CELEX: 51989PC0436(01)
Language: en
Date: 1989-12-06
Title: PROPOSAL FOR A COUNCIL DECISION ON THE CONCLUSION OF THE AGREEMENT BETWEEN THE SWISS CONFEDERATION AND THE EUROPEAN ECONOMIC COMMUNITY CONCERNING DIRECT INSURANCE OTHER THAN LIFE ASSURANCE

5. 3. 90                            Official Journal of the European Communities                                     No C 53/1
                                                            II
                                                    (Preparatory Acts)
                                                COMMISSION
                  Proposal for a Council Decision on the conclusion of the Agreement between
          the Swiss Confederation and the European Economic Community concerning direct insurance
                                                 other than life assurance
                                             COM(89) 436 final — SYN 220
                                (Submitted by the Commission on 7 September 1989)
                                                       (90/C 53/01)
         THE COUNCIL OF THE EUROPEAN COMMUNITIES,
         Having regard to the Treaty establishing the European Economic Community, and in particular
         Articles 57 and 235 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 desirable to conclude the Agreement with Switzerland concerning direct insurance
         other than life assurance, signed at ... on ...,
         HAS DECIDED AS FOLLOWS:
                                                         Article 1
         The Agreement between the Swiss Confederation and the European Economic Community
         concerning direct insurance other than life assurance is hereby approved on behalf of the
         Community.
         The text of the Agreement is annexed to this Decision.
                                                         Article 2
         The President of the Council shall take the measures necessary for the exchange of instruments
         provided for in Article 44 of the Agreement. (l)
         (') The date of entry into force of the Agreement will be published in the Official Journal of the European
             Communities by the General Secretariat of the Council.
 ---pagebreak--- No C 5 3 / 2                                Official Journal of the European Communities                                          5. 3. 90
                                                               AGREEMENT
                           Between the Swiss Confederation and the European Economic Community
                                             on direct insurance other than life assurance
                                                     (Text initialled on 26 July 1989)
                                                                  PREAMBLE
               THE SWISS CONFEDERATION, of the one part, and
               THE EUROPEAN ECONOMIC COMMUNITY, of the other part,
               CONSIDERING the close relations which exist between Switzerland and the Community;
               DESIRING to avail themselves of the occasion offered by the establishment of a unified Community insurance
               market to consolidate existing economic relations between the two Parties in this field, and to promote, under
               fair conditions of competition, the harmonious development of these relations by ensuring protection for
               insured persons;
               RESOLVED to that end to remove obstacles to the taking-up and pursuit of the business of direct insurance
               other than life assurance on a reciprocal and non-discriminatory basis safeguarded by the necessary legal
               conditions in respect of supervision, and thus to introduce between themselves freedom of establishment in this
               field;
               EMPHASIZING that this in no way affects their power to legislate subject to limits set by public international
               law;
               ENDEAVOURING to do everything in their power to see that their domestic legislation in this field evolves in a
               mutually compatible manner;
               OBSERVING that it is in the interest of their economies to develop and strengthen their relations in this way in a
               field which up to now has not been governed by contractual rules, and to contribute thus to the coordination of
               economic law between the two Parties;
               DECLARE themselves ready to consider in the light of any relevant factor, and particularly of the evolution of
               Community insurance law, the possibility of concluding other agreements in respect of private insurance;
               HAVE AGREED in pursuit of these aims to conclude the present Agreement and to this end have designated as
               their Plenipotentiaries:
               THE SWISS CONFEDERATION
               THE EUROPEAN ECONOMIC COMMUNITY
               W H O , having exchanged their Full Powers, found in good and due form, have agreed as follows:
                           SECTION 1                                                                   Article  2
                       BASIC PROVISIONS
                                                                                                Scope of Agreement
                             Article 1
                                                                           The classes of insurance which are subject              to  this
                              Object                                       Agreement are set out in Annex I hereto.
The object of this Agreement is to lay down, on a reciprocal                                                  .
basis, the conditions which are necessary and sufficient to
enable agencies and branches of undertakings whose head
office is situated in the territory of one of the Contracting                                         Exceptions
Parties and which wish to become established in the
territory of the other Contracting Party, or are established                The kinds of insurance, operations and undertakings which
there, to take up or pursue the self-employed activity of                   are not subject to this Agreement are listed in Annex II
direct insurance other than life assurance.                                 hereto.
 ---pagebreak--- 5. 3. 90                                Official Journal of the European Communities                                  No C 53/3
                           Article 4                               authority granting the authorization is responsible unless,
                                                                   and in so far as the legislation applicable permits, the
                 Application of domestic law                       applicant seeks permission to carry on his business only in a
                                                                   part of that territory.
The law in force in each Contracting Party shall apply:
                                                                   2. A risk shall be situated in the territory for which a
— to points which are not governed by this Agreement,              supervisory authority is responsible:
— to questions raised by points governed by this                   — in the case of insurance relating either to buildings or to
    Agreement, in so far as such questions are not regulated          buildings and their contents, in so far as the contents are
    by the Agreement.                                                 covered by the same insurance policy, where the
                                                                      property is situated in that territory,
                           Article 5
                                                                  — in the case of insurance relating to vehicles of any type,
                                                                      where the vehicle is registered in that territory,
               Principle of non-discrimination
The Contracting Parties undertake to apply the principle of       — in the case of policies of a duration of four months or
non-discrimination when introducing and applying the                  less covering travel or holiday risks, whatever the class
provisions of this Agreement.                                         concerned, where the policy-holder took out the policy
                                                                      in that territory,
                           Article 6                              — in all cases not explicitly covered by the foregoing
                                                                      indents, where the policy-holder has his habitual
                    Supervisory authority                             residence in that territory or, if the policy-holder is a
                                                                      legal person, where the latter's establishment, to which
For the purposes of this Agreement, the supervisory                   the contract relates, is situated in that territory.
authority shall, in the case of the Community, be the
competent authority of the Member State in whose                  3. Authorization shall be granted in respect of a
territory the head office of the undertaking is situated or in    particular class of insurance. It shall cover the entire class,
whose territory an agency or branch takes up or pursues the        unless the applicant wishes to cover only part of the risks
business of direct insurance.                                     pertaining to such class, as classified under part A of
                                                                  Annex I.
                         SECTION 2                                However:
          CONDITIONS GOVERNING ADMISSION                          — it shall be open to the supervisory authority to grant
                                                                      authorization for any group of classes classified under
                           Article 7                                  part B of Annex I, provided that it attaches to such
                  Compulsory authorization                            authorization the appropriate denomination specified
                                                                      therein,
1. Each Contracting Party shall make the taking-up of the
business of direct insurance in its territory by an               — authorization granted for one class or group of classes
undertaking which establishes its head office there subject           shall also be valid for the purpose of covering ancillary
to authorization by the supervisory authority.                        risks included in another class if the conditions specified
                                                                      under part C of Annex I are fulfilled.
2. Each Contracting Party shall, furthermore, make the
opening in its territory of an agency or branch of an
undertaking whose head office is situated in the territory of                                Article 9
the other Contracting Party subject to authorization by the
supervisory authority.                                                                      Legal form
3. In addition, it shall make the opening in its territory of
                                                                  The legal forms which may be assumed by an undertaking
an agency or branch of an undertaking whose head office is
                                                                  whose head office is situated in the territory of a
situated outside the territories to which this Agreement
                                                                  Contracting Party are listed in Annex III.
applies, as laid down in Article 43, subject to authorization
by the supervisory authority.
                                                                                             Article 10
                           Article 8
                                                                                   Conditions of authorization
                   Scope of authorization
                                                                   1. Each Contracting Party shall require that an undertak-
1. An authorization shall be valid for the covering of risks      ing whose head office is situated in the territory of the other
situated in the entire territory for which the supervisory         Contracting Party and which seeks an authorization to
 ---pagebreak--- No C 53/4                                 Official Journal of the European Communities                                   5. 3. 90
open in its territory an agency or branch shall satisfy the              Where the legal provisions of a Contracting Party
following conditions:                                                    permit the authorized agent to have legal personality, it
                                                                         shall have its head office in the territory of that
                                                                         Contracting Party and in turn designate an individual to
(a) it shall submit its statutes and a list of its directors and         represent it who satisfies the above conditions.
    managers;
                                                                     2. This Agreement shall not prevent the Contracting
(b) it shall produce a certificate issued by the supervisory
                                                                     Parties from enforcing provisions requiring for all
    authority of the Contracting Party in whose territory its
                                                                     insurance undertakings, at the time of granting of the
    head office is situated, attesting:
                                                                     authorization, approval of the general and special policy
                                                                     conditions, scales of premiums and any other documents
    — that the applicant undertaking is constituted in one           necessary in the normal course of events for the exercise of
        of the legal forms listed in Annex III,                      supervision.
    — that the applicant undertaking limits its business             However, with regard to the risks referred to in Article 2(1)
        activities to the business of insurance and to               of Protocol 2, the Contracting Parties shall not lay down
        operations directly arising therefrom to the exclu-          provisions requiring the approval or systematic notifi-
        sion of all other commercial business,                       cation of general and special policy conditions, scales of
                                                                     premiums, or forms and other printed documents which
                                                                     the undertaking intends to use in its dealings with policy-
    — the classes of insurance which the undertaking is
                                                                     holders. They may require only non-systematic notification
        entitled to transact,
                                                                     of these conditions and other documents, for the purpose of
                                                                     verifying compliance with laws, regulations and adminis-
    — that it possesses the minimum guarantee fund                   trative provisions in respect of such risks, and this
        referred to in Article 3 (2) of Protocol 1, or, where        requirement may not constitute a prior condition for an
        appropriate, the minimum solvency margin calcu-              undertaking to be able to carry on its activities.
        lated in accordance with Article 2 (2) of Protocol 1 if
        the minimum solvency margin is higher than the
        minimum guarantee fund,                                      For the purposes of this Agreement, general and special
                                                                     policy conditions shall not include specific conditions
                                                                     intended to meet, in an individual case, the particular
    — the risks which it actually covers,                            circumstances of the risk to be covered.
    — the existence of the financial resources referred to in        This Agreement shall likewise not prevent the Contracting
        subparagraph (f) of Article 1 of Protocol 2.                 Parties from subjecting undertakings requesting author-
                                                                     ization for class 18 in Part A of Annex I to checks on their
(c) It shall submit a scheme of operations drawn up in               direct or indirect resources in staff and equipment,
    accordance with Protocol 2, accompanied by the                   including the qualification of their medical teams and the
    balance sheet and profit and loss account of the                 quality of the equipment, available to the undertakings to
    undertaking for each of the past three financial years.          meet their commitments arising from this class of
                                                                     insurance.
    However, where an undertaking has existed for fewer
    than three financial years, it shall submit such
                                                                                               Article 11
    documents only for the financial years that have closed
    if:
                                                                                      Granting of authorization
    — it is a new undertaking created as a result of a merger
        between existing undertakings, or
                                                                     1. Each Contracting Party undertakes to grant author-
                                                                     ization provided the conditions laid down in Article 10 are
    — it is a new undertaking created by one or more                 met and further provided that the other provisions
        existing undertakings for the purpose of transacting         governing undertakings with their head offices in its
        a specific class of insurance previously pursued by          territory are observed.
        one of the undertakings in question.
                                                                     2. The Contracting Parties shall not make authorization
(d) It shall designate an authorized agent having his                subject to the lodging of a deposit or the provision of
    permanent residence and abode in the territory for               security.
    which the supervisory authority of the Contracting
    Party in question is responsible, and possessing
    sufficient powers to bind the undertaking in relation to         3. The Contracting Parties undertake furthermore that
    third parties and to represent it in relations with the          no application for an authorization shall be examined in
    authorities and courts of that Contracting Party.                the light of the economic requirements of the market.
 ---pagebreak--- 5. 3. 90                                Official Journal of the European Communities                                  No C 53/5
4. The designated authorized agent may be challenged by            regard to cases where the supervisory authority has not
the supervisory authority only on grounds relating to his          given a decision on an application for authorization upon
good repute or technical qualifications.                           the expiry of a period of six months from the date of its
                                                                   receipt.
                          Article 12
        Extension of the scope of an authorization                                          SECTION 3
                                                                    CONDITIONS GOVERNING THE PURSUIT OF BUSINESS
 1. Each Contracting Party shall make any extension of
the business for which an initial authorization was granted                                  Article 15
pursuant to Articles 7 and 8 subject to a new authorization.                              Choice of assets
2. Each Contracting Party shall require that, for the              The Contracting Parties shall not prescribe any rules as to
purpose of extending the business of an agency or branch           the choice of assets in excess of those representing the
either to other classes or in the circumstances referred to in     technical reserves referred to in Articles 19 to 23. Subject to
Article 8 (1), the applicant for the authorization shall           the provisions of Articles 18 (2), 20, 21, 23 and 29 (2) and
submit a scheme of operations in accordance with Protocol          (3), the Contracting Parties shall not restrict the free
2 and produce the certificate referred to in Article 10 (1).       disposal of movable or immovable property forming part
                                                                   of the assets of undertakings.
                          Article 13
                                                                                             Article 16
                  Authorization procedure
                                                                                Establishment of solvency margin
1. Authorization shall be sought from the supervisory
authority by the undertaking whose head office is situated         1. Each Contracting Party shall require every undertak-
in the territory of the other Contracting Party.                  ing whose head office is situated in its territory to establish
                                                                  an adequate solvency margin in respect of its entire
2. The scheme of operations drawn up in accordance                business.
with Protocol 2, together with the observations of the
supervisory authority responsible for granting author-            2. The definition of the solvency margin and the manner
ization, shall be forwarded by the latter to the supervisory      in which it is to be calculated and represented, and the
authority of the Contracting Party in whose territory the         minimum guarantee fund fixed, are set out in Protocol 1.
head office is situated.
