CELEX: 51986PC0764
Language: en
Date: 1987-04-08
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS OF INSURANCE UNDERTAKINGS

18. 5. 87                           Official Journal of the European Communities                            No C 131/1
                                                            II
                                                    (Preparatory Acts)
                                               COMMISSION
             Proposal for a Council Directive on the annual accounts and consolidated accounts of
                                                 insurance undertakings
                                                   COM(86) 764 final
                            (Submitted by the Commission to the Council on 21 January 1987)
                                                      (87/C 131/01)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                       Whereas the Seventh Council Directive 83/349/EEC of
                                                                13 June 1983 based on Article 54 (3) (g) of the Treaty
                                                               on consolidated accounts (2) provides for derogations
Having regard to the Treaty establishing the European          for insurance undertakings only until expiry of the
Economic Community, and in particular Article 54               deadline imposed for the application of this Directive;
thereof,                                                       whereas this Directive must therefore also contain pro-
                                                               visions specific to insurance undertakings in respect of
Having regard to the proposal from the Commission,             consolidated accounts;
Having regard to the opinion of the European Parlia-           Whereas such coordination is also urgently required
ment,                                                          owing to the Community-wide operations of insurance
                                                               undertakings; whereas, for creditors, debtors, members,
                                                               policy-holders and their advisers and for the general
Having regard to the opinion of the Economic and               public, improved comparability of the annual accounts
Social Committee,                                              and consolidated accounts of these undertakings is
                                                               therefore of crucial importance;
Whereas Article 54 (3) (g) of the Treaty requires the
coordination to the necessary extent of the safeguards         Whereas, in the Member States, insurance undertakings
which, for the protection of the interests of members          of different legal forms are in competition with each
and others, are required by Member States for compa-           other; whereas undertakings engaged in the business of
nies or firms within the meaning of the second para-           direct insurance customarily engage also in the business
graph of Article 58 of the Treaty, with a view to making       of reinsurance and are therefore in competition with
such safeguards equivalent throughout the Community;           specialist reinsurance undertakings; whereas it is there-
                                                               fore appropriate not to confine coordination to the
                                                               legal forms covered by Directive 78/660/EEC, but to
Whereas the Fourth Council Directive 78/660/EEC of             choose a scope which is in line with the First Council
25 July 1978 based on Article 54 (3) (g) of the Treaty         Directive 73/239/EEC of 24 July 1973 on the coordi-
on the annual accounts of certain types of companies (1),      nation of laws, regulations and administrative pro-
as last amended by the Act of Accession of Spain and           visions relating to the taking-up and pursuit of the
Portugal, need not be applied to insurance companies,          business of direct insurance other than life insurance (3)
hereinafter referred to as 'insurance undertakings',           and the First Council Directive 79/267/EEC of 5 March
pending subsequent coordination; whereas, in view of           1979 on the coordination of laws, regulations and
the importance of insurance undertakings in the Com-           administrative provisions relating to the taking-up and
munity, such coordination cannot be delayed any longer         pursuit of the business of direct life assurance (4), both
following implementation of Directive 78/660/EEC;
                                                               (2) O J N o L 193, 18.7. 1983, p. 1.
                                                               (3) OJ No L 228, 16. 8. 1973, p. 3.
(') OJ No L 222, 14. 8. 1978, p. 11.                           (4) OJ No L 63, 13. 3. 1979.
 ---pagebreak--- No C 131/2                           Official Journal of the European Communities                                  18. 5. 87
as last amended by the Act of Accession of Spain and            Whereas, in view of the special nature of insurance
Portugal, but which also includes certain undertakings          undertakings, certain changes are necessary with regard
that are excluded from the scope of those Directives and        to the notes on the annual accounts and on the consoli-
companies and firms which are specialist reinsurance            dated accounts;
undertakings;
Whereas although, in view of the specific characteristics       Whereas, in line with the intention to cover all those
of insurance undertakings, it appears appropriate to            insurance undertakings which are within the scope of
propose a separate Directive on annual accounts and             Directives 73/239/EEC and 79/267/EEC as well as cer-
consolidated accounts for such undertakings, this must          tain others, derogations are not provided for small
not result in a set of standards being established which        and medium-sized insurance undertakings such as are
is separate from those of Directives 78/660/EEC and             provided for under the terms of Directive 78/660/EEC,
83/349/EEC; whereas such separate standards would               but certain small mutual undertakings which are
be neither appropriate nor consistent with the basic            excluded from the scope of the said Directives 73/239/
principles underlying the coordination of company law           EEC and 79/267/EEC should not be covered;
since, given the important place they occupy in the
economy of the Community, insurance undertakings
cannot be excluded from the framework of standards              Whereas for the same reasons, the scope allowed Mem-
devised for undertakings generally; whereas for this            ber States under Directive 83/349/EEC to exempt parent
reason only the particular characteristics of insurance         undertakings from the consolidation requirements if
undertakings are taken into account, and this Directive         the undertakings to be consolidated do not together
therefore deals only with exceptions to the rules con-          exceed a certain size has not been extended to insurance
tained in Directives 78/660/EEC and 83/349/EEC;                 undertakings; whereas in view of its particular nature
                                                                special provisions are needed for the association of
Whereas there are important differences in the structure        underwriters known as Lloyd's;
and content of the balance sheets of insurance undertak-
ings in the various Member States; whereas this Direc-
                                                                Whereas the provisions of this Directive should also
tive must therefore lay down the same structure and
                                                                apply to the consolidated accounts drawn up by a
the same item designations for the balance sheets of all
                                                                parent undertaking which is a financial holding com-
insurance undertakings in the Community;
                                                                pany and where its subsidiary undertakings are either
Whereas, if the annual accounts and consolidated                exclusively or mainly insurance undertakings;
accounts are to be comparable, a number of basic
questions regarding the presentation of certain trans-
                                                                Whereas the examination of problems which arise in
actions in the balance sheet must be settled;
                                                                connection with this Directive, notably concerning its
Whereas, in the interests of greater comparability, it is       application, requires the cooperation of representatives
also necessary that the content of certain balance sheet        of the Member States and the Commission in the form
items be determined precisely;                                  of a contact committee; whereas, in order to avoid the
                                                                proliferation of such committees, it is desirable that the
Whereas the same also applies to the composition and            said cooperation be achieved by means of the committee
definition of certain items in the profit and loss account;     provided for in Article 52 of Directive 78/660/EEC;
                                                                whereas nevertheless, when examining problems con-
Whereas the comparability of figures in the balance             cerning insurance undertakings, the committee will be
sheet and profit and loss account also depends crucially        appropriately constituted;
on the values at which assets and liabilities are entered
in the balance sheet; whereas for a proper understand-
ing of the financial situation of insurance undertakings        Whereas, in view of the complexity of the matter, the
it is necessary to disclose the current value of invest-        insurance undertakings covered by this Directive must
ments as well as their value based upon the principle           be allowed a longer period than usual to implement the
of purchase price or production costs;                          provisions thereof,
             HAS ADOPTED THIS DIRECTIVE:
                                                        SECTION 1
                                             Preliminary provisions and scope
                         Article 1                              2.    Where reference is made in Directive 78/660/EEC
                                                                to Articles 9 and 10 (balance sheet) or to Articles 23 to
1.    The provisions of Directive 78/660/EEC shall              26 (profit and loss account) of that Directive, such
apply to insurance undertakings within the meaning of           references shall be construed as references to Article 5
Article 2 of this Directive, except where this Directive        (balance sheet) or to Article 29 (profit and loss account)
provides otherwise.                                             of this Directive.
