CELEX: 51990PC0046
Language: en
Date: 1990-03-01
Title: AMENDED PROPOSAL FOR A SECOND COUNCIL DIRECTIVE ON THE COORDINATION OF LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS RELATING TO DIRECT LIFE ASSURANCE, LAYING DOWN PROVISIONS TO FACILITATE THE EFFECTIVE EXERCISE OF FREEDOM TO PROVIDE SERVICES AND AMENDING DIRECTIVE 79/267/EEC

22. 3. 90                               Official Journal of the European Communities                                No C 72/5
                                                                II
                                                       (Preparatory Acts)
                                                  COMMISSION
              Amended proposal for a Second Council Directive on the coordination of laws, regulations and
              administrative provisions relating to direct life assurance, laying down provisions to facilitate the
                  effective exercise of freedom to provide services and amending Directive 79/267/EEC
                                                 COM(90) 46 final — SYN 177
              (Submitted by the Commission pursuant to Article 149 (3) of the EEC Treaty on 9 March 1990)
                                                         (90/C 72/05)
                       INITIAL PROPOSAL                                                 AMENDED PROPOSAL
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                            Unchanged
Having regard to the Treaty establishing the European
Economic Community, and in particular Articles 57 (2)
and 66 thereof,
Having regard to the proposal from the Commission,
In cooperation with the European Parliament,
Having regard to the opinion of the Economic and
Social Committee,
Whereas it is necessary to develop the internal market in
life assurance and in the operations referred to in the
First Council Directive 79/267/EEC of 5 March 1979
on the coordination of laws, regulations and adminis-
trative provisions relating to the taking-up and pursuit of
the business of direct life assurance ('), hereinafter called
'the First Directive'; whereas, in order to achieve that
objective, it is desirable to make it easier for assurance
undertakings having their head office in the Community
to provide services in the Member States, thus making it
possible for policy-holders to have recourse not only to
assurers established in their own country, but also to
assurers which have their head office in the Community
and are established in other Member States;
Whereas, under the Treaty, any discrimination with
regard to freedom to provide services based on the fact
that an undertaking is not established in the Member
0) OJ No L 63, 13. 3. 1979, p. 1.
 ---pagebreak---  No C 72/6                                Official Journal of the European Communities                               22. 3. 90
                         INITIAL PROPOSAL                                               AMENDED PROPOSAL
 State in which the services are provided has been                  Unchanged
 prohibited since the end of the transitional period;
whereas that prohibition applies to services provided
 from any establishment in the Community, whether it be
 the head office of an undertaking or an agency or
 branch;
 Whereas, for practical reasons, it is desirable to define
 provision of services taking into account both the
 assurer's establishment and the place where the
 commitment is to be covered; whereas, therefore
 commitment should also be defined; whereas, moreover,
 it is desirable to distinguish between activities pursued by
way of establishment and activities pursued by way of
 freedom to provide services;
Whereas it is desirable to supplement the First Council
 Direcitve of 5 March 1979 in order, in particular, to
clarify the powers and means of supervision vested in the
supervisory authorities; whereas it is also desirable to lay
down specific provisions regarding the taking-up, pursuit
and supervision of activity by way of freedom to provide
services;
Whereas policy-holders who, by virtue of the fact that
they take the initiative in entering into a commitment in
another State and thus place themselves under the
protection of the legal system of that other State, do not
require special protection in the State of the commitment
should be granted complete freedom to avail themselves
of the widest possible market in life assurance and in the
operations referred to in the First Directive; whereas,
other policy-holders should also be afforded adequate
protection;
Whereas, in the case of group assurances and certain                Whereas in the management of some group pension
individual pensions assurances, the multiplicity and                funds, the multiplicity and complexity of the various
complexity of the various schemes and their close                   schemes and their close connection with social security
connection with social security schemes call for careful            schemes call for careful study; whereas they should
study; whereas they should therefore be excluded from               therefore be excluded from the scope of the provisions
the scope of the provisions specific to freedom to provide          specific to freedom to provide services contained in this
services contained in this Directive; whereas they will             Directive; whereas they will form the subject matter of
form the subject matter for another proposal for a                  another proposal for a Directive;
Directive;
Whereas the provisions in force in the Member States                Unchanged
regarding contract law applicable to the activities
referred to in the First Directive continue to differ;
whereas the freedom to choose, as the law applicable to
the contract, a law other than that of the State of the
commitment may be granted in certain cases, in
accordance with rules which take into account specific
circumstances;
Whereas the First Directive's provisions on transfer of
portfolio should be reinforced and supplemented by
provisions specifically concerning the transfer to another
undertaking of the portfolio of contracts concluded by
way of freedom to provide services;
 ---pagebreak--- 22. 3. 90                              Official Journal of the European Communities                              No C 72/7
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
Whereas, in the interests of protecting policy-holders,          Unchanged
Member States should, at the present stage of the coor-
dination process, be given the option of limiting the
simultaneous pursuit of activity by way of freedom to
provide services and activity by way of establishment;
whereas no such limitation can be provided for where
policy-holders do not require such protection;
Whereas the taking-up and pursuit of activity by way of
freedom to provide services should be subject to
procedures guaranteeing the assurance undertaking's
compliance with provisions regarding financial guaran-
tees, conditions of assurance and premium rates; whereas
those procedures may be relaxed where -the activity
pursued by way of freedom to provide services covers
policy-holders who, by virtue of the characteristics of the
commitment they propose to enter into, do not require
special protection in the State of the commitment;
Whereas, however, in the case of this second category of         Whereas for life assurance contracts entered into by way
policy-holder and where the contract is one of life              of the free provision of services the policy-holder should
assurance, the policy-holder should be given the oppor-          be given the opportunity of cancelling the contract
tunity of cancelling the contract within a period of 30          within a period of between 14 and 30 days;
days;
Whereas the First Directive adopted the principle of             Whereas the First Directive adopted the principle of
prohibiting the simultaneous pursuit of the activities           prohibiting the simultaneous pursuit of the activities
covered by the First Directive on the coordination of            covered by the First Directive on the coordination of
non-life insurance and those covered by the First                 non-life insurance and those covered by the First
Directive; whereas, while it authorized the continued             Directive; whereas, while it authorized the continued
existence of existing composite undertakings, it stated           existence of existing composite undertakings, it stated
that they may not set up agencies or branches for life            that they may not set up agencies or branches for life
assurance; whereas such undertakings should likewise be           assurance; whereas the specific nature of the
prohibited from covering by way of freedom to provide             commitments entered into in the insurance field under
services commitments referred to in the First Directive;          the freedom of services regime nevertheless justifies, at
                                                                  least on a transitional basis as from notification of this
                                                                  Directive to Member States, the introduction of a degree
                                                                  of flexibility in the application of the above principle;
Whereas it is necessary to make provision for special             Unchanged
cooperation in the sphere of freedom to provide services
between the competent supervisory authorities of the
Member States and between those authorities and the
Commission; whereas provision should also be made for
a system of penalties to apply where the undertaking
providing the service fails to comply with the provisions
of the Member State in which the service is provided;
Whereas the technical reserves, including mathematical
reserves, should be subject to the rules of and supervision
by the Member State in which the service is provided
where the provision of services involves commitments in
respect of which the State in which the service is received
 ---pagebreak--- No C 72/8                              Official Journal of the European Communities                                  22. 3. 90
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
wishes to provide special protection for policy-holders;         Unchanged
whereas, however, if such concern to protect policy-
holders is unjustified, the technical reserves, including
mathematical reserves, should remain subject to the rules
of and supervision by the Member State in which the
undertaking is established;
Whereas some Member States do not subject life                   Whereas some Member States do not subject life
assurance contracts and the other operations covered by          assurance contracts and the other operations covered by
the First Directive to any form of indirect taxation, while      the First Directive to any form of indirect taxation, while
others apply special taxes; whereas the structure and rate       others apply special taxes; whereas the structure and rate
of those taxes vary considerably between the Member              of those taxes vary considerably between the Member
States in which they are applied; whereas it is desirable        States in which they are applied; whereas it is desirable
to avoid a situation where those differences lead to             to avoid a situation where those differences lead to
distortions of competition between undertakings in the           distortions of competition between undertakings in the
various Member States; whereas the application of the            various Member States; whereas, pending further