The latter shall make known its opinion to the former                                        Article 17
within three months following receipt of the documents. If
no opinion has been received upon the expiry of that
period, it shall be deemed to be favourable.                                   Verification of the state of solvency
3. The supervisory authority from whom authorization               1. The supervisory authority of the Contracting Party in
has been sought shall forward to the applicant undertaking        whose territory the head office of the undertaking is
its decision on the application not later than six months         situated shall verify the state of solvency of the undertaking
following receipt of the application for authorization.           with respect to its entire business.
                                                                   2. The supervisory authority of the other Contracting
                          Article 14                              Party shall, where it has granted the said undertaking
                                                                  authorization to open an agency or branch, provide the
                                                                   abovementioned authority with all the information
                  Refusal of authorization                         necessary to enable such verification to be carried out.
1. Any decision to refuse an authorization shall be
                                                                   3. Each Contracting Party shall require undertakings
accompanied by the grounds on which it is based and shall
                                                                   whose head office is situated in its territory to produce an
be notified to the undertaking in question.                        annual account, covering all their transactions, of their
                                                                   situation and solvency, and, as regards cover for risks listed
2. Each Contracting Party shall make provision for a               under class 18 in part A of Annex I, of the other resources
right of recourse to the courts in the event of any refusal of     available to them for meeting their liabilities, where its laws
authorization. Provision shall also be made for such right in      provide for supervision of such resources.
 ---pagebreak--- No C 53/6                                 Official Journal of the European Communities                                   5. 3. 90
                           Article 18                                calculated in accordance with those methods, the equaliz-
                                                                     ation reserve shall be disregarded for purposes of
                                                                     calculating the solvency margin.
              Restoration of financial situation
                                                                     Undertakings shall make available to the supervisory
 1. For the purpose of restoring the financial situation of          authority accounts showing both the technical results and
an undertaking whose solvency margin has fallen below the            the technical reserves relating to this business.
minimum required under Article 2 (2) of Protocol 1, the
supervisory authority of the Contracting Party in whose
territory the head office is situated shall require a plan for
                                                                                              Article 20
the restoration of a sound financial situation to be
submitted for its approval.
                                                                       Matching assets and localization of assets constituting
2. If the solvency margin falls below the guarantee fund                                  technical reserves
defined in Article 3 of Protocol 1, the supervisory authority
of the Contracting Party in whose territory the head office          1. Technical reserves shall be represented by equivalent
of the undertaking is situated shall required the latter to          and matching assets localized in the territory for which the
submit a short-term financing plan for its approval.                 supervisory authority of each Contracting Party is
                                                                    respectively responsible. Each Contracting Party may,
                                                                    however, permit relaxations of the rules on matching assets
It may also restrict or prohibit the free disposal of the assets
                                                                     and the localization of assets.
of the undertaking. It shall inform the supervisory
authority of the Contracting Party in whose territory
authorized agencies or branches of the undertaking are              2. 'Matching assets' means the representation of under-
situated of any such measures. If they are requested by the         writing liabilities expressed in a particular currency by
former authority, the latter authority shall take the same          assets expressed or realizable in the same currency.
measures.
                                                                    3. 'Localization of assets' means the existence of movable
The supervisory authority may, furthermore, take all                or immovable assets in the territory for which the
measures necessary to safeguard the interests of insured            supervisory authority of the Contracting Party concerned is
persons should the situation envisaged in this paragraph            responsible, but shall not be construed as involving a
arise.                                                              requirement that movable property be deposited or that
                                                                    immovable property be made subject to restrictive
                                                                    measures such as the registration of a mortgage. Assets
                                                                    represented by claims against debtors shall be regarded as
                          Article 19
                                                                    localized in the territory for which the supervisory
                                                                    authority of the Contracting Party where they are to be
             Establishment of technical reserves                    realized is responsible.
1. Each Contracting Party in whose territory an under-              Subject to the above, localization shall be governed by the
taking carries on business shall require that undertaking to        respective rules in force in the Contracting Parties.
establish sufficient technical reserves.
2. The amount of such reserves shall be determined in                                         Article 21
accordance with the rules laid down in each Contracting
Party, or, in the absence of such rules, in accordance with                         Nature of technical reserves
the established practices in each Contracting Party.
                                                                    1. The rules in force in the Contracting Party in whose
3. Each Contracting Party shall furthermore require                 territory an undertaking pursues its business shall
undertakings established in its territory and underwriting          determine the nature of the assets and, where appropriate,
risks listed under class 14 in part A of Annex I (credit            the extent to which they may be used for the purpose of
insurance) to set up an equalization reserve for the purpose        representing the technical reserves, and shall also de-
of offsetting any technical deficit or above-average claims         termine the rules for valuing such assets.
ratio arising in that class for a financial year.
                                                                    2. The expression 'nature of the assets' refers to the
The methods of calculating the equalization reserve and the         various categories of movable and immovable assets and
conditions governing exemption from the obligation to               their specific characteristics, such as those relating to the
make such a reserve are set out in Annex V.                         debtor in the case of a claim forming part of the technical
                                                                    reserves.
The equalization reserve must be calculated, under the
rules laid down by each Contracting Party, in accordance            3. If a Contracting Party allows any technical reserves to
with one of the four methods set out in Annex V, which              be represented by claims against re-insurers, it shall fix the
shall be regarded as being equivalent. Up to the amount             percentage so allowed or shall make provision for it to be
 ---pagebreak--- 5. 3. 90                                  Official Journal of the European Communities                                 No C 53/7
fixed. In such case, notwithstanding the provisions of               existence in each of the Contracting Parties of provisions
Article 20 (1), it may not require the assets representing           providing policy-holders with the option of cancelling the
such claims to be localized.                                         contract within a given period after the transfer.
                           Article 22                                                          Article 25
                         Balance sheet
                                                                           Approval of conditions and scales of premiums
The supervisory authority of the Contracting Party in
whose territory the head office of an undertaking is situated        1. This Agreement shall not prevent the Contracting
shall verify that the undertaking's balance sheet shows in           Parties from enforcing provisions requiring of all undertak-
respect of the technical reserves assets equivalent to the           ings and in respect of all classes of insurance, during the
underwriting liabilities assumed in all the countries in             pursuit of business, approval of the general and special
which it carries on business.                                        policy conditions, scales of premiums and any other
                                                                     documents necessary in the normal course of events for the
                                                                     exercise of supervision.
                           Article 23
                                                                     However, with regard to the risks referred to in Article 2(1)
      Non-compliance with the requirements relating                  Protocol 2, the Contracting Parties shall not lay down
                     to technical reserves                           provisions requiring the approval or systematic notifi-
                                                                     cation of general and special policy conditions, scales of
If an agency or branch does not comply with the provisions           premiums, forms and other printed documents which the
laid down in Article 19 to 21, the supervisory authority of          undertaking intends to use in its dealings with policy-
the Contracting Party in whose territory it carries on               holders. They may require only non-systematic notification
business may prohibit the free disposal of assets localized in       of these conditions and other documents, for the purpose of
its territory after having informed the supervisory                  verifying compliance with laws, regulations and adminis-
authority of the Contracting Party in whose territory the            trative provisions in respect of such risks.
head office is situated that it intends to take such action.
                                                                     With regard to the same risks, the Contracting Parties may
The supervisory authority of the Contracting Party in                not retain or introduce prior notification or approval of
whose territory such agency or branch carries on business            proposed increases in premium rates except as part of a
may, furthermore, take any measure necessary to safeguard            general price control system.
the interests of insured persons.
                                                                     2. This Agreement shall likewise not prevent the
                                                                     Contracting Parties from subjecting undertakings which
                           Article 24
                                                                     have obtained authorization for class 18 in part A of Annex
                                                                     I to checks on their direct or indirect resources in staff and
                    Transfer of portfolio                            equipment, including the qualification of their medical
                                                                     teams and the quality of the equipment, available to the
1. Under the conditions laid down by the legal provisions            undertakings to meet their commitments arising from this
in force in the Contracting Party in question, the                   class of insurance.
supervisory authority shall authorize undertakings which
are established in the territory for which it is responsible to
                                                                     3. For the purposes of this Agreement, general and special
transfer all or part of their portfolios of contracts to an
                                                                     policy conditions shall not include specific conditions
accepting office established in the same territory as the
                                                                     intended to meet, in an individual case, the particular
transferring undertaking, if the supervisory authority of the
                                                                     circumstances of the risk to be covered.
Contracting Party in whose territory the head office of the
accepting office is situated certifies that the latter possesses
the necessary margin of solvency after taking the transfer
into account.                                                                                  Article 26
2. A transfer authorized in accordance with paragraph 1                                     Documentation
shall be published in the territory for which the supervisory
authority of the Contracting Party in which the transferring
undertaking and the accepting office are established is              The Contracting Parties shall require undertakings
responsible, under the conditions laid down by the legal             carrying on business in their territory to produce the
provisions in force the Contracting Party in question. Such          documents, including statistical documents, necessary for
transfer shall be automatically valid against the policy-            the exercise of supervision and, as regards cover for risks
holders, the insured persons and any other person having             listed under class 18 in part A of Annex I, to indicate the
rights and obligations arising out of the contracts                  resources available to them for meeting their liabilites,
transferred. However, this paragraph shall not preclude the          where their laws provide for supervision of such resources.
 ---pagebreak--- No C 53/8                                 Official Journal of the European Communities                                    5. 3. 90
                          SECTION 4                                  3. Paragraphs 1 and, where relevant, 2 shall likewise
                                                                     apply where the undertaking surrenders of its own accord
            WITHDRAWAL OF AUTHORIZATION
                                                                     the authorization granted to it.
                           Article 27
                   Withdrawal conditions
                                                                                              SECTION 5
The supervisory authority of a Contracting Party may                        COLLABORATION BETWEEN SUPERVISORY
withdraw from an undertaking whose head office is                                           AUTHORITIES
situated in the territory of the other Contracting Party the
authorization which it granted to open an agency or branch                                    Article 30
where such agency or branch:
                                                                                     Conditions of collaboration
(a) no longer fulfils the conditions for admission; or
                                                                     The Contracting Parties shall take all necessary measures
                                                                     to enable their supervisory authorities to collaborate
(b) fails seriously to fulfil its obligations under the rules
                                                                     closely in the implementation of this Agreement.
    applicable to it, in particular with respect to the
    establishment of technical reserves.
                                                                                              Article 31
                           Article 28
                                                                                     Objectives of collaboration
                    Withdrawal procedure
                                                                     1. The supervisory authorities shall collaborate in
1. Before withdrawing authorization, the supervisory                verifying the provision by undertakings of financial
authority shall consult the supervisory authority of the            guarantees as defined in Articles 16 and 19 to 21 and, in
Contracting Party in whose territory the head office of the         particular, in applying the measures provided for in
undertaking is situated.                                             Articles 18 and 23.
If the former authority deems it necessary to suspend the            2. Should the undertakings in question be authorized to
business of the agency or branch referred to in Article 27          cover the risks listed under class 18 in part A of Annex I, the
before consultation is concluded, it shall immediately              supervisory authorities shall also collaborate in supervising
advise the latter authority thereof.                                the resources available to those undertakings for carrying
                                                                    out the assistance operations they have undertaken to
2. Any decision to withdraw an authorization or to order            perform, where their laws provide for supervision of such
the suspension of business shall state the reasons on which         resources.
it is based and shall be notified to the undertaking in
question.
                                                                                              Article 32
3. Each Contracting Party shall make provision for a
right of recourse to the courts against such a decision.                              Exchange of information
                                                                    The supervisory authorities shall furnish each other with
                           Article 29                               all documents and information necessary for exercising
                                                                    supervision.
   Withdrawal of the authorization granted to the head
                             office
                                                                                              Article 33
1. Where the supervisory authority of a Contracting
Party in whose territory the head office is situated                                           Secrecy
withdraws the authorization which it has granted to the
undertaking, it shall notify such action to the supervisory          1. Articles 30 to 32 shall under no circumstances be
authority of the other Contracting Party if the latter has          interpreted as requiring any supervisory authority to
granted the undertaking, authorization to open an agency            furnish information which would disclose commercial
or branch. The latter authority shall also withdraw its             secrets of an undertaking or information the communi-
authorization.                                                      cation of which would be contrary to public policy.
2. In the case referred to in paragraph 1, the supervisory          2. Nevertheless, the secrecy rules to which the super-
authority of the Contracting Party in whose territory the           visory authorities are subject shall not hinder collaboration
head office is situated shall, in conjunction with the              between those authorities and the mutual assistance
supervisory authority of the other Contracting Party, take          provided for by this Agreement.
all measures necessary to safeguard the interests of insured
persons and shall, in particular, restrict the free disposal of      3. The information exchanged shall be used by such
the assets of the undertaking, if this measure has not               authorities solely for the purpose of carrying out their
already been taken, pursuant to Articles 18 (2) and 23.              supervisory duties.
 ---pagebreak--- 5. 3. 90                                 Official Journal of the European Communities                                 No C 53/9
                          SECTION 6                                 circumstances so require, at the request of either Contract-
                                                                    ing Party, in accordance with conditions to be laid down in
            GENERAL AND FINAL PROVISIONS
                                                                    its rules of procedure.
                          Article 34
Particular provisions and undertakings of third countries           The Joint Committee may decide to set up any working
                                                                    party needed to assist it in carrying out its tasks.
 1. Particular provisions applicable to certain Member
States of the Community are set out in Annex IV.