 ---pagebreak--- 18. 5. 87                            Official Journal of the European Communities                                  N o C 131/3
3.    Where reference is made in Directive 78/660/EEC             (b) undertakings within the meaning of Article 1 of
to balance sheet items for which this Directive makes                 Directive 79/267/EEC, excluding those institutions,
no equivalent provision, such references shall be deemed              organizations and mutual associations referred to
to be references to the items in Article 5 of this Directive          in Article 2 (2) and (3) and Article 3 of that Directive;
which include the assets and liabilities in question.
                                                                      or
                                                                  (c) undertakings whose whole or main activity consists
                          Article 2
                                                                      of reinsurance operations.
The coordination measures prescribed by this Directive            Such undertakings are referred to in this Directive as
shall apply to companies or firms within the meaning              insurance undertakings.
of the second paragraph of Article 58 of the Treaty
which are:
                                                                                            Article 3
(a) undertakings within the meaning of Article 1 of
    Directive 73/239/EEC, excluding those mutual
                                                                  1.    This Directive shall apply to the association of
    associations which are excluded from the scope of
                                                                  underwriters known as Lloyd's with such adaptations
    that Directive by virtue of Article 3 thereof but
                                                                  as are necessary to take account of the particular nature
    including those institutions referred to in Article 4
                                                                  and structure of Lloyd's.
    thereof except where their activity does not consist
    wholly or mainly of the carrying-on of insurance              2.     The Commission shall submit to the Council, not
    business;                                                     later than ..., a report on the adaptations made under
    or                                                            paragraph 1.
                                                          SECTION 2
                    General provisions concerning the balance sheet and the profit and loss account
                                                           Article 4
             Article 4 (2) of Directive 78/660/EEC shall not apply to insurance undertakings.
                                                          SECTION 3
                                                 Layout of the balance sheet
                                                           Article 5
             The Member States shall prescribe the following layout for the balance sheet.
                                                             Assets
             A. Subscribed capital unpaid
                 of which there has been called (unless national law provides
                 that called-up capital be shown under 'Liabilities'. In that case,
                 the part of the capital called but not yet paid must appear as
                 an asset either under A or under D.4)
             B. Intangible    assets
                 as described under assets headings B and C.I of Article 9 of
                 Directive 78/660/EEC, showing separately:
                 — formation expenses, as defined by national law and in so
                     far as national law permits their being shown as an asset
 ---pagebreak--- No C 131/4                        Official Journal of the European Communities              18. 5. 87
                 (unless national law requires their disclosure in the notes
                 on the accounts),
                 goodwill, to the extent that it was acquired for valuable
                 consideration (unless national law requires its disclosure in
                 the notes on the accounts)
            Investments
            I.   Land and buildings:
                 — showing separately land and buildings occupied by the
                     insurance undertaking for its own activities
            II. Investments in affiliated undertakings and participating
                 interests:
                 1. Shares in affiliated undertakings
                 2. Debt securities issued by, and loans to, affiliated under-
                     takings
                 3. Participating interests
                 4. Debt securities issued by, and loans to, undertakings
                     with which the insurance undertaking is linked by virtue
                     of a participating interest
            III. Other financial investments:
                 1. Shares and other variable-yield securities
                 2. Debt securities                                             (Article 9)
                 3. Loans guaranteed by mortgage                               (Article 10)
                 4. Other loans                                                (Article 10)
                 5. Deposits with credit institutions                          (Article 11)
            IV. Investments for the benefit of life insurance policy holders
                 who bear the investment risk                                  (Article 12)
            V. Own shares (with an indication of their nominal value or,
                 in the absence of a nominal value, their accounting par
                 value) to the extent that national law permits their being
                 shown in the balance sheet
            VI. Deposits with cedant undertakings                              (Article 13)
         D.  Debtors
            1. Debtors arising out of direct insurance operations, with a
                 separate indication of amounts owed by:
                 (a) affiliated undertakings
                 (b) undertakings with which the insurance undertaking is
                     linked by virtue of a participating interest
            2. Debtors arising out of reinsurance operations, with a separ-
                 ate indication of amounts owed by:
                 (a) affiliated undertakings
                 (b) undertakings with which the insurance undertaking is
                     linked by virtue of a participating interest
            3. Other debtors, with a separate indication of amounts owed
                 by:
                 (a) affiliated undertakings
                 (b) undertakings with which the insurance undertaking is
                     linked by virtue of a participating interest
 ---pagebreak--- 18. 5. 87                           Official Journal of the European Communities                       N o C 131/5
             4. Subscribed capital called but not paid (unless national law
                  provides that called-up capital be shown as an asset under
                  A)
          E. Tangible assets and         consumables
              1. Tangible assets as listed under assets heading C II of Article
                  9 of Directive 78/660/EEC, other than land and buildings
             2.    Consumables
          F. Cash at bank and in hand                                                     (Article 11)
          G. Prepayments and accrued          income
              1. Accrued interest and rent                                                (Article 14)
             2. Deferred acquisition costs
                  (distinguishing those arising in non-life and life insurance
                  business)                                                               (Article 15)
             3. Other prepayments and accrued income
          H. Loss for the financial year
              (unless national law provides for it to be shown under A.VI
              under 'Liabilities')
                                                       Liabilities
          A. Capital and reserves
             I.   Subscribed capital                                                      (Article 16)
                  (unless national law provides for called-up capital to be
                  shown under this item. In that case, the amounts of sub-
                  scribed capital and paid-up capital must be shown separ-
                  ately)
             II. Share premium account
             III. Revaluation reserve
             IV. Reserves                                                                 (Article 17)