tax arrangements provided for by the Member State in             harmonization, the application of the tax arrangements
which the commitment is entered into is a means of               provided for by the Member State in which the
remedying such mischief; whereas it is for the Member            commitment is entered into is a means of remedying
States to establish a method of ensuring that such taxes         such mischief; whereas it is for the Member States to
are collected;                                                   establish a method of ensuring that such taxes are
                                                                 collected;
Whereas the First Council Directive of 5 March 1979              Unchanged
makes express provision for specific rules concerning the
authorization of agencies and branches belonging to
undertakings whose head offices are outside the
Community;
Whereas it is also desirable to provide for a specific           Whereas provision should be made for a flexible
procedure for all requests for the authorization of a            procedure to make it possible to assess reciprocity with
subsidiary of an undertaking governed by the laws of a           third countries on a Community basis; whereas the aim
third country or the acquisition of a participation by           of this procedure is not to close the Community's
such an undertaking with a view to ensuring that                 financial markets but rather, as the Community intends
Community undertakings benefit from reciprocity in the           to keep its financial markets open to the rest of the
third countries in question; whereas this Directive lays         world, to improve the liberalization of the global
down such a procedure,                                           financial markets in other third countries; whereas, to
                                                                 that end, this Directive provides for procedures for
                                                                 negotiating with third countries and, as a last resort, for
                                                                 the possibility of taking measures involving the
                                                                 suspension of new applications for authorization or the
                                                                 restriction of new authorizations;
                                                                 Whereas it is desirable to take into account, within the
                                                                 meaning of Article 8C of the Treaty, the extent of the
                                                                 effort which needs to be made by certain economies
                                                                 showing differences in development; whereas, therefore,
                                                                 it is desirable to grant certain Member States transitional
                                                                 arrangements for the gradual application of the specific
                                                                 provisions of this Directive relating to freedom to
                                                                 provide services;
                                                                 Whereas, in view of the differences in the national legis-
                                                                 lations, it is also appropriate to grant to those Member
                                                                 States which so wish transitional arrangements enabling
                                                                 them to adapt their legislation before applying in their
                                                                 entirety, as regards group insurance contracts linked to a
                                                                 contract of employment or the intervention of a broker,
                                                                 the provisions of this Directive relating to the case where
                                                                 the policy-holder takes the initiative to conclude a
                                                                 contract by way of provision of services,
 ---pagebreak--- 22. 3. 90                               Official Journal of the European Communities                                No C 72/9
                       INITIAL PROPOSAL                                                 AMENDED PROPOSAL
HAS ADOPTED THIS DIRECTIVE:                                       Unchanged
                           TITLE I
                      General provisions
                           Article 1                                                         Article 1
The object of this Directive is:                                  Unchanged
(a) to supplement First Directive 79/267/EEC;                     (a)
(b) to lay down specific provisions relating to freedom           (b) to lay down specific provisions relating to freedom
    to provide services in respect of the activities referred         to provide services in respect of the activities referred
    to in the First Directive, such provisions being set              to in the said Directive, such provisions being set
    forth in Title III of this Directive.                             forth in Title III of this Directive.
                           Article 2                                                         Article 2
For the purposes of this Directive:                               Unchanged
(a) 'First Directive'means   Directive 79/267/EEC;
(b)  'undertaking':
    — for the purposes of Titles I and II, means any
        undertaking which has received official auth-
        orization under Article 6 or Article 27 of the
        First Directive,
    — for the purposes of Titles III and IV, means any
        undertaking which has received official auth-
        orization under Article 6 of the First Directive;
(c) 'establishment' means the head office, an agency or a
    branch of an undertaking, having regard to Article 3;
(d) 'commitment' means a commitment represented by
    one of the kinds of insurance or operation referred
    to in Article 1 of the First Directive;
(e) 'Member State of the commitment' means the Member
    State where the policy-holder has his habitual
    residence or, if the policy-holder is a legal person,
    the Member State where the latter's establishment, to
    which the contract relates, is situated;
(f) 'Member State of establishment' means the Member
    State in which the establishment covering the
    commitment is situated;
(g) 'Member State of provision of services' means the
    Member State of the commitment where the
    commitment is covered by an establishment situated
    in another Member State;
 ---pagebreak--- No C 72/10                              Official Journal of the European Communities                                22. 3. 90
                       INITIAL PROPOSAL                                                 AMENDED PROPOSAL
(h) 'parent undertaking' means a parent undertaking                (h) 'parent undertaking' means a parent undertaking
     within the meaning of Article 1 of Seventh Council                within the meaning of Articles 1 and 2 of Directive
     Directive 83/349/EEC of 13 June 1983 based on                     83/349/EEC O ;
     Article 54 (3) (g) of the Treaty, on consolidated
     accounts ( ! );
 (i)  'subsidiary' means a subsidiary undertaking in               (i)  'subsidiary' means a subsidiary undertaking within
     accordance with Article 1 of Directive 83/349/EEC.                the meaning of Articles 1 and 2 of Directive
                                                                       83/349/EEC: any subsidiary undertaking shall also
                                                                       be regarded as a subsidiary of the parent undertaking
                                                                       which is at the head of those undertakings.
                           Article 3                                                        Article 3
For the purposes of the First Directive and of this               Unchanged
Directive, any permanent presence of an undertaking in
the territory of a Member State shall be treated in the
same way as an agency or branch, even if that presence
does not take the form of a branch or agency, but
consists merely of an office managed by the under-
taking's own staff or by a person who is independent but
has permanent authority to act for the undertaking as an
agency would.
                           TITLE II
      Provisions supplementary to the First Directive
                           Article 4                                                        Article 4
1.     The law applicable to contracts relating to the acti-      1.      Unchanged
vities referred to in the First Directive shall be the law of
the Member State of the commitment. However, where
the law of that State so allows, the parties may choose
the law of another country.
2.     Where, in one of the cases referred to in Article 13,      2.     Where the policy-holder is a natural person and has
the policy-holder has his habitual residence in a Member          his habitual residence in a Member State other than that
State other than that of which be is a national, the              of which he is a national, the parties may choose the law
parties may choose the law of the Member State of                 of the Member State of which he is a national.
which he is a national.
3.     The Member State whose law governs the contract            3.     Deleted
may not, in a case falling within Article 13, seek to
prevent the policy-holder from entering into any contract
relating to a commitment which may be lawfully
undertaken in the Member State of establishment.
O OJ No L 193, 18. 7. 1983.                                       (') OJ No L 193, 18. 7. 1983.
 ---pagebreak--- 22. 3. 90                               Official Journal of the European Communities                              No C 72/11
                       INITIAL PROPOSAL                                                AMENDED PROPOSAL
4.    Where a State includes several territorial units, each      3.    Where a State includes several territorial units, each
of which has its own rules of law concerning contractual          of which has its own rules of law concerning contractual
obligations, each unit shall be considered a country for          obligations, each unit shall be considered a country for
the purposes of identifying the law applicable under this         the purposes of identifying the law applicable under this
Directive.                                                        Directive.
A Member State in which various territorial units have            A Member State in which various territorial units have
their own rules of law concerning contractual obligations         their own rules of law concerning contractual obligations
shall not be bound to apply the provisions of this                shall not be bound to apply the provisions of this
Directive to conflicts which arise between the laws of            Directive to conflicts which arise between the laws of
those units.                                                      those units.