                                                                                              Article 38
2. The provisions applicable to agencies and branches of
undertakings whose head office is situated outside the
territories to which this Agreement applies pursuant to                                 Settlement of disputes
Article 43 thereof are set out in Protocol 4.
                                                                    1. If a dispute arises between the Contracting Parties
                          Article 35                                concerning the operation of this Agreement and in
                                                                    particular its interpretation or implementation and such
              Integral parts of the Agreement                       dispute cannot be resolved either through collaboration
                                                                    between the supervisory authorities referred to in Section 5
The Annexes, Protocols and Exchanges of Letters annexed             or by the Joint Committee referred to in Article 37, the
to this Agreement shall form an integral part thereof.              Contracting Parties shall consult each other through
                                                                    diplomatic channels.
                          Article 36
                                                                    2. If it has not been possible to resolve the dispute by
                 Failure to fulfil obligations                      means of the procedure provided for in paragraph 1, it shall
                                                                    be referred, at the request of either of the Parties, to an
1. The Contracting Parties shall refrain from taking any           arbitration tribunal consisting of three members. Reference
measures which might jeopardize the attainment of the               may be made to this tribunal at the earliest after a period of
objectives of this Agreement.                                      two years following the first reference to the Joint
                                                                    Committee referred to in Article 37, unless the Parties agree
2. They shall take all general or special measures
                                                                   jointly to refer their dispute to the said tribunal before the
necessary to ensure fulfilment of the obligations arising
                                                                   end of that period. Each Party shall appoint an arbitrator.
from this Agreement.
                                                                   The two arbitrators appointed shall appoint an umpire
If either Contracting Party considers that the other               who shall be a national neither of Switzerland nor of a
Contracting Party has failed to fulfil an obligation arising       Member State of the Community.
from this Agreement, the procedure referred to in Article 37
(2) shall apply.                                                   3. Where one of the Contracting Parties does not appoint
                                                                   its arbitrator and has not complied with the request made
                                                                   by the other Party to make such appointment within two
                          Article 37
                                                                   months, the arbitrator shall be appointed, at the request of
                                                                   the former Party, by the President of the International
                      Joint Committee
                                                                   Court of Justice.
1. A Joint Committee, composed of representatives of
Switzerland and representatives of the Community, is               4. Where after a period of two months following their
hereby established, which shall be responsible for the             appointment the two arbitrators are unable to agree on the
administration of the Agreement and its proper implemen-           choise of an umpire, the latter shall be appointed at the
tation and for taking decisions in the circumstances               request of one of the Parties by the President of the
provided for therein. Its decisions shall be taken by mutual       International Court of Justice.
agreement.
2. For the purpose of the proper implementation of the             5. Where, in the cases provided for in paragraphs 3 and 4,
Agreement, the Contracting Parties shall exchange inform-          the President of the International Court of Justice is unable
ation and, at the request of either Party, shall hold              to act, or is a national of Switzerland or of a Member State
consultations within the Joint Committee. The exercise of          of the Community, the appointments shall be made by the
supervision, referred to in Section 5, shall not come within       Vice-President. If the latter is unable to act or is a national
its powers.                                                        of Switzerland or of a Member State of the Community, the
                                                                   appointments shall be made by the oldest member of the
3. The Joint Committee shall adopt its own rules of                Court who is not a national either of Switzerland or of a
procedure.                                                         Member State of the Community.
4. The Joint Committee shall be chaired in turn by each
of the Contracting Parties in accordance with detailed             6. Save as otherwise provided by the Contracting Parties,
arrangements to be laid down in its rules of procedure. It         the tribunal shall lay down its own rules of procedure. It
shall be convened by its chairman whenever special                 shall take its decisions by majority vote.
 ---pagebreak---  No C 53/10                              Official Journal of the European Communities                                     5. 3. 90
 7. The decisions of the tribunal shall be binding on the           necessary for ratification or approval by the Contracting
 Contracting Parties.                                               Parties in accordance with their own procedures. The
                                                                    Contracting Parties shall notify each other of the
                                                                    completion of this formality. If upon the expiry of the
                           Article 39
                                                                    period provided for in paragraph 4 such notification has
                                                                    not taken place, the decisions of the Joint Committee shall
  Evolution of the domestic legislation of the Contracting
                                                                    be implemented provisionally pending their ratification or
                            Parties
                                                                    approval by the Contracting Parties. If either Contracting
 1. The Agreement shall be without prejudice to the right           Party notifies the non-ratification or non-approval of a
 of each Contracting Party, subject to compliance with the          decision of the Joint Committee, paragraph 8 shall apply
 principle of non-discrimination and the provisions of this         mutatis mutandis from the time of such notification.
 Article, unilaterally to amend its domestic legislation on a
 point regulated by this Agreement.
                                                                    8. If the Joint Committee does not reach agreement on
 2. As soon as a Contracting Party has initiated the process        the decisions to be taken within six months of the date of
 for adopting a draft amendment of its domestic legislation         referral pursuant to paragraph 5, the Agreement shall be
 concerning the conditions for taking up and pursuing, by           regarded as ended on the day the legislation in question is
 means of establishment, the activity of direct insurance           implemented, pursuant to paragraph 4 ; in that event the
 other than life assurance, it shall inform the other              provisions of Article 38 are not applicable. The provisions
 Contracting Party via the Joint Committee referred to in           of Article 42 (2) shall apply mutatis mutandis.
 Article 37. The Joint Committee shall hold an exchange of
 views on the implications of such an amendment for the
proper functioning of the Agreement.
                                                                                              Article 40
3. As soon as the amended legislation has been adopted,
 and eight days after adoption at the latest, the Contracting
Party concerned shall notify the text of the new provisions
to the other Contracting Party.                                                      Revision of the Agreement
4. In order to guarantee legal certainty, a period of at least
 12 months from the date of adoption of the amended                 1. If a Contracting Party wishes that this Agreement be
legislation must be laid down by the Contracting Party             revised, it shall request the other Contracting Party to open
concerned for the implementation of any amendment of               negotiations to that end. Such request shall be made
legislation which deviates from the provisions of the              through diplomatic channels.
Agreement.
5. Any amendment of legislation which has been the                 2. Amendments to this Agreement shall enter into force in
subject of the procedures referred to in paragraphs 2 and 3        accordance with the procedure set out in Article 44.
and which, in the opinion of either Contracting Party,
deviates from the provisions of the Agreement, shall be
referred to the Joint Committee. The Joint Committee shall
                                                                   3. Nevertheless, amendments to        the Annexes, Protocols
meet at the latest six weeks after the notification laid down
                                                                   and Exchanges of Letters annexed      to this Agreement shall
in paragraph 3.
                                                                   be adopted by the Joint Committee     referred to in Article 37,
6.   The Joint Committee shall:                                    which shall determine the date of     their entry into force.
— either adopt a decision revising the provisions of the
    Agreement so as to integrate therein, if necessary on a
    basis of reciprocity, the admendments made to the                                         Article 41
    legislation in question,
— or, as long as the insured person is guaranteed                             Matters not covered by the Agreement
    equivalent protection to that provided for under the
    Agreement, adopt a decision to the effect that the
    amendments to the legislation in question shall be
                                                                   1. Where a Contracting Party considers that it would be
    regarded as in accordance with the Agreement,
                                                                   useful in the interests of both Contracting Parties to
— or decide any other measure to safeguard the proper              develop the relations established by this Agreement by
    functioning of the Agreement.                                  extending them to private insurance activities not covered
                                                                   thereby, it shall propose to the other Contracting Party that
7. The decisions of the Joint Committee shall be                   negotiations be opened to that end.
published in the Official Compendium of Federal Laws
(Recueil Officiel des lois federales) and in the Official
Journal of the European Communies. Each decision shall             2. Agreements resulting from negotiations referred to in
state the date of its implementation in the two Contracting        paragraph 1 shall be subject to ratification or approval by
Parties and any other information likely to concern                the Contracting Parties in accordance with their own
economic operators. The decisions shall be submitted as            procedures.
 ---pagebreak--- o.3.^0                                             Cofficialjournal of the European Communities                              ^oC^Bll
                                 ArrA^^                                       Economic Community applies upon the terms laid down in
                                                                              thatTreatyand^ on the othermo the territory of the ^wiss
                                denunciation                                  Confederation
L Either contracting l^artymaydenouncethis Agreed
ment at any time by notifying the other Contracting Earty                                              Arr^^^
to that effect^The Agreement shall cease to be in f o r c e d
months after the date of such notification.
                                                                                                    Entry into force
^ In the event of denunciations the Contracting parties
shall jointly agree on rules governing the situation of                       P This Agreement was negotiated in Erench and drawn
undertakings which have obtained authorisation in                             up in two originals in the tO^nish^Eo^tch^ English^ Erench^
accordance w i t h A r t i c l e l l ^ i p i n the absence of agreement       C^erman^ree^ltalian^ortuguese and Spanish languages^
upon expiry of the period of t^. months referred to in                        each of these texts being equally authentic
p a r a g r a p h ^ t h o s e undertakings shall be made subject to
the rules applicable to those of third countries, l^everthe^                  ^ This Agreement shall be ratified or approved by the
less^ the ContractingEarties hereby undertake that the                        Contracting parties in accordance with their own proD
authorisation obtained in accordance with ArticleM ^                          cedures.
shall not be withdrawn in the light of the economic
requirementsofthemarleetforaperiodofatleastfiveyears                          3,    ThisAgreementshallenterintoforceonthefirstdayof
from thedateon which this Agreement ceases to be inforce.                     the calendar year following the exchange of instruments of
                                                                              ratification or approval on condition that such exchange
                                                                              tal^es place not later than one month before that date.
                                  Arr^^^
                     Territorial scope of Agreement                           nevertheless^ the Contracting Eartiesmay^on exchanging
                                                                              instrumentsofratificationor approvals jointly agree on
This Agreement shall apply^ on the one hand^ to the                           another date for the entry into force of this Agreement^in
territories to which theTreaty establishing the European                      that case^ the date shall be published forthwith.
 ---pagebreak--- No C 53/12                               Official Journal of the European Communities 5. 3. 90
           Hecho en            , el
           Udfaerdiget i            , den
           Geschehen zu               , am
           'Eyive         , tr|v
           Done at          , on this              day of        in the year
           Fait a        , le
           Fatto a         , il
           Gedaan te            , de
           Feito em          , em
           En nombre del Consejo de las Comunidades Europeas
           Pa Radet for De Europaeiske Faellesskabers vegne
           Im Namen des Rates der Europaischen Gemeinschaften
           Tia t o SonPouXio xcov Ei)pt07taiK(bv Koivoxfitcov
           In the name of the Council of the European Communities
           Au nom du Conseil des Communautes europeennes
           A nome del Consiglio delle Comunita Europee
           Namens de Raad van de Europese Gemeenschappen
           Em nome do Conselho das Comunidades Europeias
           Fur die Schweizerische Eidgenossenschaft
           Pour la Confederation Suisse
           Per la Confederazione svizzera
 ---pagebreak--- 5. 3. 90                             Official J o u r n a l of t h e E u r o p e a n C o m m u n i t i e s                 No C 53/13
                                                              ANNEX        I
                               CLASSES OF INSURANCE SUBJECT T O THE AGREEMENT
         A. Classification of risks according to classes of insurance
            1. Accident (including industrial injury and occupational diseases):
               — fixed pecuniary benefits,
               — benefits in the nature of indemnity,
               — combinations of the two,
               — injury to passengers.
            2.   Sickness:
               — fixed pecuniary benefits,
               — benefits in the nature of indemnity,
               — combinations of the two.
            3. Land vehicles (other than railway rolling stock):
               All damage to or loss of:
               — land motor vehicles,
               — land vehicles other than motor vehicles.
            4. Railway rolling stock :
               All damage to or loss of railway rolling stock.
            5.   Aircraft:
               All damage to or loss of aircraft.
            6. Ships (sea, lake, river and canal vessels):
               All damage to or loss of:
               — river and canal vessels,
               — lake vessels,
               — sea vessels.
            7. Goods in transit (including merchandise, baggage and all other goods):
               All damage to or loss of goods in transit or baggage, irrespective of the form of transport.
            8. Fire and natural forces:
               All damage to or loss of property (other than property included in classes 3, 4, 5, 6 and 7) due t o :
               — fire,
               — explosion,
               — storm,
               — natural forces other than storm,
               — nuclear energy,
               — land subsidence.
            9. Other damage to property:
                All damage to or loss of property (other than property included in classes 3, 4, 5, 6 and 7) due to hail or
                frost, and any event such as theft, other than those mentioned under 8.
 ---pagebreak--- No C 53/14                                Official Journal of the European Communities                                            5. 3. 90
               10. Motor vehicle liability:
                   All liability arising out of the use of motor vehicles operating on land (including carrier's liability).
               11. Aircraft    liability:
                   All liability arising out of the use of aircraft (including carrier's liability).
               12. Liability for ships (sea, lake, river and canal vessels):
                   All liability arising out of the use of ships, vessels or boats on the sea, lakes, rivers or canals (including
                   carrier's liability).
               13. General liability:
                   All liability other than those forms mentioned under 10, 11 and 12.
              14. Credit:
                   — insolvency (general),
                   — export credit,
                   — instalment credit,
                   — mortgages,
                   — agricultural credit.
              15. Suretyship:
                   — suretyship (direct),
                   — suretyship (indirect).
              16. Miscellaneous financial loss:
                  — employment risks,
                  — insufficiency of income (general),
                  — bad weather,
                  — loss of profits,
                  — continuing general expenses,
                   — unforeseen trading expenses,
                  — loss of market value,
                  — loss of rent or revenue,
                  — indirect trading losses other than those mentioned above,
                  — other financial loss (non-trading),
                  — other forms of financial loss.