             V. Profit or loss brought forward
             VI. Profit or loss for the financial year
                  (unless national law requires that this item be shown under
                  H under 'Assets' or under H under 'Liabilities')
          B. Subordinated      liabilities                                                (Article 18)
          C. Technical      provisions                                           (Articles 19 and 20)
              1. Unearned premiums (and unexpired risks)                         (Articles 21 and 22)
                  (a) gross amount
                   (b) reinsurance amount ( —)
 ---pagebreak--- No C 131/6                        Official Journal of the European Communities
           2. Life insurance provisions                                         (Article 23)
                (a) gross amount
                (b) reinsurance amount ( —)
               — showing separately the amounts in respect of contracts
                    under which the policy holder bears the investment risk
           3. Claims outstanding                                                (Article 24)
               (a) gross amount
               (b) reinsurance amount ( —)
           4. Provision for bonuses and rebates                                (Article 25)
               (a) gross amount
               (b) reinsurance amount ( —)
          5. Equalization provisions required by national law                  (Article 26)
          6. Other technical provisions
               (a) gross amount
               (b) reinsurance amount ( —)
      D. Provisions for other liabilities and charges
           1. Provisions for pensions and similar obligations
          2. Provisions for taxation
          3. Other provisions
      E. Deposits withheld from reinsurers                                     (Article 27)
      F.    Creditors
          (for each of the following items, a separate indication must be
          given of amounts owed to:
          (a) affiliated undertakings
          (b) undertakings with which the insurance undertaking is linked
              by virtue of a participating interest)
          1. Debenture loans, showing convertible loans separately
          2. Amounts owed to credit institutions
          3. Creditors arising out of direct insurance operations
          4. Creditors arising out of reinsurance operations
          5. Other creditors, including tax and social security
      G. Accruals and deferred     income
      H. Profit for the financial year
          (unless national law provides for it to be shown under A.VI
          under 'Liabilities')
 ---pagebreak--- 18. 5. 87                            Official Journal of the European Communities                               N o C 131/7
                                                          Article 6
            Articles 11, 12, 27, 44, 47 (2) and (3) and 51 (2) of Directive 78/660/EEC shall not apply to
            insurance undertakings.
                                                          Article 7
            The provisions of Article 14 of Directive 78/660/EEC shall not apply to those commitments
            which are taken into account in determining the amount of the technical provisions.
                                                         SECTION 4
                                 Special provisions relating to certain balance sheet items
                         Article 8                                 'Deposits with credit institutions' comprises amounts
                                                                   the withdrawal of which is subject to a time restriction,
 1.   Article 15 (1) and (2) of Directive 78/660/EEC               whereas sums deposited with no such restriction shall
shall not apply to insurance undertakings.                         appear under assets item F, even if they bear interest.
2.    The requirements of paragraph 3 of the above-
mentioned Article shall apply to each item of B, C and
E. 1 under 'Assets' in the layout prescribed in Article 5.                                Article 12
                               , n                                Assets: item C I V
                         Article 9
Assets: item C.III.2                                              Investments for the benefit of life insurance policy hol-
                                                                  ders who bear the investment risk
Debt securities
                                                                  Investments for the benefit of life insurance policy hol-
1.    This item shall comprise negotiable fixed-interest          ders who bear the investment risk shall comprise the
debt securities issued by credit institutions, by other           amount of all investments which the insurance under-
undertakings or. by public bodies, in so far as they are          taking holds by virtue of its commitment under life
not appropriate to asset items C.II.2 and C.II.4.                 insurance contracts the benefits of which are expressed
                                                                  by reference to the value of those investments. Pending
2.    Securities carrying interest rates that vary in line        further harmonization, Member States may however
with specific factors, for example the interest rate on           require or permit insurance undertakings to include
the inter-bank market or on the Euromarket, shall also            such investments under the headings where they would
be regarded as fixed-interest debt securities.                    appear but for the provisions of this Article. Where use
                                                                  is made of this option the amount of such investments
                                                                  under each of the respective headings shall be separately
                        Article 10
                                                                  disclosed.
Assets: item C.III.3 and 4
Loans guaranteed by mortgages and other loans                                            Article 13
Loans to policy holders for which the policy is the main
security shall be included under the heading of 'Other            Assets: item C.VI
loans' and their amount shall be disclosed in the notes
on the accounts. Loans guaranteed by mortgages shall              Deposits with cedant undertakings
be shown as such even where they are also secured by
an insurance policy. Where the amount of 'other loans'            In the balance sheet of an undertaking accepting rein-
not secured by a policy is significant an appropriate             surance, this item shall comprise amounts deposited
breakdown shall be given in the notes on the accounts.            with, or withheld by, other insurance undertakings
                                                                  under insurance contracts. These amounts may not be
                                                                  merged with other amounts owed by or to the other
                        Article 11                                undertakings in question.
Assets: items C.III.5 and F                                       Securities deposited with cedant undertakings which
                                                                  remain the property of the undertaking accepting rein-
Deposits with credit institutions                                 surance shall not be shown here but under the appropri-
Cash at bank and in hand                                          ate heading for the type of asset in question.
 ---pagebreak---     No C 131/8                          Official Journal of the European Communities                                 18. 5. 87
                            Article 14                                                        Article 18
    Assets: item G.l                                               Liabilities: item B
    Accrued interest and rent                                      Subordinated liabilities
    Accrued interest and rent shall comprise those items           Where it has been contractually agreed that, in the event
    that represent interest and rent that have been earned         of winding up or of bankruptcy, liabilities, whether or
    up to the date of the balance sheet but have not yet           not represented by certificates, are to be repaid only
    become receivable.                                             after the claims of all other creditors have been met,
                                                                   the liabilities in question shall be shown under 'Liabilit-
                                                                   ies' item B.