5.    Nothing in this Article shall restrict the application      4.    Nothing in this Article shall restrict the application
of the rules of the law of the forum in a situation where         of the rules of the law of the forum in a situation where
they are mandatory, irrespective of the law otherwise             they are mandatory, irrespective of the law otherwise
applicable to the contract.                                       applicable to the contract.
If the law of a Member State so stipulates the mandatory          If the law of a Member State so stipulates, the
rules of the law of the Member State of the commitment            mandatory rules of the law of the Member State of the
may be applied if and in so far as, under the law of that         commitment may be applied if and in so far as, under the
Member State, those rules must be applied whatever the            law of that Member State, those rules must be applied
law applicable to the contract.                                   whatever the law applicable to the contract.
6.    Subject to the preceding paragraphs, the Member             5.    Subject to the preceding paragraphs, the Member
States shall apply to the assurance contracts referred to         States shall apply to the assurance contracts referred to
in this Directive their general rules of private inter-           in this Directive their general rules of private inter-
national law concerning contractual obligations.                  national law concerning contractual obligations.
                           Article 5                                                       Article 5
The following paragraph is added to Article 23 of the             Unchanged
First Directive:
    '3.    Each Member State shall take all steps
    necessary to ensure that the authorities responsible
    for supervising assurance undertakings have the
    powers and means necessary for supervision of the
    activities of assurance undertakings established within
    their territory, including activities engaged in outside
    that territory, in accordance with the the Council
    Directives governing those activities and for the
    purpose of ensuring that they are implemented.
    Those powers and means must, in particular, enable
    the supervisory authorities to:
    — make detailed inquiries about the undertaking's
        situation and the whole of its business inter alia
        by:
        — gathering information or requiring the
             submission      of    documents      concerning
             assurance business,
        — carrying out on-the-spot investigations at the
             undertaking's premises,
 ---pagebreak--- N o C 72/12                             Official Journal of the European Communities                22. 3. 90
                       INITIAL PROPOSAL                                            AMENDED PROPOSAL
    — take any measures with regard to the undertaking             Unchanged
        which are appropriate and necessary to ensure
        that the activities of the undertaking remain in
        conformity with the laws, regulations and admin-
        istrative provisions with which the undertaking
        has to comply in each Member State and in
        particular with the scheme of operations in so far
        as it remains mandatory, and to prevent or
        remove any irregularities prejudicial to the
        interests of policy-holders,
    — ensure that measures required by the supervisory
        authorities are carried out, if need be by
        enforcement, where appropriate through judicial
        channels.
    Member States may also make provision for the
    supervisory authorities to obtain any information
    regarding contracts which are held by intermediaries.'
                           Article 6                                                   Article 6
1.    Article 25 of the First Directive is hereby deleted.         Unchanged
2.    Each Member State shall, under the conditions laid
down by national law, authorize undertakings which are
established within its territory to transfer all or part of
their portfolios of contracts for which that State is the
State of the commitment to an accepting office estab-
lished in that same Member State if the supervisory auth-
orities of the Member State in which the head office of
the accepting office is situated certify that the latter
possesses the necessary margin of solvency after taking
the transfer into account.
3.    Each Member State shall, under the conditions laid
down by national law, authorize undertakings estab-
lished within its territory to transfer all or part of their
portfolios of contracts concluded in the circumstances
referred to in Article 10 (1) to an accepting office estab-
lished in the Member State of provision of services if the
supervisory authorities of the Member State in which the
head office of the accepting office is situated certify that
the latter possesses the necessary margin of solvency
after taking the transfer into account.
4.    Each Member State shall, under the conditions laid
down by national law, authorize undertakings estab-
lished within its territory to transfer all or part of their
portfolios of contracts concluded in the circumstances
referred to in Article 10 (1) to an accepting office estab-
lished in the same Member State if the supervisory auth-
orities of the Member State in which the head office of
the accepting office is situated certify that the accepting
 ---pagebreak--- 22. 3. 90                               Official Journal of the European Communities                N o C 72/13
                       INITIAL PROPOSAL                                            AMENDED PROPOSAL
office possesses the necessary margin of solvency after            Unchanged
taking the transfer into account and if it fulfils the
conditions set out in Articles 11, 12, 14 and 16 in the
Member State of provision of services.
5.    In the cases referred to in paragraphs 3 and 4, the
supervisory authorities of the Member State in which the
transferring undertaking is established shall authorize the
transfer after obtaining the agreement of the supervisory
authorities of the Member State of provision of services.
6.    If a Member State, under the conditions laid down
by national law, authorizes undertakings established
within its territory to transfer all or part of their port-
folios of contracts to an accepting office established in
another Member State which is not the Member State of
provision of services, it shall ensure that the following
conditions are fulfilled:
— the supervisory authorities of the Member State in
    which the head office of the accepting office is
    situated certify that the latter possesses the necessary
    margin of solvency after taking the transfer into
    account,
— the Member State in which the accepting office is
    established agrees,
— the accepting office fulfils the conditions set out in
    Articles 11, 12, 14 and 16 in the Member State of
    provision of services, the law of that Member State
    provides for the possibility of such a transfer and that
    Member State agrees to the transfer.
7.    A transfer authorized in accordance with this
Article shall be published, under the conditions laid
down by national law, in the Member State of the
Commitment. Such transfer shall be automatically valid
against policy-holders, assured persons and any other
person having rights or obligations arising out of the
contracts transferred.
This provision shall not affect the right of Member
States to provide that policy-holders may cancel the
contract within a given period after the transfer.
 ---pagebreak--- No C 72/14                              Official Journal of the European Communities                                22. 3. 90
                       INITIAL PROPOSAL                                                  AMENDED PROPOSAL
                           Article 7                                                         Article 7
Article 22 (2) of the First Directive is replaced by the          Article 22 (2) of the First Directive shall be replaced by
following:                                                        the following:
    'The Italian Republic shall take all steps to ensure              'The Italian Republic shall take all steps to ensure
    that the requirement that undertakings established                that the requirement that undertakings established in
    within its territory cede part of their underwriting to           its territory cede part of their underwriting to the
    the Istituto Nazionale di Assicurazioni is abolished              "Istituto Nazionale di Assicurazioni" is abolished no
    within two years of the date of implementation of                 later than . . . '
    this Directive.'
                           Article 8                                                         Article 8
1.    The heading of Title III of the First Directive is          Unchanged
replaced by the following:
    'TITLE III A
    Rules applicable to agencies or branches established
    within the Community and belonging to under-
    takings whose head offices are outside the
    Community'.
2.    The following heading is placed after Article 32 of
the First Directive:
    'TITLE III B
    Rules applicable to subsidiaries of parent under-
    takings governed by the laws of a third country and
    to acquisitions of participations by such parent
    undertakings'.
                           Article 9                                                         Article 9
Title III B shall comprise an Article 3 2A, the text of           The following Articles 32a and 32b shall be added to
which is as follows:                                              Title III B of the First Directive:
    '1.   Requests for authorization of a subsidiary                   Article 32a
    whose parent undertaking is governed by the laws of
    a third country or the acquisition of a participation             The competent authorities of the Member States shall
                                                                      inform the Commission:
    therein as provided for in paragraph 3 shall be
    subject to the procedure laid down in this Article.               (a) of any authorization of a direct or indirect
                                                                           subsidiary one or more parent undertakings of
    2.    The competent authorities of the relevant                        which are governed by the laws of a third
    Member State shall inform the competent authorities                    country. The Commission shall inform the
    of the other Member States and the Commission of                       Insurance Committee referred to in Article 32b
    the request for authorization.                                         (6) accordingly;
 ---pagebreak--- 22. 3. 90                               Official Journal of the European Communities                             No C 72/15
                       INITIAL PROPOSAL                                                 AMENDED PROPOSAL
    3.    Member States shall provide that where an                   (b) whenever such a parent undertaking acquires a
    undertaking governed by the laws of a third country                    holding in a Community insurance undertaking
    is considering the acquisition of a participation in an                which would turn the latter into its subsidiary.
    insurance undertaking established in the Community                     The Commission shall inform the Insurance
    such that the latter undertaking will become its                       Committee referred to in Article 32b (6)
    subsidiary, it shall inform the competent authorities                  accordingly.
    of the Member State concerned. These authorities
    shall inform the competent authorities of the other
    Member States and the Commission.                                When authorization is granted to the direct or
                                                                      indirect subsidiary of one or more parent under-
                                                                      takings governed by the law of third countries, the
    4.    The competent authorities of the Member State               structure of the group shall be specified in the notifi-
    concerned must suspend their decision regarding                   cation which the competent authorities shall address
    requests as referred to in paragraphs 2 and 3 until the           to the Commission.
    procedure provided for in paragraphs 5 and 6 is
    completed.