              17. Legal expenses:
                   Legal expenses and costs of litigation.
              18. Tourist    assistance:
                   Assistance for persons who get into difficulties while travelling, while away from home or while away
                   from their permanent residence.
              The risks included in a class may not be included in any other class except in the cases referred to in part C.
           B. Description of authorizations granted simultaneously for more than one class of insurance
              Where the authorization simultaneously covers:
              (a) classes 1 and 2, it shall be named 'accident and health insurance';
              (b) classes 1 (fourth indent), 3, 7 and 10, it shall be named 'motor insurance';
              (c) classes 1 (fourth indent), 4, 6, 7 and 12, it shall be named 'marine and transport insurance';
              (d) classes 1 (fourth indent), 5, 7 and 11, it shall be named 'aviation insurance';
 ---pagebreak--- 5. 3. 90                                Official Journal of the European Communities                                          No C 53/15
            (e) classes 8 and 9, it shall be named 'insurance against fire and other damage to property';
            (f) classes 10, 11, 12 and 13, it shall be named 'liability insurance';
            (g) classes 14 and 15, it shall be named 'credit and suretyship insurance';
            (h) all classes, it shall be named at the choice of the Contracting Party in question, which shall notify the
                other Contracting Party of its choice.
         C. Ancillary risks
            An undertaking obtaining an authorization for a principal risk belonging to one class or a group of classes
            may also insure risks included in another class without an authorization being necessary for them if they:
            — are connected with the principal risk,
            — concern the object which is covered against the principal risk, and
            — are covered by the contract insuring the principal risk.
            However, the risks included in classes 14,15 and 17 may not be regarded as risks ancillary to other classes.
            Nonetheless, the risk included in class 17 (legal expenses insurance) may be regarded as an ancillary risk of
            class 18 where the conditions laid down in the first subparagraph of part C of this Annex are fulfilled, and
            where the main risk relates solely to the assistance provided for persons who fall into difficulties while
            travelling, while away from home or while away from their permanent residence.
            Legal expenses insurance may also be regarded as an ancillary risk under the conditions set out in the first
            subparagraph of part C of this Annex where it concerns disputes or risks arising out of, or in connection
            with, the use of sea-going vessels.
         D. Assistance
            1. The assistance activity shall be the assistance provided for persons who get into difficulties while
                travelling, while away from home or while away from their permanent residence. It shall consist in
                undertaking, against the prior payment of a premium, to make aid immediately available to the
                beneficiary under an assistance contract where that person is in difficulties following the occurrence of a
                chance event, in the cases and under the conditions set out in the contract.
                The aid may consist in the provision of benefits in cash or in kind. The provision of benefits in kind may
                also be effected by means of the staff and equipment of the person providing them.
                The assistance activity does not cover servicing, maintenance, after-sales service or the mere indication
                or provision of aid as an intermediary.
            2. Either Contracting Party may, in its territory, make the provision of assistance to persons who get into
                difficulties in circumstances other than those referred to in paragraph 1 subject to the arrangements
                introduced by this Agreement. If a Contracting Party makes use of this possibility it shall, for the
                purposes of applying these arrangements, treat such activity as if it were listed under class 18 in part A of
                this Annex, without prejudice to part C thereof.
                This shall in no way affect the possibilities for classification laid down in this Annex for activities which
                clearly come under other classes.
                It shall not be possible to refuse authorization sought for an agency or branch by an undertaking whose
                head office is situated in the territory of the other Contracting Party solely on the grounds that the
                activity covered by this point is classified differently in that other Contracting Party.
 ---pagebreak--- No C 53/16                              Official J o u r n a l of the E u r o p e a n C o m m u n i t i e s                    5. 3 . 90
                                                                 ANNEX 11
                      KINDS OF INSURANCE, OPERATIONS AND UNDERTAKINGS N O T SUBJECT
                                                        T O THE AGREEMENT
           A. Kinds of insurance excluded
              This Agreement does not apply t o :
              1. Life assurance, that is to say the class of insurance which comprises, in particular, assurance on survival
                 to a stipulated age only, assurance on death only, assurance on survival to a stipulated age or on earlier
                 death, life assurance with return of premiums, tontines, marriage assurance and birth assurance.
              2. Annuities.
              3. Supplementary insurance carried on by life assurance undertakings, that is to say, insurance against
                 personal injury including incapacity for employment, insurance against death resulting from an
                 accident, and insurance against disability resulting from an accident or sickness, where these various
                 kinds of insurance are underwritten in addition to life assurance.
              4. In   Switzerland:
                 insurance forming part of a statutory system of social security, except where such insurance is written by
                 authorized undertakings.
                 In the    Community:
                 insurance forming part of a statutory system of social security.
              5. The type of insurance existing in Ireland and the United Kingdom known as 'permanent health
                 insurance not subject to cancellation'.
           B. Operations excluded
              This Agreement does not apply to:
              1. Capital redemption operations, as defined by the law in each Contracting Party.
              2. Operations of provident and mutual benefit institutions whose benefits vary according to the resources
                 available and in which the contributions of members are determined on a flat-rate basis.
              3. Operations carried out by organizations not having legal personality with the purpose of providing
                 mutual cover for their members without there being any payment of premiums or constitution of
                 technical reserves.
              4. Export credit insurance operations for the account of or supported by the State, or where the State is the
                 insurer.
              5. The assistance activity in which liability is limited to the following operations provided in the event of an
                 accident or breakdown involving a road vehicle which normally occurs in the territory of the
                 Contracting Party in which the undertaking providing cover is established:
                 — an on-the-spot breakdown service for which the undertaking providing cover uses, in most
                     circumstances, its own staff and equipment,
                 — the conveyance of the vehicle to the nearest or the most appropriate location at which repairs may be
                     carried out and the possible accompaniment, normally by the same means of assistance, of the driver
                     and passengers to the nearest location from where they may continue their journey by other means,
                 — if provided for by the Contracting Party in which the undertaking providing cover is established, the
                     conveyance of the vehicle, possibly accompanied by the driver and passengers, to their home, point
                     of departure or original destination within the same Contracting Party,
                 unless such operations are carried out by an undertaking subject to the Agreement.
                 In the cases referred to in the first two indents, the condition that the accident or breakdown must have
                 happened in the territory of the Contracting Party in which the undertaking providing cover is
                 established:
                 (a) shall not apply where the latter is a body of which the beneficiary is a member and the breakdown
                     service or conveyance of the vehicle is provided simply on presentation of a membership card,
                     without any additional premium being paid, by a similar body in the Contracting Party concerned on
                     the basis of a reciprocal agreement;
 ---pagebreak--- 5. 3. 90                              Official Journal of the European Communities                                        No C 53/17
               (b) shall not preclude the provision of such assistance in Ireland and the United Kingdom by a single
                   body operating in both States.
               In the circumstances referred to in the third indent, where the accident or the breakdown has occurred in
               the territory of Ireland or, in the case of the United Kingdom, in the territory of Northern Ireland, the
               vehicle, possibly accompanied by the driver and passengers, may be conveyed to their home, point of
               departure or original destination within either territory.
               Moreover, the Agreement does not concern assistance operations carried out on the occasion of an
               accident to or the breakdown of a road vehicle and consisting in conveying the vehicle which has been
               involved in an accident or has broken down outside the territory of the Grand Duchy of Luxembourg,
               possibly accompanied by the driver and passengers, to their home, where such operations are carried out
               by the Automobile Club of the Grand Duchy of Luxembourg.
               Undertakings subject to the Agreement may engage in the activity referred to under this point only if they
               have received authorization for class 18 in part A of Annex I without prejudice to part C of the said
               Annex. In that event the Agreement shall apply to the operations in question.
         C. Exclusion of undertakings occupying special positions
            This Agreement does not apply:
            1. To undertakings which fulfil the following conditions:
               — the undertaking does not pursue any activity falling within the scope of the Agreement other than the
                   one described in class 18 in part A of Annex I.
               — the activity is carried out exclusively on a local basis and consists only of benefits in kind,
                   and
               — the total annual income collected in respect of the activity of assistance to persons who get into
                   difficulties does not exceed ECU 200 000.
            2. In the case of undertakings whose head office is situated in Switzerland, t o :
               Undertakings whose annual premium income for the activities covered by the Agreement does not
               exceed the sum of Sfrs 3 million on the date of entry into force of this Agreement and whose activities
               extend only to Swiss territory for such time as they satisfy these conditions. Once it has become subject
               to the rules of the Agreement an undertaking may not rely on this exception even if it satisfies the two
                abovementioned conditions.
            3. In the case of undertakings whose head office is situated in the Community, t o :
               — Mutual associations in so far as they fulfil all the following conditions:
                   — the articles of association contain provisions for calling up additional contributions or reducing
                        their benefits,
                   — their business does not cover liability risks — unless the latter constitute ancillary cover within
                        the meaning of part C of Annex I — or credit and suretyship risks,
                   — the annual contribution income for the activities covered by this Agreement does not exceed ECU
                        1 million,
                        and
                   — at least half of the contribution income from the activities covered by this Agreement comes from
                        persons who are members of the mutual association.
                — Mutual associations which have concluded with another undertaking of the same nature an
                    agreement which provides for the full reinsurance of the insurance contracts concluded by them or
                    under which the transferee undertaking is to meet the liabilities arising out of such contracts in the
                    place of the transferor undertaking.
                    In such a case, the transferee undertaking shall be subject to this Agreement.
         D. Exclusion of specific undertakings
            This Agreement shall not apply to the undertakings listed under 1 and 2 unless their articles of association
            are amended as regards capacity.
            However, the territorial capacity of the undertakings referred to in 1 and 2 (b) shall not be regarded as
            modified in the case of a merger between or division of such undertakings which has the effect of
            maintaining for the benefit of the new undertaking or undertakings the territorial capacity of the
            undertaking which has divided or the undertakings which have merged, nor shall capacity as to the classes of
 ---pagebreak--- No C 53/18                            Official J o u r n a l of the E u r o p e a n C o m m u n i t i e s               5. 3. 90
           insurance be regarded as modified if one of the undertakings takes over in respect of the same territory one
           or more of the classes of another such undertaking.
           1. In    Switzerland:
               The following cantonal institutions under public law, enjoying a monopoly:
               (a) Aargau: Aargauisches Versicherungsamt, Aargau;
               (b) Appenzell Ausser-Roden: Brand- und Elementarschadenversicherung Appenzell AR, Herisau;
               (c) Basel-Land: Basellandschaftliche Gebaudeversicherung, Liestal;
               (d) Basel-Stadt: Gebaudeversicherung des Kantons Basel-Stadt, Basel;
               (e) Bern/Berne: Gebaudeversicherung des Kantons Bern, Bern, Assurance immobiliere du canton de
                   Berne, Berne;
               (f) Fribourg/Freiburg: Etablissement cantonal d'assurance des batiments du canton de Fribourg,
                   Fribourg/Kantonale Gebaudeversicherungsanstalt Freiburg, Freiburg;
               (g) Glarus: Kantonale Sachversicherung Glarus, Glarus;
               (h) Graubunden/Grigioni/Grischun: Gebaudeversicherungsanstalt des Kantons Graubiinden, Chur,
                   Istituto d'assicurazione fabbricati del cantone dei Grigioni, Coira, Istitut dil cantun Grischun per
                   assicuranzas da baghetgs, Cuera;
               (i) Jura: Assurance immobiliere de la Republique et canton du Jura, Saignelegier;
               (j) Luzern: Gebaudeversicherungsanstalt des Kantons Luzern, Luzern;
               (k) Neuchatel: Etablissement cantonal d'assurance immobiliere contre l'incendie, Neuchatel;
               (i) Nidwalden: Kantonale Brandversicherungsanstalt Nidwalden, Stans;
               (m)Schaffhausen: Gebaudeversicherung des Kantons Schaffhausen, Schaffhausen;
               (n) Solothurn: Solothurnische Gebaudeversicherung, Solothurn;
               (o) St. Gallen: Gebaudeversicherungsanstalt des Kantons St. Gallen, St. Gallen;
               (p) Thurgau: Gebaudeversicherung des Kantons Thurgau, Frauenfeld;
               (q) Vaud: Etablissement d'assurance contre l'incendie et les elements naturels du canton de Vaud,
                   Lausanne;
               (r) Zug: Gebaudeversicherung des Kantons Zug, Zug;
               (s) Zurich: Gebaudeversicherung des Kantons Zurich, Zurich.