                           Article 15
    Assets: item G.2
                                                                                             Article 19
    Deferred acquisition costs
                                                                  Liabilities: item C
   Deferred acquisition costs shall comprise the amount
   of expenditure incurred on the acquisition of insurance        Technical provisions
   business premium income which relates to a subsequent
   financial year or years having regard to the period to         Article 20 of Directive 78/660/EEC shall not apply to
   which the individual contract relates. Member States           the technical provisions disclosed under 'Liabilities'
   may prohibit the deferral of such amounts in life              item C.
   insurance business; any such prohibition must be dis-
   closed in the notes on the accounts.
   Where the zillmerization of life insurance contracts                                      Article 20
   results in a negative amount in respect of particular
   contracts the total of such negative amounts shall be          Liabilities: item C
   included in deferred acquisition costs and disclosed in
  the notes on the accounts.                                      Reinsurance amount (deduction)
                                                                  The reinsurance amounts shall be determined in accord-
                           Article 16                             ance with the stipulations of the reinsurance contracts.
  Liabilities: item A.I
  Subscribed capital                                                                        Article 21
  This item shall comprise all amounts, irrespective of           Liabilities: item C.l
  their actual designations, which, in accordance with
  the legal structure of an insurance undertaking, are           Unearned premiums
  regarded under the national law of the Member State
  concerned as equity capital subscribed by the share-           Unearned premiums shall comprise the amount repre-
  holders or other proprietors.                                  senting that part of gross premiums written which is to
                                                                 be allocated to a subsequent financial year or sub-
                                                                 sequent financial years. In the case of life insurance
                                                                 Member States may, pending further harmonization,
                          Article 17                             permit or require the unearned premiums to be included
                                                                 in the life insurance provisions.
 Liabilities: item A.IV
 Reserves
                                                                                            Article 22
 Reserves shall comprise all the types of reserves listed
 in Article 9 of Directive 78/660/EEC under 'Liabilities'        Liabilities: item C.6 (or C.l)
 A.IV, as defined therein. The Member States may also
 require other types of reserves if necessary for insurance      Unexpired risks
undertakings the legal structures of which are not
covered by Directive 78/660/EEC.                                Unexpired risks shall comprise the amount set aside in
                                                                addition to unearned premiums in respect of risks to
These reserves shall be shown separately, as sub-items          be borne by the insurance undertaking after the end of
to 'Liabilities' item A.IV, in the balance sheets of the        the financial year, in order to provide for all claims and
insurance undertakings concerned, except for the                expenses in connection with insurance contracts in force
revaluation reserve, which is shown under 'Liabilities'         in excess of the related unearned premiums and any
item A.III.
                                                                premiums receivable on those contracts. The amount
 ---pagebreak--- 18. 5. 87                            Official Journal of the European Communities                             N o C 131/9
provided for unexpired risks shall be included in the                                   Article 25
amount for 'other technical provisions' at 'Liabilities'
item C.6, unless national legislation provides that it         Liabilities: item C.4
shall be added to unearned premiums as defined in
Article 21 and included in the amount disclosed at             Provision for bonuses and rebates
'Liabilities' item C.l, in which case the description of
that item shall be 'unearned premiums and unexpired            The provision for bonuses and rebates shall comprise
risks'. In either case, where the amount of unexpired          amounts intended for policy holders and other insured
risks is material it shall be separately disclosed either      parties by way of bonuses and rebates as defined in
in the balance sheet or in the notes on the accounts.          Article 34 to the extent that such amounts have not
                                                               been attributed to individual policy holders or other
                                                               insured parties through inclusion in the life insurance
                                                               technical provisions shown under 'Liabilities' item C.2
                                                               or otherwise.
                         Article 23
                                                                                        Article 26
Liabilities: item C.2
                                                               Liabilities: item C.5
Life insurance provisions
                                                               Equalization provisions required by national law
The life insurance provisions shall comprise the actuari-
ally estimated value of the liabilities net of future pre-     The amount shown under 'Liabilities' item C.5 shall
miums in respect of life direct insurance and reinsurance      comprise any amounts set aside in compliance with
contracts. Negative amounts resulting from the zillmer-        legal provisions to equalize fluctuations in loss ratios
ization of life insurance provisions shall be disclosed in     in the coming years. Amounts set aside for similar
accordance with the provisions of Article 15.                  purposes other than by virtue of a legal requirement
                                                               shall be separately disclosed under 'Liabilities' item
                                                               A.IV. Member States may however permit or require
                                                               them to be included in 'other technical provisions' at
                                                               'Liabilities' item C.6, in which event their amount shall
                                                               be disclosed in the notes on the accounts if it is material.
                         Article 24
Liabilities: item C.3
                                                                                        Article 27
Claims outstanding                                             Liabilities: item E
1.     The provision for claims outstanding shall be the       Deposits withheld from reinsurers
total estimated ultimate cost to the insurance undertak-
ing of settling all claims arising from events which have      In the balance sheet of an undertaking ceding rein-
occurred up to the end of the financial year, whether           surance, this item shall comprise amounts deposited by,
reported or not, less amounts already paid in respect           or withheld from, other insurance undertakings under
of such claims.                                                 reinsurance contracts. These amounts may not be mer-
                                                                ged with other amounts owed to or by the other under-
                                                                takings in question.
2.     The provision created through the application of
Methods 1 or 2 described in Article 40 (1) shall be             Where the undertaking ceding reinsurance has received
included in the provision for claims outstanding. The           as a deposit securities which have been transferred to
amount so included shall be disclosed in the notes on           its ownership, this item shall comprise the amount
the accounts.                                                   owed by the cedant undertaking by virtue of the deposit.
 ---pagebreak--- No C 131/10                        Official Journal of the European Communities                             18. 5. 87
                                                       SECTION 5
                                        Layout of the profit and loss account
                                                       Article 28
          1.    The Member States shall prescribe the layout provided in Article 29 for the profit and
          loss account.
          2.    The technical account for non-life-insurance business is to be used for those classes of
          direct insurance which are within the scope of Directive 73/239/EEC and for the corresponding
          classes of reinsurance business.
