MANDATORY RULES AND EXCLUDES THEIR APPLICATION TO CERTAIN TYPES OF COMMERCIAL INSURANCE WHICH ARE DEFINED IN DETAIL . IN VIEW OF THE CONSIDERABLE DIFFERENCES EXISTING BETWEEN NATIONAL RULES IN THAT RESPECT IT MUST BE STATED THAT , IN THIS CONNECTION TOO AND SUBJECT TO THE SAME RESERVATION , THE MEMBER STATE IN WHICH THE SERVICE IS PROVIDED IS JUSTIFIED IN REQUIRING AND VERIFYING COMPLIANCE WITH ITS OWN RULES IN RESPECT OF SERVICES PROVIDED WITHIN ITS TERRITORY .
41 IT MUST THEREFORE BE RECOGNIZED THAT , IN THE PRESENT STATE OF COMMUNITY LAW , THE CONSIDERATIONS DESCRIBED ABOVE RELATING TO THE PROTECTION OF POLICY-HOLDERS AND INSURED PERSONS JUSTIFY THE APPLICATION BY THE MEMBER STATE IN WHICH THE SERVICE IS PROVIDED OF ITS OWN LEGISLATION CONCERNING TECHNICAL RESERVES AND THE CONDITIONS OF INSURANCE , PROVIDED THAT THE REQUIREMENTS OF THAT LEGISLATION DO NOT EXCEED WHAT IS NECESSARY TO ENSURE THE PROTECTION OF POLICY-HOLDERS AND INSURED PERSONS . IT THEREFORE REMAINS TO CONSIDER WHETHER IT IS NECESSARY FOR SUCH SUPERVISION TO BE EFFECTED UNDER AN AUTHORIZATION PROCEDURE AND ON THE BASIS OF A REQUIREMENT THAT THE INSURANCE UNDERTAKING SHOULD HAVE A PERMANENT ESTABLISHMENT IN THE STATE IN WHICH THE SERVICE IS PROVIDED .
( C ) THE NECESSITY OF AN AUTHORIZATION PROCEDURE
42 THE COMMISSION DOES NOT DISPUTE THAT THE STATE IN WHICH THE SERVICE IS PROVIDED IS ENTITLED TO EXERCISE A CERTAIN CONTROL OVER INSURANCE UNDERTAKINGS WHICH PROVIDE SERVICES WITHIN ITS TERRITORY . AT THE HEARING IT EVEN ACCEPTED THAT IT WAS PERMISSIBLE TO PROVIDE FOR CERTAIN MEASURES OF SUPERVISION OF THE UNDERTAKING CONCERNED TO BE APPLIED PRIOR TO ITS CONDUCTING ANY BUSINESS IN THE CONTEXT OF THE PROVISION OF SERVICES . IT NEVERTHELESS MAINTAINED THAT SUCH SUPERVISION SHOULD TAKE A FORM LESS RESTRICTIVE THAN THAT OF AUTHORIZATION . IT DID NOT HOWEVER EXPLAIN HOW SUCH A SYSTEM MIGHT WORK .
43 THE GERMAN GOVERNMENT AND THE GOVERNMENTS INTERVENING IN ITS SUPPORT MAINTAIN THAT THE NECESSARY SUPERVISION CAN BE CARRIED OUT ONLY BY MEANS OF AN AUTHORIZATION PROCEDURE WHICH MAKES IT POSSIBLE TO INVESTIGATE THE UNDERTAKING BEFORE IT COMMENCES ITS ACTIVITIES , TO MONITOR THOSE ACTIVITIES CONTINUOUSLY AND TO WITHDRAW THE AUTHORIZATION IN THE EVENT OF SERIOUS AND REPEATED INFRINGEMENTS .
44 IN THAT RESPECT IT SHOULD BE NOTED THAT IN ALL THE MEMBER STATES THE SUPERVISION OF INSURANCE UNDERTAKINGS IS ORGANIZED IN THE FORM OF AN AUTHORIZATION PROCEDURE AND THAT THE NECESSITY OF SUCH A PROCEDURE IS RECOGNIZED IN THE TWO FIRST COORDINATION DIRECTIVES AS REGARDS THE ACTIVITIES TO WHICH THEY REFER . IN EACH OF THOSE DIRECTIVES ARTICLE 6 THEREOF PROVIDES THAT EACH MEMBER STATE MUST MAKE THE TAKING-UP OF THE BUSINESS OF INSURANCE IN ITS TERRITORY SUBJECT TO AN OFFICIAL AUTHORIZATION . AN UNDERTAKING WHICH SETS UP BRANCHES AND AGENCIES IN MEMBER STATES OTHER THAN THAT IN WHICH ITS HEAD OFFICE IS SITUATED MUST THEREFORE OBTAIN AN AUTHORIZATION FROM THE SUPERVISORY AUTHORITY OF EACH OF THOSE STATES .
45 IT MUST ALSO BE OBSERVED THAT THE PROPOSAL FOR A