           2. In the      Community:
               (a) In D e n m a r k :
                   Falcks Redningskorps A/S, Kebenhavn;
               (b) In G e r m a n y :
                   — the following institutions under public law enjoying a monopoly (Monopolanstalten):
                        aa)  Badische Gebaudeversicherungsanstalt, Karlsruhe,
                        (bb) Bayerische Landesbrandversicherungsanstalt, Miinchen,
                        (cc) Bayerische Landestierversicherungsanstalt, Schlachtviehversicherung, Miinchen,
                        (dd) Braunschweigische Landesbrandversicherungsanstalt, Braunschweig,
                        (ee) Hamburger Feuerkasse, Hamburg,
                        (ff)  Hessische Brandversicherungsanstalt (Hessische Brandversicherungskammer), Darmstadt,
                        (gg) Hessische Brandversicherungsanstalt, Kassel,
                        (hh) Lippische Landesbrandversicherungsanstalt, Detmold,
                        (ii)  Nassauische Brandversicherungsanstalt, Wiesbaden,
                        (jj)  Oldenburgische Landesbrandkasse, Oldenburg,
                        (kk) Ostfriesische Landschaftliche Brandkasse, Aurich,
                        (11)  Feuersozietat Berlin, Berlin,
                        (mm)Wurttembergische Gebaudebrandversicherungsanstalt, Stuttgart;
 ---pagebreak--- 5. 3 . 90                                Official J o u r n a l of the E u r o p e a n C o m m u n i t i e s                No C 53/19
                      — the following semi-public institutions:
                          (nn) Postbeamtenkrankenkasse,
                          (oo) Krankenversorgung der Bundesbahnbeamten;
                  (c) In Spain :
                      The following public institutions:
                      (aa) Coraisaria del Seguro Obligatorio de Viajeros,
                      (bb) Consorcio de Compensacion de Seguros,
                      (cc) Fondo Nacional de Garantia de Riesgos de la Circulation;
                  (d) In F r a n c e :
                      The following institutions:
                      (aa) Caisse departementale des incendies des Ardennes,
                      (bb) Caisse departementale des incendies de la Cote-d'Or,
                      (cc) Caisse departementale des incendies de la Marne,
                      (dd) Caisse departementale des incendies de la Meuse,
                      (ee) Caisse departementale des incendies de la Somme;
                  (e) In I r e l a n d :
                      Voluntary Health Insurance Board;
                 (f) In I t a l y :
                      La Cassa di Previdenza per l'assicurazione degli sportivi (Sportass);
                 (g) In the U n i t e d K i n g d o m :
                      The Crown Agents.
                                                                 ANNEX III
                                                      ACCEPTABLE LEGAL FORMS
          An undertaking whose head office is situated in the territory of a Contracting Party shall adopt one of the legal
          forms shown below.
          The Contracting Parties may also set up, where appropriate, undertakings under any form governed by public
          law provided that such institutions have as their object insurance transactions under conditions equivalent to
          those of undertakings governed by private law.
          A. In Switzerland:
             — Aktiengesellschaft/societe anonyme/societa per azioni,
             — Genossenschaft/cooperative/cooperativa.
          B. In the Community:
              1. In Belgium:
                 — naamloze vennootschap/societe anonyme,
                 — vennootschap bij wijze van geldschieting op aandelen/societe en commandite par actions,
 ---pagebreak--- No C 53/20                          Official J o u r n a l of the E u r o p e a n C o m m u n i t i e s 5. 3 . 90
               — onderlinge verzekeringsmaatschappij/association d'assurance mutuelle,
               — cooperatieve vennootschap/societe cooperative.
           2. In Denmark:
               — aktieselskaber,
               — gensidige selskaber.
           3. In Germany:
               — Aktiengesellschaft,
               — Versicherungsverein auf Gegenseitigkeit,
               — Offentlich-rechtliches Wettbewerbs-Versicherungsunternehmen.
           4. In France:
               — societe anonyme,
               — societe a forme mutuelle,
               — mutuelle,
               — union de mutuelles.
           5. In Spain:
               — sociedad anonima,
               — sociedad mutua,
               — sociedad cooperativa.
           6. In Greece:
               — avcbvouoc, ETaipeia,
               — aXkr^acs^akioxiKoq      auvETaipiauoi;.
           7. In Ireland:
               — incorporated companies limited by shares or by guarantee or unlimited.
           8. In Italy:
               — societa per azioni,
               — societa cooperativa,
               — mutua di assicurazione.
           9. In    Luxembourg:
               — societe anonyme,
               — societe en commandite par actions,
               — association d'assurances mutuelles,
               — societe cooperative.
           10. In the  Netherlands:
               — naamloze vennootschap,
               — onderlinge waarborgmaatschappij.
           11. In Portugal:
               — sociedade anonima de responsabilidade limitada,
               — mutua de seguros.
           12. In the United   Kingdom:
               — incorporated companies limited by shares or by guarantees or unlimited,
               — societies registered under the Industrial and Provident Societies Acts,
               — societies registered under the Friendly Societies Act,
               — the association of underwriters known as Lloyd's.
 ---pagebreak--- 5. 3. 90                                Official Journal of the European Communities                                          No C 53/21
                                                            ANNEX      IV
                  PARTICULAR PROVISIONS FOR CERTAIN MEMBER STATES OF THE COMUNITY
         By way of derogation from the provisions of this Agreement, the following special provisions shall apply in
         certain Member States of the Community:
         1. In    Denmark:
             re Article 15:
             Denmark may retain in force its legislation restricting the free disposal of assets built up by insurance
             undertakings to cover pensions payable under compulsory insurance against industrial accidents.
         2. In Germany:
             — re Article 8 (2):
                 Germany may maintain the provision prohibiting the simultaneous undertaking in its territory of health
                 insurance with other classes.
             — re Article 15:
                 Germany may maintain, with respect to health insurance within the meaning of Article 2 (3) of Protocol
                 1, the restrictions imposed on the free disposal of assets in so far as the free disposal of assets covering
                 mathematical reserves is subject to the agreement of a 'Treuhander'.
         3. In    Luxembourg:
             — re Article 20 (1) and (3):
             Luxembourg may retain the system of guarantees for technical reserves existing at the time of entry into
             force of this Agreement.
         4. In the United      Kingdom:
             — re Article 10 (1) (c):
                 With regard to the association of underwriters known as Lloyd's, submission of the balance sheet and
                 the profit and loss account shall be replaced by the compulsory presentation of annual trading accounts
                 covering the insurance operations, and accompanied by an affidavit certifying that auditors' certificates
                 have been supplied in respect of each insurer and showing that the liabilities incurred as a result of those
                 operations are wholly covered by the assets. These documents must allow the supervisory authorities to
                 form a comparable view of the state of solvency of the Association.
             — re Article 10 (1) (d):
                 With regard to the association of underwriters known as Lloyd's, in the event of any litigation in the host
                 country resulting from underwritten commitments, insured persons must not be less favourably treated
                 than if the litigation had been brought against a business of a more conventional type. The authorized
                 agent must, therefore, possess sufficient powers to enable proceedings to be instituted against him and
                 must in that capacity be able to bind the Lloyd's underwriters concerned.
 ---pagebreak--- No C 53/22                               Official Journal of the European Communities                                          5. 3. 90
                                                                 ANNEX     V
            METHODS OF CALCULATING THE EQUALIZATION RESERVE FOR THE CREDIT INSURANCE
             CLASS AND CONDITIONS GOVERNING EXEMPTION FROM THE OBLIGATION T O SET UP
                                                            SUCH A RESERVE
           A. Methods
           Method 1
           1.1.  In respect of the risks listed under class 14 in part A of Annex I (credit insurance), the undertaking shall
                 set up an equalization reserve to which shall be charged any technical deficit arising in that class for a
                 financial year.
           1.2.  Such reserve shall in each financial year receive 75 % of any technical surplus arising on credit insurance
                 business, subject to a limit of 12 % of the net premiums or contributions until the reserve has reached
                 150 % of the highest annual amount of net premiums or contributions received during the previous five
                 financial years.
           Method 2
           2.1.  In respect of the risks listed under class 14 in part A of Annex I (credit insurance), the undertaking shall
                 set up an equalization reserve to which shall be charged any technical deficit arising in that class for a
                 financial year.
           2.2.  The minimum amount of the equalization reserve shall be 134 % of the average of the premiums or
                 contributions received annually during the previous five financial years after subtraction of the cessions
                 and addition of the reinsurance acceptances.
           2.3.  Such reserve shall in each of the successive financial years receive 75 % of any technical surplus arising in
                 that class until the reserve is at least equal to the minimum calculated in accordance with point 2.2 of this
                 Annex.
           2.4.  The Contracting Parties may lay down special rules for the calculation of the amount of the reserve and/
                 or the amount of the annual levy in excess of the minimum amounts laid down in points 2.2 and 2.3 of
                 this Annex.
           Method 3
           3.1.  An equalization reserve shall be formed for class 14 in part A of Annex I (credit insurance) for the
                 purpose of offsetting any above-average claims ratio for a financial year in that class of insurance.
           3.2.  The equalization reserve shall be calculated on the basis of the method set out below.
                 All calculations shall relate to income and expenditure for the insurer's own account.
                 An amount in respect of any claims shortfall for each financial year shall be placed to the equalization
                 reserve until it has reached, or is restored to, the required amount.
                 There shall be deemed to be a claims shortfall if the claims ratio for a financial year is lower than the
                 average claims ratio for the reference period. The amount in respect of the claims shortfall shall be
                 arrived at by multiplying the difference between the two ratios by the earned premiums for the financial
                 year.
                 The required amount shall be equal to six times the standard deviation of the claims ratios in the
                 reference period from the average claims ratio, multiplied by the earned premiums for the financial year.
                 Where claims for any financial year are in excess, an amount in respect thereof shall be taken from the
                 equalization reserve. Claims shall be deemed to be in excess if the claims ratio for the financial year is
                 higher than the average claims ratio. The amount in respect of the excess claims shall be arrived at by
                 multiplying the difference between the two ratios by the earned premiums for the financial year.
                 Irrespective of claims experience, 3,5 % of the required amount of the equalization reserve shall be first
                 placed to that reserve each financial year until its required amount has been reached or restored.
 ---pagebreak--- 5. 3 . 90                               Official J o u r n a l of the E u r o p e a n C o m m u n i t i e s                    No C 53/23
                  The length of the reference period shall be not less than 15 years and not more than 30 years. No
                  equalization reserve need be formed if no underwriting loss has been noted during the reference period.
                  The required amount of the equalization reserve and the amount to be taken from it may be reduced if
                  the average claims ratio for the reference period in conjunction with the expenses ratio show that the
                  premiums include a safety margin.
          Method 4
          4.1.    An equalization reserve shall be formed for class 14 in part A of Annex I (credit insurance) for the
                  purpose of offsetting any above-average claims ratio for a financial year in that class of insurance.
          4.2.    The equalization reserve shall be calculated on the basis of the method set out below.
                  All calculations shall relate to income and expenditure for the insurer's own account.
                  An amount in respect of any claims shortfall for each financial year shall be placed to the equalization
                  reserve until it has reached the maximum required amount.
                  There shall be deemed to be a claims shortfall if the claims ratio for a financial year is lower than the
                  average claims ratio for the reference period. The amount in respect of the claims shortfall shall be
                  arrived at by multiplying the difference between the two ratios by the earned premiums for the financial
                  year.
                  The maximum required amount shall be equal to six times the standard deviation of the claims ratio in
                  the reference period from the average claims ratio, multiplied by the earned premiums for the financial
                  year.
                  Where claims for any financial year are in excess, an amount in respect thereof shall be taken from the
                  equalization reserve until it has reached the minimum required amount. Claims shall be deemed to be in
                  excess if the claims ratio for the financial year is higher than the average claims ratio. The amount in
                  respect of the excess claims shall be arrived at by multiplying the difference between the two ratios by the
                  earned premiums for the financial year.
                  The minimum required amount shall be equal to three times the standard deviation of the claims ratio in
                  the reference period from the average claims ratio multiplied by the earned premiums for the financial
                  year.
                  The length of the reference period shall be not less than 15 years and not more than 30 years. No
                  equalization reserve need be formed if no underwriting loss has been noted during the reference period.
                  Both required amounts of the equalization reserve and the amount to be placed to it or the amount to be
                  taken from it may be reduced if the average claims ratio for the reference period in conjunction with the
                  expenses ratio show that the premiums include a safety margin and that safety margin is more than one-
                  and-a-half times the standard deviation of the claims ratio in the reference period. In such a case the
                  amounts in question shall be multiplied by the quotient of one-and-a-half times the standard deviation
                  and the safety margin.
          B. Exemption
          Each Contracting Party may exempt head offices, agencies or branches from the obligation to set up an
          equalization reserve for credit insurance business where the premiums or contributions receivable in respect of
          credit insurance are less than 4 % of the total premiums or contributions receivable by them or less than ECU
          2 500 000.
          The relationship between the ecu and the Swiss franc and the procedures necessary for defining that relationship
          for the purposes of this Annex are laid down in Protocol 3.
 ---pagebreak--- ^ o C ^ ^                                 C^fficial]ournal of the European Communities                                           ^.^.^0
                                                                 P^C^PC^^^Li
                                                                solvency margin
                                                  fOefinition of the solvency margin
          Lhe solvency margin s h a l l c o r r e s p o n d t o t h e assets of theundertaking, free of all foreseeable
          liabilities, less any intangible items. In particular the following shall be considered^
          — the paid-up share capital or, in the case o f a m u t u a l concern, the effective initial fund,
          — onehalf of the share capital or the initial fund which is not yet paid up,once the paid-up part
              r e a c h e s ^ ^ o of this capital or fund,
          — reserves^statutory reserves and free reserves^not corresponding to underwriting liabilities,
          — any carryforward of profits,
          — in the case ofamutual ormutuaPtype association with variable contributions, any claim which
              it has against its members by way ofacall for supplementary contribution, within the financial
              year,uptoonehalfofthedifference between the maximum contributions and thecontributions
              actually called in, and subject to an overriding limit of ^ O ^ o f the margin,
          — at the request of, and upon proof being shown by the undertaking, and with the agreement of
              the concerned supervisory authorities of the Contracting parties in whose territory the
              undertakingcarnes on its business, anyhiddenreservesresultingfromunderDestimation of
              assets or over^estimationofliabihties in the balance sheet, in so far as such hidden reserves are
              not of an exceptional nature.
          C^ver^estimationoftechmcal reserves shall be determined in relation to their amount calculated by
          the undertaking in conformity with national rules,however,an amount equivalent t o ^ ^ o f the
          difference between the amount of the reserve for outstanding risks calculated a t a f l a t rate by the
          undertaking by application ofaminimum percentage in relation to premiums and the amount that
          would have been obtained by calculating the reserve contract by contractwhere the national lawm
          question gives a n o p t i o n b e t w e e n t h e t w o m e t h o d s , c a n b e taken into account m t h e solvency
          margin up to ^ 0 ^ .