          3.    The technical account for life insurance business is to be used for those classes of direct
          insurance wich are within the scope of Directive 79/267/EEC and for the corresponding
          classes of reinsurance business.
                                                       Article 29
                                                Profit and loss account
          I  Technical account — Non-life-insurance        business
               1. Premiums:
                   (a) gross premiums written                                                  (Article 30)
                   (b) outgoing reinsurance premiums (—)                                       (Article 31)
                   (c) change in provision for unearned premiums, net of
                       reinsurance ( + or —)                                                   (Article 32)
                   (d) earned premiums (result of (a), (b) and (c))
               2. Other technical income
               3. Claims incurred:                                                             (Article 33)
                   (a) gross claims paid
                   (b) amounts recoverable from reinsurers (—)
                   (c) change in provision for claims, net of reinsurance ( +
                       or-)
                   (d) net claims incurred (result of (a), (b), and (c))
               4. Changes in other technical provisions, net of reinsurance:
                   (a) change in unexpired risks provision ( + or —)
                   (b) changes in other technical provisions (not shown under
                       other headings) ( + or —)
                   (c) result of (a) and (b) ( + or —)
               5. Bonuses and rebates:                                                         (Article 34)
                   (a) gross bonuses and rebates
                   (b) amounts receivable from reinsurers (—)
                                                       —
                   (c) net bonuses and rebates ((a)      (b))
 ---pagebreak--- 18. 5. 87                           Official Journal of the European Communities            N o C 131/11
               6. Commissions and other technical charges:
                   (a) commissions                                               (Article 35)
                   (b) administrative expenses                                   (Article 36)
                   (c) commissions and profit participation         from  other
                        insurance undertakings (—)
                   (d) variations in deferred acquisition costs ( + or —)
                   (e) net amount of commissions and other technical charges
                        (result of (a), (b), (c), and (d))
               7. Other technical charges, net of reinsurance
               8. Subtotal (first technical result)
               9. Changes in equalization provisions and reserves:
                   (a) changes in legally prescribed equalization provisions
                        C+or-)
                   (b) changes in other equalization provisions and reserves
                        (+or-)
                   (c) result of (a) and (b)
              10. Allocated investment return ( + ) (III.10)                     (Article 37)
              11. Subtotal (second technical result (III.l)
          //. Technical account — Life insurance         business
               1. Premiums:
                   (a) gross premiums written                                    (Article 30)
                   (b) outgoing reinsurance premiums (—)                         (Article 31)
                   (c) change in provision for unearned premiums, net of
                        reinsurance ( + or —)                                    (Article 32)
                   (d) earned premiums (result of (a), (b) and (c))
               2. Income from participating interests, with a separate indi-
                   cation of that derived from affiliated undertakings
               3. Income from other investments, with a separate indication
                   of that derived from affiliated undertakings:                 (Article 38)
                   (a) income from land and buildings
                   (b) income from other investments
                    (c) result of (a) and (b)
               4. Profit on the realization of investments
               5. Value adjustments on investments
               6. Unrealized gains on investments                                (Article 39)
               7. Other technical income
                8. Subtotal: total technical income
 ---pagebreak--- No C 131/12                         Official Journal of the European Communities
                9. Claims incurred:                                                 (Article 33)
                    (a) gross claims paid
                    (b) amounts recoverable from reinsurers (—)
                    (c) net claims incurred (result of (a) and (b))
               10. Changes in technical provisions, as far as not shown under
                    1(c):
                    (a) life insurance provision, net of reinsurance ( + or —)     (Article 32)
                    (b) other technical provisions, net of reinsurance         (+
                        or-)
               11. Bonuses and rebates:                                            (Article 34)
                    (a) gross bonuses and rebates
                    (b) amounts receivable from reinsurers (—)
                    (c) net bonuses and rebates ((a) — (b))
               12. Commissions and other technical charges:
                    (a) commissions                                               (Article 35)
                    (b) administrative expenses                                   (Article 36)
                    (c) commissions and profit participations from          other
                        insurance undertakings (—)
                    (d) variations in deferred acquisition costs ( + or —)
                    (e) net amount of commissions and other technical charges
                        (result of (a), (b), (c) and (d))
               13. Investment charges:                                            (Article 38)
                    (a) charges, including interest, relating to land and build-
                        ings
                    (b) other investment        management   charges,   including
                        interest
               14. Losses on the realization of investments
               15. Value adjustments on investments
               16. Unrealized losses on investments                               (Article 39)
               17. Other technical charges
               18. Subtotal: total technical charges
               19. Subtotal (first technical result)
               20. Allocated investment return ( —) (III.9)                       (Article 38)
               21. Subtotal (second technical result) (III.2)
          III. Non-technical     account
                1. Result of technical account — non-life-insurance business
                    (111)
 ---pagebreak--- 18. 5. 87                           Official Journal of the European Communities                            No C 131/13
                 2. Result of technical account — life insurance business (11.21)
                 3. Income from participating interests, apart from that shown
                    in the technical account, with a separate indication of that
                    derived from affiliated untertakings
                 4. Income from other investments, with a separate indication
                    of that derived from affiliated undertakings:
                    (a) income from land and buildings
                    (b) income from other investments
                 5. Value adjustments on investments (+ or —)
                 6. Investment charges:
                    (a) charges, including interest, related to land and build-
                         ings
                    (b) other investment management charges, including
                        interest
                 7. Profits on the realization of investments
                 8. Losses on the realization of investments
                 9. Allocated investment return transferred from life insurance
                    technical account (11.20) (+)
                10. Allocated investment return transferred           to non-life-
                    insurance technical account (1.10) (—)
                11. Non-investment income
                12. Non-investment charges, including value adjustments
                13. Tax on profit or loss on ordinary activities
                14. Profit or loss on ordinary activities after taxation
                15. Extraordinary income
                16. Extraordinary charges
                17. Extraordinary profit or loss
                18. Tax on extraordinary profit or loss
                19. Other taxes not shown under the above items
                20. Profit or loss for the financial year
                                                       SECTION 6
                      Special provision relating to certain items in the profit and loss account
                       Article 30                               1. Article 28 of Directive 78/660/EEC shall not apply
                                                               to insurance undertakings.