                                                                     Article 32b
    5.    The Commission shall, within three months of                1.    The      Member    States   shall   inform    the
    receiving the information provided for in paragraphs              Commission of any general difficulties encountered
    2 and 3, examine whether all undertakings of the                 by their insurance undertakings in establishing them-
    Community enjoy reciprocal treatment, in particular               selves or carrying on their activities in a third
    regarding the establishment of subsidiaries or the                country.
    acquisition of participations in insurance under-
    takings in the third country in question.
                                                                      2.    Initially no later than six months before the
                                                                      application of this Directive, and thereafter period-
    6.    If the Commission finds that reciprocity is not             ically, the Commission shall draw up a report
    ensured, it may extend suspension of the decision                 examining the treatment accorded to Community
    referred to in paragraph 4, after having consulted the            insurance undertakings in third countries, in the
    competent authorities of the Member States under                  terms referred to in paragraphs 3 and 4, as regards
    the collaboration procedure provided for in Article               establishment and the carrying on of insurance acti-
    38.                                                              vities, and the acquisition of holdings in third country
                                                                      insurance undertakings. The Commission shall submit
                                                                      those reports to the Council, together with any
    7.    The Commission shall present suitable proposals             appropriate proposals.
    to the Council with a view to achieving reciprocity
    with the third country in question.'
                                                                      3.    Whenever it appears to the Commission, either
                                                                      on the basis of the reports referred to in paragraph 2
                                                                      or on the basis of other information, that a third
                                                                      country is not granting Community insurance under-
                                                                      takings effective market access comparable to that
                                                                      granted by the Community to insurance undertakings
                                                                      from that third country, the Commission may submit
                                                                      proposals to the Council for the appropriate mandate
                                                                      for negotiation with a view to obtaining comparable
                                                                      competitive opportunities for Community insurance
                                                                      undertakings. The Council shall decide by a qualified
                                                                      majority.
                                                                      4.    Whenever it appears to the Commission, either
                                                                      on the basis of the reports referred to in paragraph 2
                                                                      or on the basis of other information, that Community
                                                                      insurance undertakings in a third country are not
 ---pagebreak--- No C 72/16                  Official Journal of the European Communities                                 22. 3. 90
           INITIAL PROPOSAL                                                 AMENDED PROPOSAL
                                                          receiving national treatment offering the same
                                                          competitive opportunities as are available to domestic
                                                          insurance undertakings and that the conditions of
                                                          effective market access are not being fulfilled, the
                                                          Commission may initiate negotiations in order to
                                                          remedy the situation.
                                                          In the circumstances described in the first
                                                         subparagraph above, it may also be decided at any
                                                         time, and in addition to initiating negotiations in
                                                         accordance with the procedure laid down in Article
                                                          32b (6), that the competent authorities of the
                                                         Member States must limit or suspend their decisions:
                                                         — regarding requests pending at the moment of the
                                                              decision or future requests for authorizations, and
                                                         — regarding the acquisition of holdings by direct or
                                                              indirect parent undertakings governed by the laws
                                                              of the third country in question.
                                                         The duration of the measures referred to may not
                                                         exceed six months.
                                                         Before the end of that six months period and in the
                                                         light of the results of the negotiations, the Council
                                                         may, acting on a proposal from the Commission,
                                                         decide by a qualified majority that the measures shall
                                                         be continued.
                                                         Such limitations or suspension may not apply to the
                                                         setting-up of subsidiaries by insurance undertakings
                                                         or their subsidiaries duly authorized in the
                                                         Community, or to the acquisition of holdings in
                                                         Community        insurance    undertakings    by    such
                                                         institutions or subsidiaries.
                                                         5.     Whenever it appears to the Commission that
                                                         one of the situations described in paragraphs 3 and 4
                                                         has arisen, the Member States shall inform it at its
                                                         request:
                                                         (a) of any request for the authorization of a direct
                                                              or indirect subsidiary one or more parent under-
                                                              takings of which are governed by the laws of the
                                                              third country in question;
                                                         (b) of any plans for such an undertaking to acquire a
                                                              holding in a Community insurance undertaking
                                                               such that the latter would become the subsidiary
                                                               of the former.
 ---pagebreak--- 22. 3. 90                  Official Journal of the European Communities                             No C 72/17
          INITIAL PROPOSAL                                                 AMENDED PROPOSAL
                                                         This obligation to provide information shall lapse
                                                         once an agreement is concluded with the third
                                                         country referred to in paragraph 3 or 4 when the
                                                         measures referred to in the second and third subpara-
                                                         graphs of paragraph 4 cease to apply.
                                                         6.    The Commission shall be assisted by a
                                                         Committee composed of representatives of the
                                                         Member States and chaired by the Commission
                                                         representative.
                                                        The Commission representative shall submit to the
                                                         Committee a draft of the measures to be taken. The
                                                         Committee shall express its opinion on the draft
                                                        within a time limit which the chairman may lay down
                                                         according to the urgency of the matter. The opinion
                                                         shall be expressed by the majority laid down in
                                                        Article 148 (2) of the Treaty for adoption of
                                                         decisions which the Council is required to take on a
                                                        proposal from the Commission. When a vote is taken
                                                         in the Committee, the votes of the representatives of
                                                         the Member States shall be weighted as laid down in
                                                         the said Article. The chairman shall not vote.
                                                        The Committee shall adopt the proposed measures if
                                                         they are consistent with the Committee's opinion.
                                                        Where the proposed measures are not consistent with
                                                         the Committee's opinion or if no opinion is issued,
                                                         the Commission shall submit to the Council without
                                                         delay a proposal concerning the measures to be
                                                         taken. The Council shall act by a qualified majority.
                                                         If, on the expiry of a period to be laid down in each
                                                         act to be adopted by the Council under this
                                                        paragraph but which may in no case exceed three
                                                         months from the date of referral to the Council, the
                                                         Council has not acted, the proposed measures shall
                                                         be adopted by the Commission.
                                                         7.    Measures taken under this Article shall comply
                                                         with the Community's obligations under any interna-
                                                         tional agreements, bilateral or multilateral, governing
                                                         the taking-up and pursuit of the business of insurance
                                                         undertakings.
 ---pagebreak--- No C 72/18                              Official Journal of the European Communities                                 22. 3. 90
                      ORIGINAL PROPOSAL                                                AMENDED PROPOSAL
                           TITLE III                              Unchanged
Provisions relating specifically to freedom to provide
                            services
                           Article 10                                                      Article 10
1.     This Title shall apply where an undertaking,                1.   Unchanged
through an establishment situated in a Member State,
covers a commitment in another Member State.
2.     This Title shall not apply to operations, under-            2.   This Title shall apply to:
takings and institutions to which the First Directive does
not apply.                                                        — the types of insurance referred to in Article 1 (1) of
                                                                      the First Directive,
                                                                  — the operations referred to in Article 1 (2) (a) and (b)
                                                                      of the First Directive.