                                                                    Ar^A^^
               relationship between the solvency margin and the amount of premiums or the burden
                                                                    of claims
          P Lhe solvency margin shall be determined on the basis either ofthe annual amount ofpremiums
          or contributions, or of the average burden of claims for the past three financial years. In the case,
          however, of undertakings which essentially underwrite only one or more of the risks of credit,
          storm, hail and frost, the last seven years shall be taken as the period of reference for the average
          burden of claims.
          ^.. ^ub^ect to the provisions of Article^of this protocol, the amount of the solvency margin shall
          be equal to the higher of the following two results^
          — first result ^premium basis^
              — the premiums or contributions ^inclusive of charges ancillary to premiums or contributions^
                   duemrespect of all direct business in the last financial year for all financial years,shall be
                   aggregated,
              — to this aggregate there shall be added the amount ofpremiums accepted for all reinsurance in
                   the last financial year,
 ---pagebreak--- 5. 3. 90                            Official Journal of the European Communities                                   No C 53/25
            — from this sum there shall then be deducted the total amount of premiums or contributions
                cancelled in the last financial year, as well as the total amount of taxes and levies pertaining
                to the premiums or contributions entering into the aggregate.
            The amount so obtained shall be divided into two portions, the first portion extending up to
            ECU 10 million, the second comprising the excess; 18 and 16 % of these portions respectively
            shall be calculated and added together.
            The first result shall be obtained by multiplying the sum so calculated by the ratio existing in
            respect of the last financial year between the amount of claims remaining to be borne by the
            undertaking after deduction of transfers for reinsurance and the gross amount of claims; this
            ratio may in no case be less than 50 % ;
         — second result (claims basis):
            — the amounts of claims paid in respect of direct business (without any deduction of claims
                borne by reinsurers and retrocessionnaires) in the periods specified in Article 2 (1) of this
                Protocol shall be aggregated,
            — to this aggregate there shall be added the amount of claims paid in respect of reinsurances or
                retrocessions accepted during the same periods,
            — to this sum there shall be added the amount of provisions or reserves for outstanding claims
                established at the end of the last financial year both for direct business and for reinsurance
                acceptances,
            — from this sum there shall be deducted the amount of recoveries effected during the periods
                specified in Article 2 (1) of this Protocol,
            — from the sum then remaining, there shall be deducted the amount of provisions or reserves
                for outstanding claims established at the commencement of the second financial year
                preceding the last financial year for which there are accounts, both for direct business and for
                reinsurance acceptances.
            One-third, or one-seventh, of the amount so obtained, according to the period of reference
            established in Article 2 (1) of this Protocol, shall be divided into two portions, the first extending
            up to ECU 7 million, and the second comprising the excess; 26 and 23 % of these portions
            respectively shall be calculated and added together.
            The second result shall be obtained by multiplying the sum so obtained by the ratio existing in
            respect of the last financial year between the amount of claims remaining to be borne by the
            business after transfers for reinsurance and the gross amount of claims; this ratio may in no case
            be less than 50 %.
         3. The fractions applicable to the portions referred to in Article 2 (2) of this Protocol shall each be
         reduced to a third in the case of health insurance practised on a similar technical basis to that of life
         assurance, if:
         — the premiums paid are calculated on the basis of sickness tables according to the mathematical
             method applied in insurance,
         — a reserve is set up for increasing age,
         — an additional premium is collected in order to set up a safety margin of an appropriate amount,
         — the insurer may only cancel the contract before the end of the third year of insurance at the
             latest,
         — the contract provides for the possibility of increasing premiums or reducing payments even for
             current contracts.
         4. In the case of the association of underwriters known as Lloyd's, the calculation of the first
         result in respect of premiums, referred to in Article 2 (2) of this Protocol, shall be made on the basis
         of net premiums, which shall be multiplied by a flat-rate percentage fixed annually by the
 ---pagebreak--- No C 53/26                            Official Journal of the European Communities                                 5. 3. 90
           supervisory authority of the Contracting Party in whose territory the head office of the undertaking
           is situated. This flat-rate percentage must be calculated on the basis of the most recent statistical
           data on commission paid.
           The details, together with the relevant calculations, shall be sent to the supervisory authority of
           Switzerland if the association of underwriters known as Lloyd's is established there.
           5. In the case of the risks listed under class 18 in part A of Annex I, the amount of claims paid used
           to calculate the second result (claims basis) shall be the costs borne by the undertaking in respect of
           assistance given. Such costs shall be calculated in accordance with the provisions of the Contracting
           Party in whose territory the head office of the undertaking is situated.
                                                           Article 3
                                                       Guarantee fund
           1.    One-third of the solvency margin shall constitute the guarantee fund.
           2.    The guarantee fund may not, however, be less than:
           — ECU 1 400 000 where all or some of the risks included in the class listed in part A of Annex I
                under 14 are covered. This provision shall apply to every undertaking for which the annual
                amount of premiums or contributions due in this class for each of the last three financial years
                exceeded ECU 2 500 000 or 4 % of the total amount of premiums or contributions receivable by
                the undertaking concerned,
           — ECU 400 000 where all or some of the risks included in one of the classes listed in part A of
                Annex I under 10, 11, 12, 13 and 15 and, in so far as the first indent does not apply, 14, are
                covered,
           — ECU 300 000 where all or some of the risks included in one of the classes listed in part A of
                Annex I under 1, 2, 3, 4, 5, 6, 7, 8, 16 and 18 are covered,
           — ECU 200 000 where all or some of the risks included in one of the classes listed in part A of
                Annex I under 9 and 17 are covered.
           3. If the business carried on by the undertaking covers several classes or several risks, only that
           class or risk for which the highest amount is required shall be taken into account.
           4. Each Contracting Party may provide for a one-fourth reduction of the minimum guarantee
            fund in the case of mutual associations and mutual-type associations.
           5. Where an undertaking has, in accordance with the first indent of Article 3 (2) of this Protocol,
            to increase the guarantee fund to ECU 1 400 000, the Contracting Party in question shall allow the
            undertaking:
           — a period of three years in which to increase the fund to ECU 1 000 000,
           — a period of five years in which to increase the fund to ECU 1 200 000,
           — a period of seven years in which to increase the fund to ECU 1 400 000.
            These periods shall start to run on the day on which the conditions set out in the first indent of
            Article 3 (2) of this Protocol are met.
                                                           Article 4
                                     Relationship between the ecu and the Swiss franc
            The relationship between the ecu and the Swiss franc and the procedures necessary for defining that
            relationship for the purposes of this Protocol are laid down in Protocol 3.
 ---pagebreak--- 5,3,90                                  COfficialjournal of the European Communities                                    ^oC53B^
                                                                 P^C^PC^^C^L^
                                                             scheme of operations
                                                                    content
       Lheschemeofoperationsofthe agency or branch shall contain the following particulars orproofs
       concerning^
       ^a^ the nature of the risks which the undertaking proposes to covers
       ^ t h e general and special policy conditions which it proposes to use^
       ^c^ the scales of premiums which the undertaking proposes to apply for each category ofbusiness^
       ^d^the guiding principles as to reinsurances
       ^ t h e state of the solvency margin of the undertakings referred to in l^rotocoll^
       ^ e s t i m a t e s relating to the expenses of installing the administrative services and the organization
            for securing business^the financial resources intended to coverthem^and^ where the risks to be
            coveredare listed under class l^inpartAofAnnexlgheresourcesavailable to the undertaking
            for providing the promised assistances
       and^ in additions for the first three financial years^
       ^ e s t i m a t e s relatingto expenses of managements
       ^ e s t i m a t e s relating to premiums or contributions and to claims in respect ofthe new business^
       d^ the forecast balance sheet for the agency or branch,
                                                                    Arr^^^
                                                                   exceptions
       1, The particulars referred to i n ^ a n d ^ o f A r t i c l e l o f t h i s protocol shall not be required with
       regard to the following d ^ ^ ^ i ^ ^
       ^a^ risks listed under classes 4^ 5^ 6 ^ ^ 1 1 and 1^ in p a r t A o f A n n e x e
       ^b^risks listed under classes 14 and 15 in p a r t A o f A n n e x ^ w h e r e the policy-holder is engaged
            professionally in anindustrial or commercial activity o r i n o n e o f t h e liberal professions^ and the
            risks relate to such activity^
       ^c^ risks listed under classes 8^ 9^ 13 and 16 in p a r t A o f A n n e x l i n so far as the policy-holder
            exceeds the limits of at least two of the following three criteria^
            first stage^until 31 I0ecemberl99^^
            — balance-sheet totah^C^C^1^^4million^
            — net t u r n o v e r ^ C U ^4 millions
            — average number of employees during the financial year^ 500^
            second s t a g e ^ f r o m l ] a n u a r y ! 9 9 3 ^
            — balance-sheet totah^CC^ 6 ^ millions
            — net t u r n o v e r ^ C 0 1 ^ 8 millions
            — average number of employees during the financial y e a r ^ 5 0 .
 ---pagebreak--- No C 53/28                               Official Journal of the European Communities                                      5. 3. 90
               If the policy-holder belongs to a group of undertakings for which consolidated accounts are
               drawn up in accordance with the law in force in the Contracting Party to whose jurisdiction the
               group is subject, the criteria mentioned above shall be applied on the basis of the consolidated
               accounts.
               Each Contracting Party may add to the category mentioned under (c) risks insured by
               professional associations, joint ventures or temporary groupings.
           2. However, in Switzerland the particulars referred to in (b) and (c) of Article 1 of this Protocol
           may be required with regard to the risks listed under class 12 in part A of Annex I where the vessels
           involved are lake or river vessels.
                                                          PROTOCOL 3
                                       Relationship between the ecu and the Swiss franc
                                                              Article 1
                                                                Ecu
           For the purposes of this Agreement, 'ecu' means the ecu as defined by the competent Community
           authorities.
                                                             Article 2
                                     Relationship between national currencies and the ecu
           1. In so far as amounts expressed in ecus in this Agreement have to be converted into national
           currencies to enable the supervisory authorities to apply the Agreement's provisions directly, the
           conversion shall be effected in accordance with the provisions of Article 2 (2) and (3) of this
           Protocol.
           2. With regard to the conversion of amounts expressed in ecus into the national currencies of the
           Member States of the Community, the rules laid down by the competent Community authorities
           shall apply.
           3. With regard to the equivalent in Swiss francs of amounts expressed in ecus, the exchange value
           of one ecu shall, for the purposes of this Agreement, be 1,83 (*) Swiss francs.
                                                             Article 3
                            Alteration of the relationship between the ecu and the Swiss franc
           1. The relationship between the ecu and the Swiss franc referred to in Article 2 (3) shall be
           reviewed annually as follows: where the exchange value of the ecu in terms of Swiss francs as fixed
           by the Swiss National Bank for the last working day in October fluctuates by more than 10 % on
           either side of the value used for the purposes of this Agreement, that value shall be adjusted
           accordingly with effect from 1 January of the following year.
           2. The Joint Committee referred to in Article 37 may make such other adjustments as may be
           necessary.
           (x) This figure is given for guidance only. The ecu/Swiss franc conversion rate will be fixed on the day before
               that on which the Agreement is signed.
 ---pagebreak--- 5. 3. 90                            Official Journal of the European Communities                                   No C 53/29
                                                      PROTOCOL 4
                    Agencies and branches of undertakings whose head office is situated outside
                                    the territories to which this Agreement applies
                                                          Article 1
                                              Conditions for authorization
         Each Contracting Party may grant to an undertaking whose head office is situated outside the
         territories to which this Agreement applies under Article 41 thereof, authorization to open an
         agency or branch in its territory, if the applicant undertaking fulfils at least the following
         conditions:
         (a) it is entitled to undertake insurance business under its national law;
         (b) it establishes an agency or branch in the territory of the Contracting Party in question;
         (c) it undertakes to establish at the place of management of the agency or branch accounts specific
             to the business which it undertakes there, and to keep there all the records relating to the
             business transacted;
         (d) it designates an authorized agent, to be approved by the supervisory authority;
         (e) it possesses in the country in which it carries on its business assets of an amount equal to at least
             one-half of the minimum amount prescribed in Article 3 (2) of Protocol 1, in respect of the
             guarantee fund, and deposits one-quarter of the minimum amount as security;
         (f) it undertakes to keep a solvency margin in accordance with Article 3 of this Protocol;
         (g) it submits a scheme of operations in accordance with the provisions of Article 9 (1) (c) of the
             Agreement and Protocol 2. Each Contracting Party may, if the legal provisions in force therein
             so permit, require an undertaking which has been in existence for fewer than three financial
             years to supply the balance sheet and profit and loss account which must accompany the scheme
             of operations only in respect of the financial years which have closed.
                                                          Article 2
                                                    Technical reserves
         Under this Protocol, each Contracting Party shall apply to agencies or branches set up in its
         territory rules regarding technical reserves which may not be more favourable than those provided
         for in Articles 19,20 and 21. By way of derogation from the second sentence of Article 20 (1) it shall
         require assets representing technical reserves to be localized in the territory for which the
         supervisory authority of the Contracting Party concerned is responsible.
                                                          Article 3
                                                     Solvency margin
          1. Under this Protocol, each Contracting Party shall require for agencies or branches established
          in its territory a solvency margin consisting of assets free of all foreseeable liabilities, less any
          intangible items. The solvency margin shall be calculated in accordance with Article 2 (2) and (3) of
          Protocol 1. However, for the purpose of calculating this margin, account shall be taken only of the
          premiums or contributions and claims pertaining to the business effected by the agency or branch
          concerned.