Non-life technical account item 1.1 (a)                        2.     Gross premiums written shall comprise all
                                                                amounts received and receivable in respect of insurance
                                                                contracts issued by or on behalf of the insurance under-
Life technical account item II. 1 (a)                          taking, including:
                                                                (a) single premiums, inclusive of annuity consider-
Gross premiums written                                              ations;
 ---pagebreak--- No C 131/14                           Official Journal of the European Communities                                 18. 5. 87
(b) additions to premiums in the case of semi-annual,            1.    Claims incurred shall comprise all amounts paid
    quarterly or monthly payments and recoveries from           and payable, after taking into account provisions made
    policy holders of expenses borne by the company;            in previous years, in respect of liabilities arising in
                                                                relation to events occurring up to and including the
(c) in the case of coinsurance, the insurance undertak-         balance sheet date. The amounts in question include
     ings^ portion of total premiums (excluding pre-            annuities, surrenders, adjustments of claims in respect
     miums to be allocated to coinsurance partners);            of previous years still outstanding at the balance sheet
                                                                date, losses incurred but not reported, external and
(d) reinsurance premiums in respect            of  business     internal direct and indirect claims settlement costs and
     acquired from ceding companies;                            entries and withdrawals of loss-provisions to and from
                                                                ceding insurance undertakings and reinsurers. Amounts
after deduction of cancellations and of taxes and para-         received or receivable as a result of obtaining the legal
fiscal contributions or levies charged by reference to          ownership of insured property or acquiring the rights
the amount of individual premiums or the volume of              of the policy holder against third parties in connection
premiums.                                                       with the settlement of a claim (salvage and subrogation)
                                                                 shall be deducted. Where such amounts are material
                                                                 they shall be disclosed in the notes on the accounts.
                                                                2.      Where the amount of adjustments of claims in
                          Article 31                             respect of previous years still outstanding at the balance
                                                                 sheet date is material, it shall be disclosed in the notes
Non-life technical account item 1.1 (b)                          on the accounts.
Life technical account item II.1 (b)
Outgoing reinsurance premiums
                                                                                         Article 34
Outgoing reinsurance premiums shall comprise all
amounts paid and payable in respect of outgoing rein-            Non-life technical account: items 1.5
surance contracts entered into by the insurance under-
taking.
                                                                 Life technical account: item 11.11
                                                                 Bonuses and rebates
                          Article 32                             Bonuses shall comprise all amounts chargeable for the
                                                                 financial year which are paid or payable to policy
 Non-life technical account item 1.1 (c)                         holders and other insured parties or provided for their
                                                                 benefit, including amounts used to increase technical
                                                                 provisions or applied to the reduction of future pre-
 Life technical account item II. 1 (c)                           miums, to the extent that such amounts represent an
                                                                 allocation of surplus or profit arising on business as a
 Change in provision for unearned premiums, net of               whole or a section of business, after deduction of
 reinsurance                                                     amounts provided in previous years which are no longer
                                                                 required.
 The change in the provision for unearned premiums,
 net of reinsurance, shall comprise the difference               Rebates shall comprise such amounts to the extent that
 between the provision for unearned premiums at the               they represent a partial refund of premiums resulting
 beginning of the financial year and at its end, and shall        from the experience of individual contracts.
 not include the change in the provision for unexpired
 risks. Pending further coordination, Member States may           Where material, the amount charged for bonuses and
 in the case of life insurance require or permit the change       that charged for rebates shall be distinguished in the
 in unearned premiums to be included in the change in             notes on the accounts.
 the life insurance provision.
                                                                                         Article 35
                           Article 33
 Non-life technical account: item 1.3                             Non-life technical account: item 1.6 (a)
                                                                                     i
 Life technical account: item II.9                                Life technical account: item 11.12 (a)
 Claims incurred                                                  Commissions
 ---pagebreak--- 18. 5. 87                            Official Journal of the European Communities                            N o C 131/15
Commissions shall comprise all amounts paid or pay-                                     Article 38
able in respect of insurance contracts which constitute
a fee paid, otherwise than by virtue of a contract of          Life technical account: item II
employment, for services rendered in respect of business
introduced to the insurance undertaking. They include
amounts paid to agents and brokers but exclude                 Investment income, etc.
amounts paid to employees (such as members of the
direct sales force) acting in the ordinary course of their     1.     In the case of an undertaking carrying on only life
service to the undertaking.                                    insurance business, all investment income and charges
                                                               and profits and losses on the realization of investments
                                                               shall be disclosed in the technical account for life
                         Article 36                            insurance business.
Non-life technical account: item 1.6 (b)                       2.     In the case of an undertaking carrying on both
                                                               life insurance and non-life insurance business, all invest-
                                                               ment income and charges and profits and losses on the
Life technical account: item 11.12 (b)
                                                               realization of investments shall to the extent that they
                                                               are directly connected with the carrying-on of the life
Administrative expenses                                        insurance business be disclosed in the technical account
                                                               for life insurance business.
Administrative expenses shall include in particular
value adjustments on tangible assets other than land           3.     That part of the investment income and charges
and buildings and all staff costs, including commissions       and of profits and losses on the realization of invest-
paid to employees acting in the ordinary course of their       ments disclosed in the technical account for life
service to the undertaking, with the exception of staff        insurance business which is not used or set aside for
costs incurred in connection with claims settlement            the benefit of policy holders and insured parties may
and those that are properly charged under investment           be allocated in whole or in part to the non-technical
expenses.                                                      account, the amount allocated being deducted at item
                                                               11.20 and added at item III.9. The reason for the allo-
                                                               cation and the basis on which it is made must be
                         Article 37                            disclosed in the notes on the accounts.
Non-life technical account: item 1.10
                                                                                        Article 39
Non-technical account: item III. 10
                                                               Life technical account: items II.6 and 16
Allocation of part of investment return to the non-life
technical account                                              Unrealized gains and losses in life insurance business
Where part of the investment return is allocated to the        Variations in the amount of the difference between the
technical account for non-life-insurance business, the         valuation of investments in accordance with current
transfer from the non-technical account shall be deduct-       value and their valuation in accordance with the prin-
ed at item 111.10 and added at item 1.10. The reason for       ciple of purchase price or production cost shall be
the allocation and the basis on which it is made must          shown at items II.6 and 16 only to the extent that
be disclosed in the notes on the accounts.                     Article 43 (2) applies.
