Parliament appears to be doing. The
all-encompassing phrase ‘giving information . . .’ has been deleted and a new subparagraph on
‘information on an incidental basis’ has been introduced in order to clarify the definition of
insurance mediation. The reference to electronic means is unnecessary at this point, as it is the
activity that should be described here and not the selling method. Insurance mediation via elec-
tronic means clearly falls within the scope of the Directive,
therefore the last part of this
amendment is unnecessary.

Amendment 16, Article 2(4)

See reasons referred to under Amendment 15.

Amendment 17, Article 2(6a) (new) (now point (7))

The Council has taken on board the definition of ‘tied insurance intermediary’ in order to specify
the scope of provisions applied to this type of intermediary, especially with regard to their
registration and the role of
their professional
competence. The Commission proposal does not provide such a definition.

insurance undertakings in the verification of

Amendment 21, Article 2(10) (now 12)

The open list of ‘durable mediums’
particular . . .’) in order to clarify the issue.

is included with slight modifications in the wording (‘in

Amendment 23, Article 3(1a) (new)

The amendment by the European Parliament has been integrated in substance in Article 3(1),
second subparagraph. However, the Council prefers its wording ‘under the supervision of a
competent authority’ to the alternative ‘under the responsibility of a competent authority’ since
the duty to supervise already implies responsibility

Amendment 24, Article 3(2) (now Article 3(3))

The substance of the first part of the amendment is taken care of in the new wording of Article
3(3) and Article 4. The last sentence of the amendment which aims to insert a time limit of three
years for the registration would create a very heavy system which has been considered as costly
and difficult to manage in practice.

Amendment 26, Article 3(4)

Although a detailed list is useful, the publication of the detailed list is not mandatory in the
Commission proposal. Moreover, the provisions have to be regarded in the context of an easy
access to the central information point.

Amendment 27, Article 3(5)

The questions concerning the territorial scope of the Directive, namely insurance mediation activities
provided outside the EU, have now been dealt with through an amendment to Article 1(3).

Amendment 29, Article 4(1), third subparagraph

The substance of this amendment has been taken care of by a complete redrafting of Article 4(1).
Moreover, the Council wording sets out in more precise terms than the suggested amendment the
role of the insurance companies as regards the verification of professional requirements.

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Amendment 30, Article 4(2), first subparagraph

The ‘opening of any insolvency proceedings’ seems to be too strict a criterion for the exclusion of
natural persons. The wording ‘declaration of bankruptcy’
is much clearer and better justified.
Furthermore, the Common Position follows the amendment by requiring the police record to
be clean in respect of crimes against property, but adds that criminal offences have to be serious.

Amendment 37, Article 10(1), introductory phrase (now Article 11)

The criterion of
in line with
Parliament's suggestions. However, the wording ‘any initial insurance contract’ was preferable in
the view of the Council as an all-encompassing term.

the contract was introduced in Article 10(1)

‘conclusion’ of

Amendment 44, Article 11(2) (now Article 12, supplemented by a new paragraph 3)

The issues of oral information and telephone communication have now been clarified by two
separate paragraphs, which also deal with the protection of the customer and of the regime laid
down with respect to telephone sales in the Common Position of the Directive of distance
marketing on financial services.

2.3. The following amendments were not accepted and were not incorporated into the Council text:

Amendment 52, recital 10a

The issue has been clearer dealt with through a modification of Article 1(2)(e).

Amendment 6, Article 1(2), introductory phrase

The Council noticed practical problems
from professional
requirements of the Directive (registration, supervision by a competent authority) and at the
same time imposing information requirements on them, because this could raise enforcement
problems and in addition would not reflect the approach in the original Commission proposal.

in excluding certain persons

Amendment 10, Article 1(2)(d)

The main income criterion was estimated as being impractical,
pensioners and students, who should not be subject to the requirements of the Directive.

for example with regard to

Amendment 12, Article 1(2)(f)

Following an extended discussion, the Council preferred an exclusion of insurance contracts that
are renewable, but whose total duration would not exceed five years. This requirement now is
more in line with the other exceptions, particularly in point (e). On the other hand, the threshold
fixed in this point with respect to the amount of the annual premium of the insurance contract
has been reduced from EUR 1 000 to EUR 500.

Amendments 57 and 48, Article 1(2a) (new)

This amendment would introduce a new list of kinds of insurance contracts and types of inter-
mediaries with the objective of exclusion from the scope of the Directive. However some of these
issues are already covered by the current wording of Article 1(2), provided that the conditions laid
down are met (tourist package insurance and some animal
insurance contracts). Some other
activities or persons mentioned should not be excluded, since this would affect the selling of
insurance products involving important risks.

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Amendment 19, Article 2(6b) (new)

The introduction of the definition of an ‘agent of an insurance intermediary’ would add to
complexity. The issue of employees working for an insurance intermediary has furthermore
already been dealt with by the new wording in Articles 3 and 4.

Amendment 18, Article 2(6c) (new)

The Council preferred not to introduce specific provisions for ‘bancassurance’. This was estimated
as being unnecessary as most activities concerned would clearly fall under the scope of the
Directive. Furthermore, the definition proposed is relatively rigid and does not takes account of
different kinds of bancassurance distribution techniques. In the context of bancassurance, however,
the provisions of Articles 3 and 4 (e.g. Article 3(1) second subparagraph) may be of relevance too.