3.     This Title shall likewise not apply to commitments;         3.   This Title shall not apply to the operations and
                                                                  bodies referred to in Article 1 (2) (c), (d) and (e), Article
— entered into with persons other than natural persons             1 (3) and Articles 2, 3 and 4 of the First Directive.
     acting on their own account,
     entered into with persons having a commercial,
     business or employment-based relationship with the
     person or persons in respect of whose life or lives the
     assurance is taken out, whether such relationship be
     past, present or future, where the commitment is
     entered into by virtue of such relationship,
     entered into with a person in respect of whose life
     the assurance is taken out, if it is taken out by virtue
     of the employment or business activities of that
     person,
     relationg to the operations referred to in Article 1 (2)
     (a), (c), (d), and (e) and Article 1 (3) of the First
     Directive.
4.     An undertaking shall not cover a commitment in              4.   Unchanged
another Member State unless it is authorized under
Article 6 of the First Directive to cover such a
commitment in its Member State of establishment.
                           Article 11                                                       Article 11
Any undertaking which intends to provide services shall            Unchanged
first inform the competent authorities of the head office
Member State, and, where appropriate, of the Member
State of the establishment concerned, indicating the
Member State or Member States within whose territory
it intends to provide services and the nature of the
commitments it proposes to cover.
 ---pagebreak--- 22. 3. 90                                Official Journal of the European Communities                              No C 72/19
                      ORIGINAL PROPOSAL                                                 AMENDED PROPOSAL
                          Article 12                                                         Article 12
 1.    Each Member State within whose territory an                  1.    Subject to Article 13, each Member State within
undertaking intends, under conditions of freedom to                whose territory an undertaking intends, by way of
provide services, to cover commitments within the                  freedom to provide services, to cover commitments
meaning of Article 10 of this Directive may make the               within the meaning of Article 10 of this Directive may
taking-up of such activity conditional on official auth-           make the taking-up of such activity conditional on
orization in so far as the commitments are not                     official authorization in so far as the commitments are
commitments within the meaning of Article 13; to that              not entered into in accordance with the arrangements
end, it may require that the undertaking:                          referred to in Article 13; to that end, it may require that
                                                                   the undertaking:
(a) produce a certificate issued by competent authorities          Unchanged
     of the head office Member State certifying that it
     possesses for its activities as a whole the minimum
     solvency margin calculated in accordance with
     Article 19 of the First Directive and that, in
     accordance with Article 6 (1) of the said Directive,
     the autorization enables the undertaking to operate
     outside the Member State of establishment;
(b) produce a certificate issued by the competent auth-
     orities of the Member State of establishment indi-
     cating the classes in respect of which the undertaking
     is authorized to transact business and certifying that
     those authorities do not object to the undertaking's
     transacting business by way of freedom to provide
     services;
(c) submit a scheme of           operations   containing   the
     following particulars:
     — the nature of the commitments which the under-
         taking proposes to cover in the Member State of
         provision of services,
     — the general and special conditions of the
         assurance policies which it proposes to use there,
     — the premium rates which the undertaking
         envisages applying and the technical bases which
         it proposes to use for each class of business,
         the forms and other printed documents which it            — the forms and other printed documents which it
         intends to use in its dealings with policy-holders,           intends to use in its dealings with policy-holders, in
                                                                       so far as these are also required of established under-
                                                                       takings.
     in so far as these are also required of established
     undertakings.
2.     The competent authorities of the Member State of            Unchanged
provision of services may require that the particulars
referred to in paragraph 1 (c) be supplied to them in the
official language of that State.
 ---pagebreak--- N o C 72/20                            Official Journal of the European Communities                                 22. 3. 90
                      ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
3.     The competent authorities of the Member State of          Unchanged
provision of services shall have a period of six months
from receipt of the documents referred to in paragraph 1
in which to grant or refuse authorization on the basis of
the compliance or non-compliance of the particulars in
the scheme of operations submitted by the undertaking
with the laws, regulations and administrative provisions
applicable in that State.
                                                                 Such authorization may not be refused on the grounds
                                                                 that some operations in the scheme of operation, which
                                                                 are subject in the Member State of establishment of the
                                                                 undertaking to supervision by the authorities responsible
                                                                 for the supervision of insurance undertakings, are not
                                                                 subject to such supervision in the Member State of
                                                                 provision of services.
4.     If the competent authorities of the Member State of       Unchanged
provision of services have not taken a decision by the
end of the period referred to in paragraph 3, auth-
orization shall be deemed to be refused.
5.     Any decision to refuse authorization or to refuse a
certificate as referred to in paragraph 1 (a) or (b) shall
be accompanied by the precise grounds therefore and
communicated to the undertaking in question.
6.     Each Member State shall make provision for the
right to apply to the courts in respect of a refusal of
authorization or refusal to issue the certificate referred
to in paragraph 1 (a) or (b).
                          Article 13                                                       Article 13
1.     Commitments covered by way of freedom to                   1.    Commitments covered by way of freedom to
provide services shall be subject, not to Article 12, but to     provide services shall be subject to Article 14 where the
Article 14 where the policy-holder takes the initiative in       policy-holder takes the initiative in seeking a
seeking a commitment from the undertaking.                       commitment from the undertaking.
The policy-holder shall be deemed to have taken the              The policy-holder shall be deemed to have taken the
initiative:                                                      initiative:
— where the initial contact between the policy-holder            — where, on the one hand, the contract is entered into
    and the undertaking, regardless of the means used, is            by both parties in the Member State in which the
    made by the policy-holder,                                        undertaking is established or by each of the parties in
                                                                      that party's own State of establishment or of habitual
                                                                      residence, and where, on the other hand, the policy-
                                                                      holder has not been contacted in his State of habitual
    where the contract is concluded in the Member State               residence by the undertaking or through an insurance
     in which the undertaking is established without there            intermediary or any person authorized to act for it or
    having been any prior contact between the policy-                 by means of any solicitation of business addressed to
    holder and the undertaking in the Member State in                 him personally,
    which the policy-holder has his habitual residence.
 ---pagebreak---  22. 3. 90                              Official Journal of the European Communities                              No C 72/21
                       ORIGINAL PROPOSAL                                                AMENDED PROPOSAL
                                                                       where the policy-holder approaches an intermediary
                                                                       established in the Member State in which the policy-
                                                                       holder has his habitual residence and carrying on the
                                                                       professional activities defined in Article 2 (1) (a) of
                                                                       Directive 77/92/EEC in order to obtain information
                                                                       on assurance contracts offered by undertakings estab-
                                                                       lished in Member States other than his State of
                                                                       habitual residence or with a view to entering into a
                                                                       commitment through the intermediary with such an
                                                                       undertaking. In that event the policy-holder shall sign
                                                                       a statement, the text of which is set out under item A
                                                                       in the Annex, expressly so requesting.
 2.    An undertaking which proposes to cover                      2.    Before entering into a commitment in the cases
 commitments in a Member State under the arrangements              referred to in the first and second indents of paragraph
 provided for in this Article shall not solicit business or        1, the policy-holder shall sign a statement, the text of
 engage in any advertising there relating to such activity        which is under item B in the Annex, to the effect that he
 apart from publishing notices indicating its address and          notes that the commitment is subject to the rules of
 the classes in respect of which it is authorized to transact     supervision of the country of the undertaking which is to
 business in the Member State of establishment from               cover the commitment.
which it proposes to cover commitments.
 3.    Where the policy-holder takes the initiative in            3.     Deleted
 seeking the commitment from the undertaking through a
broker, he shall sign, before the contact with the under-
taking takes place, a statement to the effect that he
wishes the broker to make enquiries as to the assurance
 arrangements available in one or more Member States
other than in which he has his habitual residence; such
broker shall be the person referred to in Article 2 (1) (a)
of Directive 77/92/EEC. The broker shall not engage in
any advertising concerning the possibility of seeking
commitments under the arrangements provided for in
this Article.