                                                        SECTION 7
                                                     Valuation rules
                         Article 40                             of insurance in question, information about premiums
                                                                receivable, claims payable, or both, for the underwriting
1.    Pending further coordination Member States may            year is insufficient at the time at which the annual
require or permit the application of the following              accounts are drawn up to enable accurate estimates to
methods where, owing to the nature of the class or type         be made.
 ---pagebreak--- No C 131/16                           Official Journal of the European Communities                                  18. 5. 87
                          Method 1                              the insurance contracts in the class or type of insurance
                                                                in question commenced.
The excess of the premiums received over the claims
and expenses paid in respect of contracts commencing                                      Article 41
in the underwriting year forms a technical provision,
which in accordance with Article 24 (2) is included in          Article 32 of Directive 78/660/EEC, which provides that
the technical provision for claims outstanding shown            the valuation of items shown in the annual accounts
in the balance sheet at 'Liabilities' item C 3. The amount      shall be based on the principle of purchase price or
of this technical provision is if necessary increased to        production cost, shall in its application to investments
make it sufficient to meet present and future obli-             be subject to Articles 42 to 45 of this Directive.
gations. No amount in respect of the contracts in ques-
tion is included in the technical provisions for unearned                                 Article 42
premiums and unexpired risks referred to respectively
in Articles 21 and 22. The technical provision formed           1. As regards the valuation of investments shown in
in accordance with this method is replaced by a pro-            Article 5 under 'Assets' item C Member States may
vision for claims outstanding estimated in the usual            require or permit insurance undertakings to apply cur-
manner at the end of the year following the underwrit-          rent value calculated in accordance with Articles 44 and
ing year or at the end of a later year.                         45.
                                                                2.     Where in life insurance business the benefits pro-
                          Method 2                              vided to policy holders and insured parties are related
                                                                to the current value of particular investments or invest-
                                                                ments as a whole, those investments shall be shown in
The rules of Method 1 apply, except that the technical          the balance sheet at current value.
provision referred to in the first sentence of the descrip-
tion of that method is calculated as a particular percent-      3.     Where the principle of purchase price or pro-
age of the premiums receivable.                                 duction cost referred to in Article 32 of Directive 78/
                                                                660/EEC is applied to investments, the current value
                                                                shall be disclosed in the notes on the accounts.
                          Method 3                              4.     Where investments are shown at current value,
                                                                the value resulting from the application of the principle
                                                                of purchase price or production cost shall be disclosed
The figures shown in the whole of the technical account          in the notes on the accounts.
or at certain items within it relate to a year which
wholly or partly precedes the financial year.                   5.     The same basis shall be applied to all investments
The amount of the technical provisions shown in the              included in any item denoted by an arabic number.
annual accounts is if necessary increased to make them
sufficient to meet present and future obligations.               6.    The method applied to each item of investments
                                                                 shall be disclosed in the notes on the accounts.
2.     Where a method referred to in paragraph 1 is
adopted, it shall be applied systematically in successive                                 Article 43
years unless circumstances justify a change. The use of
any such method shall be disclosed in the notes on the           1. Where current value is applied to investments,
accounts together with an explanation of the reasons             Article 33 (2) and (3) of Directive 78/660/EEC shall
for it and a statement of its effect on the assets, liabilit-    apply, except as provided in paragraph 2.
ies, financial position and profit or loss, with particular
reference to its effect on the provisions for unearned           2.    In the case described in Article 42 (2), the amount
premiums and claims outstanding. Where Methods 1                 of the difference between valuation in accordance with
or 2 are used, the length of time that elapses before a          current value and valuation in accordance with the
provision for claims outstanding is created on the usual         principle of purchase price or production cost shall be
basis shall be disclosed in the notes on the accounts.           entered in" the life insurance provisions in Article 5 at
Where Method 3 is used, the length of time by which              'Liabilities' item C. 2. Variations in this difference shall
the year to which the figures relate precedes the finan-         be disclosed in the technical account for life insurance
cial year shall be disclosed in the notes on the accounts.       business at Article 29, items II.6 and 16.
                                                                                          Article 44
3.     Where Methods 1 or 2 are used, a provision for
claims outstanding shall be created on the usual basis            1. In the case of investments other than land and
not later than the end of the third year following the           buildings, current value shall mean market value, save
underwriting year. Where Method 3 is used, the length            as provided in paragraph 6.
of time by which the year to which the figures relate
precedes the financial year shall not exceed 12 months.          2.    Where investments are quoted on a recognized
                                                                  stock exchange, market value shall mean the middle
4.     For the purposes of this Article the expression            market value on the balance sheet date or on the last
 'underwriting year' means the financial year in which           day of trading preceding that date.
 ---pagebreak--- 18. 5. 87                            Official Journal of the European Communities                              N o C 131/17
3.     Where an active market exists for investments           5.      Where at the date at which the accounts are drawn
other than those referred to in paragraph 2, the market        up land and buildings have been sold or there is an
value shall mean the average figure at which such              intention to sell them within the short term, the value
investments were traded on the balance sheet date or           arrived at in accordance with paragraphs 2 and 4 shall
the last day of trading preceding that date.                   be reduced by the incurred or estimated realization
                                                               costs.
4.     Where the application of a method referred to in        6.      Where it is impossible to determine the market
paragraphs 2 and 3 produces a figure for particular            value of an item of land and buildings, the value arrived
investments which, owing to exceptional circumstances          at on the basis of the principle of purchase price or
at the date in question, is materially higher than the         production cost shall be treated as the current value.
figure which would have been obtained in the absence
of those circumstances, the latter figure shall be taken       7.      In all cases the method by which current value
as the market value.                                           has been arrived at and the year or years in which
                                                               valuations were last carried out in accordance with
                                                               paragraph 3 shall be disclosed in the notes on the
5.     Where at the date at which the accounts are drawn       accounts.
up investments referred to in paragraphs 2 or 3 have
been sold or there is an intention to sell them within
the short term, the market value shall be reduced by                                     Article 46
the incurred or estimated realization costs.