 ---pagebreak--- No C 53/30                          Official Journal of the European Communities                              5. 3. 90
           2. One-third of the solvency margin shall constitute the guarantee fund. The guarantee fund may
           not be less than one-half of the minimum required under Article 3 (2) of Protocol 1. The initial
           security lodged in accordance with subparagraph (e) of Article 1 of this Protocol shall be counted
           towards such guarantee fund.
           3. The assets representing the solvency margin shall be localized in the territory for which the
           supervisory authority of the Contracting Party concerned is responsible.
           4. The Community may allow these rules to be relaxed in the case of undertakings with agencies
           or branches in various Member States in order to facilitate their supervision.
                                                        Article 4
                                   Verification and restoration of financial situation
           The provisions of Articles 17 (3) and 18 shall apply mutatis mutandis in relation to agencies and
           branches of undertakings to which this Protocol applies.
                                                        Article 5
                                            Agreements with third countries
           Each Contracting Party may, by means of agreements concluded with one or more third countries,
           agree to the application of provisions different from those provided for in this Protocol on
           condition that its insured persons are adequately protected under conditions of reciprocity.
 ---pagebreak--- 5. 3. 90                            Official Journal of the European Communities                               No C 53/31
                                           EXCHANGE OF LETTERS No 1
                                             Principle of non-discrimination
                Delegation of the
         Commission of the European
                   Communities
                                                                                        Brussels, 26 July 1989
         Sir,
         With reference to the Agreement between the Community and Switzerland, initialled today, I have
         the honour to confirm that the obligation of non-discrimination referred to in Article 5 thereof
         exclusively concerns the taking-up and pursuit of the activity of direct insurance in the territory
         falling under the jurisdiction of the supervisory authority which grants authorization and also
         applies to the Member States of the Community in the exercise of their power to legislate in the
         areas covered by the said Agreement.
         I would ask you to take note of this communication, and to accept, Sir, the assurance of my high
         consideration.
                                                                             Geoffrey FITCHEW
                                                                           Head of the Delegation
                                                                    of the Commission of the European
                                                                                Communities
         Franz Blankart, Esq.
         State Secretary
         Head of the Swiss Delegation
         Berne
         Swiss Delegation
                                                                                          Berne, 16 July 1989
         Sir,
         I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
              'With reference to the Agreement between the Community and Switzerland, initialled today, I
              have the honour to confirm that the obligation of non-discrimination referred to in Article 5
              thereof exclusively concerns the taking-up and pursuit of the activity of direct insurance in the
              territory falling under the jurisdiction of the supervisory authority which grants authorization
              and also applies to the Member States of the Community in the exercise of their power to
              legislate in the areas covered by the said Agreement.'
          I have taken note of this communication, and in turn ask you to accept, Sir, the assurance of my
          high consideration.
                                                                              Franz BLANKART
                                                                        Head of the Swiss Delegation
          Geoffrey Fitchew, Esq.
          Director General
          Head of the Delegation of the Commission
          of the European Communities
          Brussels
 ---pagebreak--- No C 53/32                            Official Journal of the European Communities                             5. 3. 90
                                             EXCHANGE OF LETTERS No 2
                                                  Scope of authorization
                   Delegation of the
           Commission of the European
                     Communities
                                                                                        Brussels, 26 July 1989
           Sir,
           With reference to the Agreement between the Community and Switzerland, initialled today, I have
           the honour to remind you of our understanding that Article 8(1) does not affect the provisions in
           force in each Contracting Party concerning the possibility for an insurance undertaking to cover
           risks situated outside the territory for which the supervisory authority which granted it
           authorization is responsible.
           I would ask you to kindly confirm the above, and to accept, Sir, the assurance of my high
           consideration.
                                                                             Geoffrey FITCHEW
                                                              Head of the Delegation of the Commission      of
                                                                        the European Communities
          Franz Blankart, Esq.
          State Secretary
          Head of the Swiss Delegation
          Berne
          Swiss Delegation
                                                                                          Berne, 26 July 1989
          Sir,
          I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
                'With reference to the Agreement between the Community and Switzerland, initialled today, I
                have the honour to remind you of our understanding that Article 8(1) does not affect the
                provisions in force in each Contracting Party concerning the possibility for an insurance
                undertaking to cover risks situated outside the territory for which the supervisory authority
                which granted it authorization is responsible.'
          I have taken note of this communication, and in turn ask you to accept, Sir, the assurance of my
          high consideration.
                                                                             Franz BLANKART
                                                                       Head of the Swiss Delegation
          Geoffrey Fitchew, Esq.
          Director General
          Head of the Delegation of the Commission
          of the European Communities
          Brussels
 ---pagebreak--- 5. 3. 90                             Official Journal of the European Communities                                No C 53/33
                                            EXCHANGE OF LETTERS No 3
                                                    Authorized agent
         Swiss Delegation
                                                                                          Berne, 25 June 1989
         Sir,
         With reference to the Agreement between Switzerland and the Community, initialled today, I have
         the honour to state that it does not preclude the authorized agent referred to in Articles 10 (1) (d)
         and 11 (4) thereof and in subparagraph (d) of Article 1 of Protocol No 4 being required to assume
         effective management of the agency or branch in respect of all the business activities the latter
         intends carrying on in the territory for which the supervisory authority from which authorization is
         sought is responsible.
         I would ask you to kindly confirm the above, and to accept, Sir, the assurance of my high
         consideration.
                                                                              Franz BLANKART
                                                                      Head of the Swiss Delegation
         Gerard Imbert, Esq. Director
         Head of the Delegation of the Commission
         of the European Communities
         Brussels
                 Delegation of the
         Commission of the European
                   Communities
                                                                                        Brussels, 25 June 1989
         Sir,
         I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
              'With reference to the Agreement between Switzerland and the Community, initialled today, I
              have the honour to state that it does not preclude the authorized agent referred to in Articles 10
              (1) (d) and 11 (4) thereof and in subparagraph (d) of Article lof Protocol No 4 being required to
              assume effective management of the agency or branch in respect of all the business activities the
              latter intends carrying on in the territory for which the supervisory authority from which
              authorization is sought is responsible.'
         I hereby confirm the above, and in turn ask you to accept, Sir, the assurance of my high
         consideration.
                                                                               Gerard IMBERT
                                                              Head of the Delegation of the Commission        of
                                                                        the European Communities
         Franz Blankart, Esq. Ambassador
         Head of the Swiss Delegation
         Berne
 ---pagebreak--- No C 53/34                            Official Journal of the European Communities                                 5. 3. 90
                                             EXCHANGE OF LETTERS No 4
                                  Assignment to the Swiss Securities Fund of immovable
                                    property directly owned by insurance undertakings
           Swiss Delegation
                                                                                           Berne, 25 June 1989
           Sir,
           With reference to the Agreement between Switzerland and the Community, initialled today, I have
           the honour to inform you that Switzerland reserves the right, with regard to the assignment to the
           securities fund of immovable property directly owned by insurance undertakings, to have the said
           immovable property registered in the securities fund register maintained by the undertaking and to
           have included in the land register a note relating thereto restricting the right to dispose freely of
           such property which, under Swiss law, does not constitute registration of a mortgage.
           I would ask you to confirm that you are also of the opinion that such a procedure is not contrary to
           Articles 11 (2) and 20 (3) of the said Agreement.
           Please accept, Sir, the assurance of my high consideration.
                                                                               Franz BLANKART
                                                                        Head of the Swiss Delegation
           Gerard Imbert, Esq. Director
           Head of the Delegation of the Commission
           of the European Communities
           Brussels
                   Delegation of the
           Commission of the European
                     Communities
                                                                                         Brussels, 25 June 1989
           Sir,
           I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
                'With reference to the Agreement between Switzerland and the Community, initialled today, I
                have the honour to inform you that Switzerland reserves the right, with regard to the
                assignment to the securities fund of immovable property directly owned by insurance
                undertakings, to have the said immovable property registered in the securities fund register
                maintained by the undertaking and to have included in the land register a note relating thereto
                restricting the right to dispose freely of such property which, under Swiss law, does not
                constitute registration of a mortgage.'
           I hereby confirm that I am also of the opinion that such a procedure is not contrary to Articles 11 (2)
           and 20 (3) of the said Agreement.
           Please accept, Sir, the assurance of my high consideration.
                                                                                Gerard IMBERT
                                                                 Head of the Delegation of the Commission
                                                                        of the European Communities
           Franz Blankart, Esq. Ambassador
           Head of the Swiss Delegation
           Berne
 ---pagebreak--- 5. 3. 90                             Official Journal of the European Communities                               No C 53/35
                                            EXCHANGE OF LETTERS No 5
                                             Principles governing investment
         Swiss Delegation
                                                                                           Berne, 25 June 1989
         Sir,
         With reference to the Agreement between Switzerland and the Community, initialled today, I have
         the honour to state with regard to the assets referred to in Article 15 that the said Agreement does
         not preclude the supervisory authority from taking action in specific cases where the choice of
         assets is likely to place the financial security of an undertaking in serious jeopardy or diminish its
         degree of liquidity.
         I would ask you to kindly confirm the above, and to accept, Sir, the assurance of my high
         consideration.
                                                                              Franz BLANKART
                                                                       Head of the Swiss Delegation
         Gerard Imbert, Esq. Director
         Head of the Delegation of the Commission
         of the European Communities
         Brussels
                 Delegation of the
         Commission of the European
                   Communities
                                                                                        Brussels, 25 June 1989
         Sir,
         I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
              'With reference to the Agreement between Switzerland and the Community, initialled today, I
              have the honour to state with regard to the assets referred to in Article 15 that the said
              Agreement does not preclude the supervisory authority from taking action in specific cases
              where the choice of assets is likely to place the financial security of an undertaking in serious
              jeopardy or diminish its degree of liquidity.'
         I hereby confirm the above, and in turn ask you to accept, Sir, the assurance of my high
         consideration.
                                                                               Gerard IMBERT
                                                                Head of the Delegation of the Commission
                                                                       of the European Communities
         Franz Blankart, Esq. Ambassador
         Head of the Swiss Delegation
         Berne
 ---pagebreak--- No C 53/36                                Official Journal of the European Communities                                         5. 3. 90
                                                   EXCHANGE OF LETTERS No 6
                                                     Swiss list of classes of insurance
           Swiss Delegation
                                                                                                           Berne, 25 June 1989
           Sir,
           With reference to the Agreement between Switzerland and the Community, initialled today, I have
           the honour to inform you that Switzerland will continue to apply to head offices, agencies and
           branches established in its territory its 'List of classes of insurance' for the purposes of submission
           of accounts and statistics. This will also be the case with regard to the report of the Federal Office
           for Private Insurance on 'Private insurance undertakings in Switzerland'. However, the
           'Classification of risks according to classes of insurance', set out in part A of Annex I to the said
           Agreement, will apply for the purposes of the specification of classes in applications for
           authorization and assessment of the need to approve the general and special conditions of insurance
           policies and tariffs.
           This does not preclude examination by Switzerland, at a later date, of the possibility of applying the
           abovementioned 'Classification' in its entirety. A decision to that effect would be notified to the
           Community through diplomatic channels.
           It is agreed that the scope of the 'List of classes of insurance' is the same as that of the 'Classification
           of risks according to classes of insurance'. Comparability as between the two types of classification
           is as follows:
                               Swiss list of classes                                 Classes of insurance according
                                  of insurance                                       to the classification in Annex I
             1. Accident                                                 A. 1
             2. Liability                                                A. 10, 11, 12, 13
             3. Fire and natural forces                                  A. 8
            4. Transport                                                 A. 4, 6 , 7
             5. Vehicles                                                 A. 3. 5
             6. Hail                                                     A. 9
            7. Animals                                                   A. 9
             8. Theft                                                    A. 9
             9. Plate glass                                              A. 9
           10. Damage by water                                           A. 9
           11. Machinery                                                 A. 9
           12. Jewellery                                                 A. 9
           13. Suretyship                                                A. 15
           14. Credit                                                    A. 14
           15. Legal defence                                             A. 17
           16. Health                                                    A. 2
           17. Rain                                                      A. 16, 18
           18. Special policies                                          A. 16, 18
           I would ask you to take note of this communication, and to accept, Sir, the assurance of my high
           consideration.
                                                                                          Franz BLANKART
                                                                                 Head of the Swiss Delegation
           Gerard Imbert, Esq. Director
           Head of the Delegation of the Commission
           of the European Communities
           Brussels
 ---pagebreak--- 5. 3. 90                                Official Journal of the European Communities                                   No C 53/37
                 Delegation of the
         Commission of the European
                    Communities
                                                                                                Brussels, 25 June 1989
         Sir,
         I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
              'With reference to the Agreement between Switzerland and the Community, initialled today, I
              have the honour to inform you that Switzerland will continue to apply to head offices, agencies
              and branches established in its territory its 'List of classes of insurance' for the purposes of
              submission of accounts and statistics. This will also be the case with regard to the report of the
              Federal Office for Private Insurance on 'Private insurance undertakings in Switzerland'.
              However, the 'Classification of risks according to classes of insurance', set out in part A of
              Annex I to the said Agreement, will apply for the purposes of the specification of classes in
              applications for authorization and assessment of the need to approve the general and special
              conditions of insurance policies and tariffs.
              This does not preclude examination by Switzerland, at a later date, of the possibility of
              applying the abovementioned 'Classification' in its entirety. A decision to that effect would be
              notified to the Community through diplomatic channels.