4.     Before entering into a commitment under the                       Deleted
arrangements provided for in this Article, the policy-
holder shall sign a statement to the effect that he takes
note of the fact that the commitment is subject to the
rules of supervision of the country of the undertaking
which is to cover the commitment.
                          Article 14                                                        Article 14
1.    Each Member State within whose territory an                 1.     Each Member State within whose territory an
undertaking intends, under conditions of freedom to               undertaking intends, by way of freedom to provide
provide services, to cover commitments within the                 services, to cover commitments in accordance with
meaning of Article 13 of this Directive shall require that        Article 13 of this Directive shall require that the under
the undertaking:                                                  taking abide by the following procedure:
 ---pagebreak--- No C 72/22                             Official Journal of the European Communities                                     22. 3. 90
                      ORIGINAL PROPOSAL                                                 AMENDED PROPOSAL
(a) produce a certificate issued by the competent auth-           (a) production of a certificate issued by the competent
     orities of the head office Member State certifying               authorities of the head office Member State
     that it possesses for its activities as a whole the              certifying that it possesses for its activities as a whole
     minimum solvency margin calculated in accordance                 the minimum solvency margin calculated in
     with Article 19 of the First Directive and that, in              acordance with Article 19 of the First Directive and
     accordance with Article 6 (1) of the said Directive,             that, in accordance with Article 6 (1) of the said
     the authorization enables the undertaking to operate             Directive, the authorization enables the undertaking
     outside the Member State of establishment;                       to operate outside the Member State of estab-
                                                                      lishment;
(b) produce a certificate issued by the competent auth-          (b) production of a certificate issued by the competent
     orities of the Member State of establishment indi-               authorities of the Member State of establishment
     cating the classes in respect of which the undertaking           indicating the classes in respect of which the under-
     is authorized to transact business and certifying that           taking is authorized to transact business and
     those authorities do not object to the undertaking's             certifying that those authorities do not object to the
     transacting business by way of freedom to provide                undertaking's transacting business by way of
     services;                                                        freedom to provide services;
(c) state the nature of the commitments which it                 (c) statement of the nature of the commitments which it
     proposes to cover in the Member State of provision               proposes to cover in the Member State of provision
     of services.                                                     of services.
                                                                 The above procedure shall not apply where an activity
                                                                 falling under this Directive is not subject, in the Member
                                                                 State of the commitment, to supervision by the adminis-
                                                                 trative authorities responsible for supervising private
                                                                 insurance.
2.     Each Member State shall make provision of a right         2.     Unchanged
to apply to the courts in respect of a refusal to issue the
certificate referred to in paragraph 1 (a) or (b).
3.     The undertaking may commence activities as from           3.     Unchanged
the certified date on which the authorities of the
Member State of provision of services are in possession
of the documents referred to in paragraph 1.
4.     This Article shall also apply where the Member            4.    This Article shall also apply where the Member
State in whose territory an undertaking intends, by way          State in whose territory an undertaking intends, by way
of freedom to provide services, to cover commitments             of freedom to provide services, to cover commitments in
other than those referred to in Article 13 of this               accordance with arrangements other than those referred
Directive does not make the taking-up of such activity           to in Article 13 of this Directive does not make the
conditional on official authorization.                           taking-up of such activity conditional on official auth-
                                                                 orization.
                                                                 5.     Member States may not prevent the policy-holder
                                                                 from entering into any commitment which may be
                                                                 lawfully undertaken in the Member State of estab-
                                                                 lishment unless it is contrary to public policy in the
                                                                 Member State of the commitment.
                          Article 15                                                       Article 15
A policy-holder who concludes an individual life                 1.     Each Member State shall prescribe that a policy-
assurance contract under conditions of freedom to                holder who concludes an individual life assurance
provide services as set out in Article 13 shall have a           contract in one of the cases referred to in Title III shall
period of at least 30 days from the time when the parties        have a period of between 14 and 30 days from the time
entered into the contract within which to cancel the             when he was informed that the contract had been
contract.                                                        concluded within which to cancel the contract.
 ---pagebreak---  22. 3. 90                               Official Journal of the European Communities                             No C 72/23
                      ORIGINAL PROPOSAL                                                  AMENDED PROPOSAL
 The giving of notice of cancellation by the policy-holder          The giving of notice of cancellation by the policy-holder
 shall have the effect of releasing him from any obligation         shall have the effect of releasing him from any future
 arising from the contract.                                         obligation arising from the contract.
 These provisions shall not apply to contracts of two               The other legal effects and the conditions of cancellation
 months' duration or less.                                          shall be determined by the law applicable to the contract
                                                                    as defined in Article 4, notably as regards the
 The legal effects of cancellation shall be determined by           arrangements for informing the policy-holder that the
 the law applicable to the contract as defined in Article 4,        contract has been concluded.
 notably as regards establishing the time when the parties
 entered into the contract.
                                                                    2.    The Member States need not apply paragraph 1 to
                                                                    contracts of six months' duration or more.
                          Article 16                                                        Article 16
 Member States' legislation shall provide that an under-           Unchanged
taking established in a Member State may cover within
that State by way of freedom to provide services from an
establishment in another Member State at least:
— commitments within the meaning of Article 13 of this                 the commitments within the meaning of Article 10 of
     Directive,                                                        this Directive, where they are entered into in
                                                                        accordance with the arrangements in Article 13,
     commitments within the      meaning of Article 10 but             the commitments within the meaning of Article 10
     not of Article 13 coming    within classes in respect of          entered into in accordance with arrangements other
     which the undertaking        established in the first             than those laid down in Article 13, where they fall
     Member State lacks           authorization there in               within classes in respect of which the undertaking
     accordance with Article 6   of the First Directive.               established in the first Member State lacks auth-
                                                                       orization there in accordance with Article 6 of the
                                                                       First Directive.
If, however, in the latter case that undertaking has such          Unchanged
authorization, the first Member State may prevent such
provision of services.
                          Article 17                                                        Article 17
1.    Where an undertaking referred to in Article 11               1.      Where an undertaking referred to in Article 11
intends to amend the information referred to in Article            intends to amend the information referred to in Article
12 (1) or 14 (1) (c), it shall submit the amendments to            12 (1) (c), it shall submit the amendments to the
the competent authorities of the Member State of                   competent authorities of the Member State of provision
provision of services. Those amendments shall be subject           of services. Those amendments shall be subject to the
to the provisions of Articles 12 (3) and 14 (1), as the case       provisions of Articles 12 (3) and 14 (3), as the case may
may be.                                                            be.
 ---pagebreak--- No C 72/24                            Official Journal of the European Communities                                 22. 3. 90
                     ORIGINAL PROPOSAL                                                AMENDED PROPOSAL
2. Where the undertaking intends to extend its ac-              2. Where the undertaking intends to extend its ac-
tivities to commitments within the meaning of Article 10        tivities to commitments within the meaning of Article 10
but not of Article 13 of this Directive, it shall follow the    in accordance with arrangements other than those laid
procedure laid down in Articles 11 and 12.                      down in Article 13 or Article 14 (4) of this Directive, it
                                                                shall follow the procedure laid down in Articles 11 and
                                                                 12.
3. Where the undertaking intends to extend its ac-               3. Where the undertaking intends to extend its ac-
tivities to commitments within the meaning of Article 13        tivities to commitments in accordance with the
or Article 14 (4) of this Directive, it shall follow the        arrangements laid down in Article 13 or Article 14 (4) of
procedure laid down in Articles 11 and 14.                      this Directive, it shall follow the procedure laid down in
                                                                Articles 11 and 14.