Amendment 20, Article 2(8)(a)

The amendment deals with the case where the place of residence and the place of the professional
activity are different. In the Council's view, there is little need to make this distinction in practice.
Furthermore, the wording in the amendment itself does not enhance clarity, as it could even
introduce the possibility of two home Member States. In contrast, the definition used by the
Council is in line with similar definitions employed in the financial services directives.

Amendment 22, Article 2a (new)

See reason referred to under Amendment 18.

Amendment 25, Article 3(2a) (new)

See reason referred to under Amendment 19.

Amendment 31, Article 4(3)

The wording ‘some other comparable guarantee’ seems to be clear enough. The wording of
Parliament's amendment could be interpreted as reducing the appropriate level of professional
liability of insurance intermediaries. More flexible and less strict rules to cover professional
negligence of intermediaries should not be the objective.

Amendment 32, Article 4a (new)

The Council did not consider it necessary to provide a general ‘grandfathering clause’. Registration
requirements have to be implemented at any regard by the national competent authorities.

Amendment 34, Article 5(3a) (new)

Automatic publication of the list for the public should not be compulsory, but only optional for
the national authorities.

Amendment 54, Article 8

The Council preferred to leave detailed implementation requirements to the Member States in line
with the Commission proposal.

Amendment 36, Article 9(1) (now Article 10)

The proposed amendment rather seemed to be more apt for a recital. An insertion into the
Articles as suggested by Parliament would change the character of a recommendation to an
obligation.

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Amendment 38, Article 10(1)(b) (now Article 11)

The information requirements have been thoroughly reformulated and adapted in a separate
subparagraph after paragraph 1(e). Furthermore, the Council has taken the view that the type
of information concerned should be given anyway and not only on request from the client.
in order to
Otherwise the objective of
ensure transparency would be jeopardised.

information to customers pursued by the proposal

Amendment 55, Article 10(1)(d) (now Article 11)

See reason referred to under Amendment 38.

Amendment 40, Article 10(1)(e) (now Article 11)

The Council preferred to abstain from a definite obligation to mention the liable persons, since
this is a matter to be finally decided by the courts.

Amendments 41 and 60, Article 10(2) (now Article 11)

The Council preferred to follow the Commission proposal and to avoid setting a ‘best possible
advice standard’ to the intermediary, which would be too complicated to implement.

Amendment 42, Article 10(3) (deleted) (now Article 11)

The requirement of specification according to the consumers' needs has been clarified in the
Common Position by inserting a phrase referring to the complexity of the product and the
information provided by the customer himself. With this modification this paragraph lays
down general requirements of product-specific information that have to be considered together
with other legal requirements.

Amendment 43, Article 10(4) (now Article 11)

The substance of this amendment has been sufficiently dealt with in the definitions in Article 1
that exclude certain types of activities.

Amendment 45, Article 11a (new)

The amendment provides that non-registered persons, excluded from the scope of the Directive,
should comply with information requirements. The addressees would thus fall outside the normal
scope of this Directive. In addition, it would be extremely difficult to be implemented in practice
by the Member States since the persons to whom it is addressed are not subject to supervision.
The Council preferred to follow the original approach of the Commission proposal in this regard.

3. Major new elements contained in the Common Position as compared with the

Commission proposal

Article 1(3) — Intermediaries from non-member countries

The clarification of the application of the Directive vis-à-vis non-member countries contributes to
a facilitated implementation. Furthermore, it takes account in substance of European Parliament
amendment 27.

Article 1(2)(e) — Exclusion of certain types of ancillary insurance

The clearer exclusion of certain insurance covers from the scope of the Directive meets the
preoccupations of some parties concerned, for example travel insurance providers. Furthermore,
it takes into account the principles of European Parliament amendments 8, 9 and 11.

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Article 2(7) — Definition of ‘tied intermediary’

The definition of ‘tied intermediary’ is necessary to clarify the scope of the Directive and to explain
the requirements contained in Articles 3 and 4, concerning the role of insurance undertakings in
the process of registration and verification. The responsibility of the insurance undertakings for
the protection of the consumer is thus acknowledged.

Article 3(2) — Different registers and central information point

information point should
Member States may establish more than one register, but a central
safeguard an easy access by other authorities and/or the clients. This requirement would
reconcile the objective of easy information flows with different national
traditions and the
competencies already established.

Article 4(3) — Amounts for aggregate minimum levels for indemnity insurance

The Council has
EUR 1 500 000 per year for all claims.

introduced an aggregate minimum level

for

indemnity insurance of

Article 10(5) (now Article 11(5)) — National requirements regarding information

This provision clarifies that stricter requirements on a national level are possible, but requires at
the same time that national provisions have to be communicated to the Commission. The
provisions can match with national preferences without
free
marketing of insurance products. This provision, as well as the relevant recital, is coherent with
other provisions contained in other acts concerning financial services.

impairing the objective of

Article 11(3) (now Article 12(3)) — Provision on telephone selling

The Council inserted a wording clarifying the application of the Directive with regard to telephone
sales in connection with the Directive on distance marketing of financial services.

4. Conclusion

The Common Position, which has been unanimously adopted by the Council, reinforces the need
for a mandatory legislative framework for insurance mediation services and for a well-defined
consumer protection regime in this respect. It tries at the same time to avoid that the system
becomes unnecessarily cumbersome for those involved.