              It is agreed that the scope of the 'List of classes of insurance' is the same as that of the
              'Classification of risks according to classes of insurance'. Comparability as between the two
              types of classification is as follows:
                               Swiss list of classes                         Classes of insurance according
                                   of insurance                              to the classification in Annex I
               1. Accident                                        A. 1
               2. Liability                                       A. 10, 11, 12, 13
               3. Fire and natural forces                         A. 8
               4. Transport                                       A. 4, 6, 7
               5. Vehicles                                        A. 3, 5
               6. Hail                                            A. 9
               7. Animals                                         A. 9
               8. Theft                                           A. 9
               9. Plate glass                                     A. 9
              10. Damage by water                                 A. 9
              11. Machinery                                       A. 9
              12. Jewellery                                       A. 9
              13. Suretyship                                      A. 15
              14. Credit                                          A. 14
              15. Legal defence                                   A. 17
              16. Health                                          A. 2
              17. Rain                                            A. 16, 18
              18. Special policies                                A. 16, 18'
         I have taken note of this communication, and in turn ask you to accept, Sir, the assurance of my
         high consideration.
                                                                                    Gerard IMBERT
                                                                  Head of the Delegation of the Commission
                                                                          of the European Communities
         Franz Blankart, Esq. Ambassador
         Head of the Swiss Delegation
         Berne
 ---pagebreak--- No C 53/38                             Official Journal of the European Communities                                5. 3. 90
                                              EXCHANGE OF LETTERS No 7
                                            The capital of insurance undertakings
           Swiss Delegation
                                                                                            Berne, 15 June 1989
           Sir,
           With reference to the Agreement between Switzerland and the Community, initialled today, I have
           the honour to remind you of our understanding that the provisions concerning the minimum
           solvency margin calculated in accordance with Article 2 (2) of Protocol 1, and the minimum
           guarantee fund, referred to in Article 3 (2) of that Protocol, have no bearing on the laws or practices
           of the Contracting Parties regarding the requirements relating to the capital of undertakings.
           I would ask you to kindly confirm the above, and to accept, Sir, the assurance of my high
           consideration.
                                                                                Franz BLANKART
                                                                         Head of the Swiss Delegation
           Gerard Imbert, Esq. Director
           Head of the Delegation of the Commission
           of the European Communities
           Brussels
                  Delegation of the
           Commission of the European
                    Communities
                                                                                          Brussels, 25 June 1989
           Sir,
           I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
                'With reference to the Agreement between Switzerland and the Community, initialled today, I
                have the honour to remind you of our understanding that the provisions concerning the
                minimum solvency margin calculated in accordance with Article 2 (2) of Protocol No 1, and the
                minimum guarantee fund, referred to in Article 3 (2) of that Protocol, have no bearing on the
                laws or practices of the Contracting Parties regarding the requirements relating to the capital of
                undertakings.'
           I hereby confirm the above, and in turn ask you to accept, Sir, the assurance of my high
           consideration.
                                                                                 Gerard IMBERT
                                                                  Head of the Delegation of the Commission
                                                                         of the European Communities
           Franz Blankart, Esq. Ambassador
           Head of the Swiss Delegation
           Berne
 ---pagebreak--- 5. 3. 90                             Official Journal of the European Communities                                No C 53/39
                                            EXCHANGE OF LETTERS No 8
                                         Transitional arrangements for assistance
                Delegation of the
         Commission of the European
                   Communities
                                                                                          Brussels, 26 July 1989
         Sir,
         With reference to the Agreement between the Community and Switzerland, initialled today, I have
         the honour to remind you of our understanding that the Member States of the Community may
         allow undertakings which, on 12 December 1984, provided only assistance in their territory a
         period of five years from that date in order to comply with the requirements set out in Article 16 of
         this Agreement.
         The Member States of the Community may allow any undertakings referred to above which, upon
         expiry of the five-year period, have not fully established the solvency margin a further period not
         exceeding two years in which to do so provided that such undertakings have, in accordance with
         Article 18 of this Agreement, submitted for the approval of the supervisory authority the measures
         which they propose to take for that purpose.
         Any undertaking referred to above which wishes to extend its business to other classes or, in the
         case referred to in Article 8(1) of this Agreement, to another part of the territory, may do so only on
         condition that it complies forthwith with this Agreement.
         Moreover, until 12 December 1992, the condition specified in point 5 of part B of Annex II to this
         Agreement, namely that the accident or breakdown must have happened in the territory of the
         Contracting Party in which the undertaking providing cover is established, shall not apply to the
         operations referred to in the third indent of the abovementioned point where these operations are
         carried out by the ELPA (Automobile and Touring Club of Greece).
         I would ask you to kindly confirm the above, and to accept, Sir, the assurance of my high
         consideration.
                                                                              Geoffrey FITCHEW
                                                                 Head of the Delegation of the Commission
                                                                        of the European Communities
         Franz Blankart, Esq.
         State Secretary
         Head of the Swiss Delegation
         Berne
         Swiss Delegation
                                                                                            Berne, 26 July 1989
         Sir,
         I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
              'With reference to the Agreement between the Community and Switzerland, initialled today, I
              have the honour to remind you of our understanding that the Member States of the Community
              may allow undertakings which, on 12 December 1984, provided only assistance in their
              territory a period of five years from that date in order to comply with the requirements set out in
              Article 16 of this Agreement.
 ---pagebreak--- No C 53/40                           Official Journal of the European Communities                                5. 3. 90
               The Member States of the Community may allow any undertakings referred to above which,
               upon expiry of the five-year period, have not fully established the solvency margin a further
               period not exceeding two years in which to do so provided that such undertakings have, in
               accordance with Article 18 of this Agreement, submitted for the approval of the supervisory
               authority the measures which they propose to take for that purpose.
               Any undertaking referred to above which wishes to extend its business to other classes or, in the
               case referred to in Article 8 (1) of this Agreement, to another part of the territory, may do so
               only on condition that it complies forthwith with this Agreement.
               Moreover, until 12 December 1992, the condition specified in point 5 of part B of Annex II to
               this Agreement, namely that the accident or breakdown must have happened in the territory of
               the Contracting Party in which the undertaking providing cover is established, shall not apply
               to the operations referred to in the third indent of the abovementioned point where these
               operations are carried out by the ELPA (Automobile and Touring Club of Greece).'
           I hereby confirm the above, and in turn ask you to accept, Sir, the assurance of my high
           consideration.
                                                                             Franz BLANKART
                                                                       Head of the Swiss Delegation
           Geoffrey Fitchew, Esq.
           Director General
           Head of the Delegation of the Commission
           of the European Communities
           Brussels
 ---pagebreak--- 5. 3. 90                              Official Journal of the European Communities                                   No C 53/41
                                             EXCHANGE OF LETTERS No 9
                Transitional arrangements for the large risks referred to in Article 2 (1) of Protocol 2
                  Delegation of the
         Commission of the European
                    Communities
                                                                                            Brussels, 26 July 1989
         Sir,
         With reference to the Agreement between the Community and Switzerland, initialled today, I have
         the honour to remind you of our understanding that Greece, Ireland, Spain and Portugal benefit
         from the following transitional arrangements in respect of the large risks referred to in Article 2(1)
         of Protocol 2 to this Agreement:
         (a) until 31 December 1992, they may apply, to all risks, the regime other than that for risks referred
              to in Article 2 (1) of Protocol 2 to this Agreement;
         (b) from 1 January 1993 to 31 December 1994, the regime for large risks shall apply to risks referred
              to in Article 2(1) (a) and (b) of Protocol 2 to this Agreement; for risks referred to under (c) of the
              same paragraph, these Member States shall fix the thresholds to apply therefor;
         (c) Spain:
             — from 1 January 1995 to 31 December 1996, the thresholds of the first stage fixed in Article 2
                  (1) (c) of Protocol 2 to this Agreement shall apply,
             — from 1 January 1997, the thresholds of the second stage shall apply;
         (d) Portugal, Ireland and Greece:
             — from 1 January 1995 to 31 December 1998 the thresholds of the first stage fixed in Article 2
                  (1) (c) of Protocol 2 to this Agreement shall apply,
             — from 1 January 1999 the thresholds of the second stage shall apply.
         The derogation allowed from 1 January 1995 shall only apply to contracts covering risks classified
         under classes 8, 9, 13 and 16 in part A of Annex I situated exclusively in one of the four Member
         States of the Community benefiting from the transitional arrangements.
         I would ask you to kindly confirm the above, and to accept, Sir, the assurance of my high
         consideration.
                                                                               Geoffrey FITCHEW
                                                                   Head of the Delegation of the Commission
                                                                         of the European Communities
         Franz Blankart, Esq.
         State Secretary
         Head of the Swiss Delegation
         Berne
 ---pagebreak--- No C 53/42                              Official Journal of the European Communities                                5. 3. 90
           Swiss Delegation
                                                                                             Berne, 26 July 1989
           Sir,
           I have the honour to acknowledge receipt of your letter of today's date, worded as follows:
                'With reference to the Agreement between the Community and Switzerland, initialled today, I
                have the honour to remind you of our understanding that Greece, Ireland, Spain and Portugal
                benefit from the following transitional arrangements in respect of the large risks referred to in
                Article 2 (1) of Protocol 2 to this Agreement:
                (a) until 31 December 1992, they may apply, to all risks, the regime other than that for risks
                    referred to in Article 2 (1) of Protocol 2 to this Agreement;
                (b) from 1 January 1993 to 31 December 1994, the regime for large risks shall apply to risks
                    referred to in Article 2 (1) (a) and (b) of Protocol 2 to this Agreement; for risks referred to
                    under (c) of the same paragraph, these Member States shall fix the thresholds to apply
                    therefore;
                (c) Spain:
                    — from 1 January 1995 to 31 December 1996, the thresholds of the first stage fixed in
                        Article 2 (1) (c) of Protocol 2 to this Agreement shall apply,
                    — from 1 January 1997, the thresholds of the second stage shall apply;
                (d) Portugal, Ireland and Greece:
                    — from 1 January 1995 to 31 December 1998 the thresholds of the first stage fixed in Article
                        2 (1) (c) of Protocol 2 to this Agreement shall apply.
                    — from 1 January 1999 the thresholds of the second stage shall apply.
           The derogation allowed from 1 January 1995 shall only apply to contracts covering risks classified
           under classes 8, 9, 13 and 16 in part A of Annex I situated exclusively in one of the four Member
           States of the Community benefiting from the transitional arrangements.'
           I hereby confirm the above, and in turn ask you to accept, Sir, the assurance of my high
           consideration.
                                                                                  Franz BLANKART
                                                                          Head of the Swiss Delegation
           Geoffrey Fitchew, Esq.
           Director General
           Head of the Delegation of the Commission
           of the European Communities
           Brussels
 ---pagebreak--- 5. 3. 90                              Official Journal of the European Communities                                    No C 53/43
         Joint declaration by the Contracting Parties concerning the period between the date of signature
                                     and the date of entry into force of the Agreement
         During the period between the date of signature and the date of entry into force of this Agreement,
         referred to in Article 44 (3) thereof, each Contracting Party hereby declares that it will not
         introduce any new provisions on supervision which are liable to be repealed under this Agreement
         concerning agencies and branches belonging to undertakings whose head office is situated in the
         territory of the other Contracting Party and which wish to become established in its territory, or are
         established there, for the purpose of taking up or pursuing the self-employed activity of direct
         insurance other than life assurance.
         The Contracting Parties further undertake to initiate without delay the procedures necessary to
         amend their national laws in accordance with this Agreement.
                                                         FINAL ACT
         The representatives of
         THE SWISS CONFEDERATION
         and THE EUROPEAN ECONOMIC COMMUNITY
         assembled in . . . on . . .
         on the occasion of the signature of the Agreement between the Swiss Confederation and the European Economic
         Community on direct insurance other than life assurance,
         have, at the time of signature of this Agreement,
         — taken note of the exchanges of letters annexed to the abovementioned Agreement:
             Exchange of Letters No 1: Principle of non-discrimination
             Exchange of Letters No 2: Scope of authorization
             Exchange of Letters No 3 : Authorized agent
             Exchange of Letters No 4: Assignment to the Swiss Securities Fund of immovable property directly owned
             by insurance undertakings
             Exchange of Letters No 5: Principles governing investment
             Exchange of Letters No 6: Swiss list of classes of insurance
             Exchange of Letters No 7: The capital of insurance undertakings
             Exchange of Letters No 8: Transitional arrangements for assistance
             Exchange of Letters No 9: Transitional arrangements for the large risks referred to in Article 2 (1) of
             Protocol 2
         — adopted the following declaration which is annexed to the above Agreement:
             Joint declaration by the Contracting Parties concerning the period between the date of signature and the
             date of entry into force of the Agreement.
 ---pagebreak--- No C 53/44                               Official Journal of the European Communities 5. 3. 90
           Hecho en            , el
           Udfaerdiget i            , den
           Geschehen zu               , am
            Eyive         , TT|V
           Done at          , on this             day of         in the year
           Fait a        , le
           Fatto a         , il
           Gedaan te            , de
           Feito em          , em
           En nombre del Consejo de las Comunidades Europeas
           Pa Radet for De Europaeiske Faellesskabers vegne
          Im Namen des Rates der Europaischen Gemeinschaften
           Tia TO SuupouXio xcov EupoorcaiKcbv KOIVOTT|TG)V
          In the name of the Council of the European Communities
          Au nom du Conseil des Communautes europeennes
          A nome del Consiglio delle Comunita Europee
          Namens de Raad van de Europese Gemeenschappen
          Em nome do Conselho das Comunidades Europeias
          Fur die Schweizerische Eidgenossenschaft
          Pour la Confederation suisse
          Per la Confederazione svizzera