                         Article 18                                                        Article 18
Undertakings which, by virtue of Article 13 (3) of the           1. Undertakings which, by virtue of Article 13 (3) of
First Directive, carry on simultaneously the activities         the First Directive, carry on simultaneously the activities
referred to in the Annex to the First Coordination              referred to in the Annex to Directive 73/239/EEC and
Directive (non-life insurance) and those listed in Article      those listed in Article 1 of the First Directive may accept
 1 of the First Directive shall not, by way of freedom to       commitments in any of the classes referred to in the First
provide services, cover any commitments in any of the           Directive by way of provision of services as referred to in
classes referred to in the First Directive.                     Article 13 of this Directive. They may also accept
                                                                 commitments by way or provision of services as referred
                                                                to in Article 12 if the law of the Member State of
                                                                provision of services so allows at the time of notification
                                                                 of this Directive, or thereafter and until 3 December
                                                                 1995 in the other Member States.
                                                                 2. This Article will be reviewed in the light of the
                                                                 report to be prepared by the Commission in accordance
                                                                with Article 39 (2) of the First Directive.
                         Article 19                                                        Article 19
 1. Member States of provision of services may                   1.    Unchanged
maintain or introduce laws, regulations or administrative
provisions justified on policy-holder protection grounds,
 concerning, in particular, approval of general and special
 policy conditions, of forms and other printed documents
 for use in dealings with policy-holders, of scales of
premiums and of any other document necessary for the
normal exercise of supervision on condition that the
rules of the Member State of establishment are insuf-
ficient to achieve the necessary level of protection and
the requirements of the Member State of provision of
services do not go beyond what is necessary in that
respect.
 2. However, with regard to commitments within the               2. However, with regard to commitments entered into
 meaning of Article 11 of this Directive, Member States          in accordance with the arrangements described in Article
 of provision of services shall not lay down provisions          13 of this Directive, Member States of provision of
requiring approval or notification of general and special        services shall not lay down provisions requiring approval
policy conditions, scales of premiums, forms and other           or notification of general and special policy conditions,
printed documents which the undertaking intends to use           scales of premiums, forms and other printed documents
 in its dealings with policy-holders.                            which the undertaking intends to use in its dealings with
                                                                 policy-holders.
 ---pagebreak---   22. 3. 90                              Official Journal of the European Communities                           No C 72/25
                        ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
                                                                   3.    They may require only non-systematic notification
                                                                   of these conditions and other documents, for the purpose
                                                                   of verifying compliance with laws, regulations and
                                                                   administrative    provisions     in  respect   of   such
                                                                   commitments, although this requirement may not
                                                                   constitute a prior condition in order for an undertaking
                                                                   to carry on its activities.
                            Article 20                                                      Article 20
  1.    Any undertaking providing services shall submit to         Unchanged
 the competent authorities of the Member State of
 provision of services all documents requested of it for the
 purposes of implementing this Article, in so far as under-
 takings established there are also obliged to do so.
 2.    If the competent authorities of a Member State
 establish that an undertaking providing services within its
 territory does not comply with the legal provisions
 applicable to it in that State, such authorities shall
 request the undertaking concerned to put an end to the
 irregular situation.
 3.    If the undertaking in question fails to comply with
the request referred to in paragraph 2, the competent
authorities of the Member State of provision of services
shall inform the competent authorities of the Member
State of establishment accordingly. The latter authorities
shall take all appropriate steps to ensure that the under-
taking concerned puts an end to the irregular situation.
The nature of those measures shall be communicated to
the authorities of the Member State of provision of
services.
The competent authorities of the Member State of
provision of services may also apply to the competent
authorities responsible for the head office of the
assurance undertaking if the services are being provided
by agencies or branches.
4.     If, despite the steps thus taken by the Member State
of establishment, or because such steps prove inadequate
or are lacking in the Member State in question, the
undertaking persists in violating the legal provisions in
force in the Member State of provision of services, the
latter Member State may, after informing the supervisory
authorities of the Member State of establishment, take
appropriate steps to prevent further irregularities,
including, in so far as it is strictly necessary, the
 ---pagebreak--- N o C 72/26                           Official Journal of the European Communities                                    22. 3. 90
                      ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
prevention of the further covering of commitments by            prevention of the further covering of commitments by
the undertaking by way of freedom to provide services           the undertaking by way of freedom to provide services
within its territory. In the case of commitments covered        within its territory. In the case of commitments covered
by way of freedom to provide services other than those          by way of freedom to provide services in accordance
within the meaning of Article 13 of this Directive, such        with arrangements other than those referred to in Article
steps shall include withdrawal of the authorization              13 of this Directive, such steps shall include withdrawal
referred to in Article 12. Member States shall ensure that      of the authorization referred to in Article 12. Member
within their territory it is possible to effect the notifi-      States shall ensure that within their territory it is possible
cations necessary for such steps.                               to effect the notifications necessary for such steps.
5.    The foregoing provisions shall not affect the right       Unchanged
of Member States to punish irregularities committed
within their territory.
6.    If the undertaking which has committed the irregu-
larity has an establishment or owns property in the
Member State of provision of services, the supervisory
authorities of the latter may, in accordance with national
law, apply the administrative penalties prescribed for
such irregularity by way of enforcement against such
establishment or property.
7.       Any step taken under paragraphs 2 to 6 involving
penalties or restrictions on the provision of services must
be properly justified and communicated to the under-
taking concerned. Even such measure shall be subject to
the right to apply to the courts in the Member State in
which the authorities adopted it.
8.    Where steps are taken under Article 24 of the First
Directive, the competent authorities of the Member State
of provision of services shall be informed accordingly by
the authority which takes them and, where the steps are
taken under paragraphs 1 and 3 of the said Article, take
whatever action is necessary to safeguard the interests of
assured persons.
In the event of withdrawal of authorization under Article
26 of the First Directive, the competent authorities of the
Member State of provision of services shall be informed
accordingly and shall take appropriate steps to prevent
the establishment concerned from continuing to conclude
assurance contracts by way of freedom to provide
services within the territory of that Member State.
9.    Every two years the Commission shall submit to the
Council a report summarizing the number and type of
cases in which, in each Member State, decisions refusing
authorization have been communicated under Article 12
or measures have been taken under paragraph 4.
Member States shall cooperate with the Commission by
providing it with the information required for the report.
 ---pagebreak--- 22. 3. 90                            Official Journal of the European Communities                            No C 72/27
                    ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
                        Article 21                                                      Article 21
In the event of an assurance undertaking being wound           Unchanged
up, commitments arising from contracts underwritten by
way of freedom to provide services shall be met in the
same way as those arising from that undertaking's other
assurance contracts, no distinction being made on
grounds of the nationality of assured persons or benefi-
ciaries.
                        Article 22                                                     Article 22
1.    Where an operation is offered by way of freedom          Unchanged
to provide services, the policy-holder shall, before any
commitment is entered into, be informed of the Member
State in which the head office, agency or branch with
which the contract is to be concluded is established.
Any document issued to the policy-holder shall contain         Any document issued to the policy-holder or to the
the information      referred to in the preceding              insured shall contain the information referred to in the
subparagraph.                                                  preceding subparagraph.
2.    The contract or other document granting cover,           Unchanged
together with the assurance proposal where it is binding
upon the proposer, shall specify the address of the estab-
lishment which grants the cover and that of the head
office.
                                                                                       Article 22a
                                                               Every establishment must inform its supervisory authority
                                                               in respect of operations effected by way of provision of
                                                               services of the amount of the premiums, without
                                                               deduction of reinsurance, receivable by Member State
                                                               and by each of classes I to VI, as defined in the Annex
                                                               to the First Directive.
                                                               This information shall be provided separately for
                                                               commitments      covered     in accordance with        the
                                                               arrangements in Article 12 of this Directive and for those
                                                               covered in accordance with the arrangements in Article
                                                                14.
                                                               The supervisory authority of each Member State shall
                                                               forward this information to the supervisory authorities of
                                                               each of the Member States of provision of services which
                                                               so requests.
 ---pagebreak--- No C 72/28                            Official Journal of the European Communities                                22. 3. 90
                     ORIGINAL PROPOSAL                                              AMENDED PROPOSAL
                         Article 23                                                     Article 23
 1.   Where the provision of services is conditional upon       Unchanged
authorization by the Member State of provision of
services, the amount of the technical reserves, including
mathematical reserves and the rules on profit sharing and
on the surrender and paid-up values for the contracts
concerned shall be determined under the supervision of
that Member State in accordance with the rules it has
laid down or, failing such rules, in accordance with
established practice in that Member State. The covering
of those reserves by equivalent and matching assets, the
location of those assets and the application of the rules
on profit sharing and on surrender and paid-up values
shall be under the supervision of that Member State in
accordance with its rules or practice.
2.    In all other cases, those various operations shall be
under the supervision of the Member State of estab-
lishment, in accordance with its rules or practice.
3.    The Member State of establishment shall ensure
that the reserves relating to all the contracts which the
undertaking concludes through the establishment
concerned are sufficient and covered by equivalent and
matching assets.
4.    In the circumstances referred to in paragraph 1, the
Member State of establishment and the Member State of
provision of services shall exchange any information
necessary for carrying out their respective duties under
paragraphs 1 and 3.
                         Article 24                                                     Article 24
Every assurance contract concluded by way of freedom            Without prejudice to any subsequent harmonization,
to provide services shall be subject only to the indirect       every assurance contract concluded by way of freedom
taxes and parafiscal charges on assurance premiums of           to provide services shall be subject only to the indirect
the Member State of commitment within the meaning of            taxes and parafiscal charges on assurance premiums of
Article 2 (c).                                                  the Member State of the commitment within the
                                                                meaning of Article 2 (e), and, in the case of Spain, to the
                                                                surcharges legally fixed to assist the Spanish body
                                                                'Consorcio de compensacion de Seguros' in its function
                                                                of compensating for losses resulting from the occurrence
                                                                of exceptional events in that Member State.
The law applicable to the contract pursuant to Article 4        Unchanged
shall not affect the tax arrangements applicable.
 ---pagebreak--- 22. 3. 90                           Official Journal of the European Communities                              N o C 72/29
                    ORIGINAL PROPOSAL                                              AMENDED PROPOSAL
Each Member State shall, subject to subsequent harmon-        Subject to future harmonization each Member State shall
ization, apply to undertakings which provide services in      apply to undertakings which provide services in its
its territory its own national provisions concerning          territory its own national provisions concerning measures
measures to ensure the collection of indirect taxes and       to ensure the collection of indirect taxes and parafiscal
parafiscal charges due under the first subparagraph.          charges due under the first paragraph.
                                                                                        TITLE IV
                                                                                  Transitional provisions
                                                                                       Article 24a
                                                              The following transitional arrangements shall apply for
                                                              the benefit of Greece, Spain and Portugal:
                                                                (i) Greece: until 31 December 1998:
                                                                    — Greece may limit the commitments for which it
                                                                       is the Member State of provision of services to
                                                                       those entered into in accordance with the
                                                                       arrangements referred to in Article 13,
                                                                    — however, Greece may require that the technical
                                                                       reserves, including mathematical           reserves,
                                                                       relating to those commitments, should be
                                                                       calculated, covered and located in accordance
                                                                       with the legislation in force in Greece.
                                                               (ii) Spain: until 31 December 1995:
                                                                    — Spain may limit the commitments for which it is
                                                                       the Member State of provision of services to
                                                                       those entered into in accordance with the
                                                                       arrangements referred to in Article 13,
                                                                    — however, Spain may require that the technical
                                                                       reserves, including mathematical           reserves,
                                                                       relating to those commitments, should be
                                                                       calculated, covered and located in accordance
                                                                       with the legislation in force in Spain.
                                                              (iii) Portugal: until 31 December 1998:
                                                                    — Portugal may limit the commitments for which
                                                                       it is the Member State of provision of services to
                                                                       those entered into in accordance with the
                                                                       arrangements referred to in Article 13,
 ---pagebreak--- No C 72/30                              Official Journal of the European Communities                               22. 3. 90
                      ORIGINAL PROPOSAL                                                 AMENDED PROPOSAL
                                                                            however, Portugal may require that the
                                                                            technical reserves, including      mathematical
                                                                            reserves, relating to those commitments, should
                                                                            be calculated, covered and located            in
                                                                            accordance with the legislation in force in
                                                                            Portugal.
                                                                                            Article 24b
                                                                   1.    In the case of group assurance contracts entered
                                                                  into by virtue of the insured person's contract of
                                                                  employment or professional activity, the Member States
                                                                  may, until 31 December 1994 limit the commitments for
                                                                  which they are the Member State of provision of services
                                                                  to those entered into in accordance with the
                                                                  arrangements referred to in Article 12.
                                                                  2.     Member States may, up to three years at the latest
                                                                  after the date of application laid down in Article 27 (2),
                                                                  consider that the policy-holder shall be deemed to have
                                                                  taken the initiative only in the case provided for in the
                                                                  first indent of Article 13 (1).
                          TITLE IV                                                           TITLE V
                       Final provisions                                                  Final provisions
                          Article 25                                                         Article 25
The Commission and the competent authorities of the               Unchanged
Member States shall collaborate closely with a view to
facilitating the supervision of the kinds of insurance and
the operations referred to in the First Directive within
the Community.
Each Member State shall inform the Commission of any
major difficulties to which application of this Directive
gives rise inter alia to a Member State becoming aware
of an abnormal transfer of business referred to in the
First Directive to the detriment of undertakings estab-
lished in its territory and to the advantage of agencies
and branches located just beyond its borders.
The Commission and the competent authorities of the
Member States concerned shall examine such difficulties
as quickly as possible in order to find an appropriate
solution.
Where necessary, the Commission shall submit appro-
priate proposals to the Council.
 ---pagebreak--- 22. 3. 90                                Official Journal of the European Communities                                   No C 72/31
                      ORIGINAL PROPOSAL                                                      AMENDED PROPOSAL
                          Article 26                                                            Article 26
The Commission shall forward to the Council and the                    Unchanged
European Parliament regular reports, the first on . . . , on
the development of the market in assurance and oper-
ations transacted under conditions of freedom to provide
services.
                          Article 27                                                            Article 27
Member States shall amend their national provisions to                 Member States shall amend their national provisions to
comply with this Directive within 18 months of the date                comply with this Directive within 24 months of the date
of its notification and shall forthwith inform the                     of its notification and shall forthwith inform the
Commission thereof.                                                    Commission thereof.
The provisions amended in accordance with this Article                 The provisions amended in accordance with the first
shall be applied within 24 months of the date of notifi-               paragraph shall be applied within 30 months of the date
cation of this Directive.                                              of notification of this Directive.
                          Article 28                                                            Article 28
Upon notification of this Directive, Member States shall               Unchanged
ensure that the texts of the main laws, regulations or
administrative provisions which they adopt in the field
covered by this Directive are communicated to the
Commission.
                          Article 29                                                            Article 29
This Directive is addressed to the Member States.                      Unchanged
                                                                 ANNEX
             A. Statement to be signed by the policy-holder under Article 13 (1), second indent
                'I hereby state that I wish (name of intermediary) to provide me with information on assurance
                contracts offered by undertakings established in Member States other than (Member State of habitual
                residence of policy-holder). I understand that such undertakings are subject to the supervisory
                arrangements of the State in which they are established and not to the supervisory arrangements of
                (Member State of habitual residence of policy-holder).'
             B. Statement to be signed by the policy-holder under Article 13 (2)
                'I hereby take note that (name of assurer) is established in (Member State of establishment of assurer)
                and I realize that supervision of that assurer is the responsibility of the supervisory authorities in
                 (Member State of establishment of assurer) and not the responsibility of the authorities in (Member
                 State of habitual residence of policy-holder).'