                                                               1.      Article 33 of Directive 78/660/EEC shall apply to
                                                               insurance undertakings in the following manner:
6.     Except where the equity method is applied in
accordance with Article 59 of Directive 78/660/EEC,            (a) references to 'tangible fixed assets' shall be con-
all other investments shall be valued on a basis which              strued as references to assets listed under 'Assets'
has prudent regard to the likely realizable value.                  C.II.2, 3 and 4 in Article 9 of Directive 78/660/EEC;
                                                               (b) the reference to 'stocks' shall be construed as a
                                                                    reference to assets shown in this Directive at Article
7.     In all cases the precise method of valuation and             5, 'Assets' item E.2.
the reason for adopting it shall be disclosed in the notes
on the accounts.                                               2.      Subject to Article 43 of this Directive, Article 33
                                                               of Directive 78/660/EEC shall not apply to investments
                                                               which are financial fixed assets within the meaning of
                                                               'Assets' C.III of Article 9 of Directive 78/660/EEC.
                          Article 45
 1.    Except as provided in paragraph 6, current value                                   Article 47
in the case of land and buildings shall mean the market
value determined at the date of valuation, reduced as          The application of Article 35 of Directive 78/660/EEC
provided in paragraphs 4 and 5.                                 to insurance undertakings shall be subject to the follow-
                                                                ing modifications:
 2.    Market value shall mean the price at which the           (a) references to 'fixed assets' shall be construed as
 land and buildings could be sold under private contract             references to assets shown in this Directive at Article
 between a willing seller and an arm's length buyer at               5, 'Assets' items B, C and E.l;
 the date of valuation, it being assumed that the property
 is publicly exposed to the market, that market con-            (b) references to 'financial fixed assets' shall be con-
 ditions permit orderly disposal and that a normal per-              strued as references to assets shown in this Directive
 iod, having regard to the nature of the property, is                at Article 5, 'Assets' items C.II, III, IV, V and VI.
 available for the negotiation of the sale.
                                                                                          Article 48
 3.     The market value shall be determined through the
 separate valuation of each item of land and buildings          In Article 38 of Directive 78/660/EEC the reference to
 carried out not less frequently than every five years by       tangible fixed assets, raw materials and consumables
 persons approved for the purpose by the Member State           shall, as regards insurance undertakings, be construed
 in which the head office of the insurance undertaking          as a reference to assets shown in this Directive at Article
 is situated.                                                   5, 'Assets' item E.
 4.     Where the value of any item of land and buildings                                 Article 49
 has diminished at the balance sheet date, the appropri-
  ate value adjustment shall be made. The lower value            For the application of Article 39 of Directive 78/660/
  thus arrived at shall not be increased in subsequent           EEC to insurance undertakings the reference to current
  balance sheets unless such increase results from a new         assets shall be construed as a reference to assets shown
  determination of market value arrived at in the con-           in this Directive at Article 5, 'Assets' items D. 1, 2 and
  ditions prescribed in paragraphs 2 and 3.                      3 and F.
 ---pagebreak--- No C 131/18                          Official Journal of the European Communities                                18. 5. 87
                         Article 50                                                    Article 54
In non-life insurance fhe amount of deferred acquisition       The provision for unexpired risks shall be computed
costs shall be established on a basis consistent with that     on the basis of the probable claims arising from events
followed for unearned premiums.                                after the end of the financial year from contracts con-
                                                               cluded before the date, in so far as they exceed the
                                                               provision for unearned premiums.
In life insurance the calculation of the amount of acqui-
sition costs to be deferred may form part of the actuarial
calculation referred to in Article 55.
                                                                                       Article 55
                         Article 51                            The life insurance provision shall be computed separ-
                                                               ately for each insurance contract. Approximate
Subject to Article 42, debt securities included under          methods may however be used where they are likely to
Article 5, 'Assets' items C. II and III, shall be shown in     give approximately the same results as the individual
the balance sheet at purchase price. The Member States         calculations. A computation must be made annually
may, however, permit or require debt securities to be          under the responsibility of an actuary on the basis
shown in the balance sheet at the amount repayable at          of recognized actuarial methods. A summary of the
maturity.                                                      principal assumptions must be disclosed in the notes
                                                               on the accounts.
Where the purchase price of such debt securities exceeds
the amount repayable at maturity, the amount of the
difference must be charged to the profit and loss
account. The amount of the difference may however
be written off in instalments so that it is completely                                 Article 56
written off no later than the time of repayment of the
debt securities. The difference must be shown separately       1.    The provisions for claims outstanding shall in
in the balance sheet or in the notes on the accounts.          principle be calculated case by case, but statistical
                                                               methods may be used if they result in an adequate
                                                               provision having regard to the nature of the risks. For
Where the purchase price of such debt securities is less       the calculation of claims incurred but not reported,
than the amount repayable at maturity, the Member              regard shall be had to past experience and all other
States may permit or require the amount of the differ-         relevant factors.
ence to be released to income in instalments during the
period remaining until repayment. The difference must
be shown separately in the balance sheet or in the notes       2.    External and internal direct and indirect claims
on the accounts.                                               settlement costs shall be taken into account when calcu-
                                                               lating the provision.
                                                               3.    Where in calculating the provision account is
                                                               taken of estimated amounts receivable as a result of
                         Article 52                            obtaining the legal ownership of insured property or
                                                               acquiring the rights of the policy holder against third
                                                               parties in connection with the settlement of a claim
The amount of technical provisions shall be such as to
                                                               (salvage and subrogation), a prudent basis shall be
ensure that all liabilities arising out of insurance con-
                                                               adopted. Where such amounts are material they shall
tracts can be met by the insurance undertaking.
                                                               be disclosed in the notes on the accounts.
                                                               4.    Where in non-life insurance benefits resulting
                                                               from a claim have to be paid in the form of an annuity,
                                                               the amounts to be provided for this purpose shall be
                         Article 53
                                                               calculated actuarially and included in the provision for
                                                               claims outstanding.
The provision for unearned premiums shall be comput-
ed for each individual contract and pro rata temporis
by reference to the proportion of the period covered by        5.    Where, apart from cases in which the benefits have
the contract which extends over a period following the         to be calculated actuarially, a deduction is exceptionally
end of the financial year. Member States may permit            made in respect of investment income which may be
the use of flat-rate methods where they are likely to          attributable to the provisions for particular claims
give approximately the same results as the individual          because of the expected delay in settlement, such deduc-
calculations. If the nature of risks is such that the pro      tion shall be calculated on an actuarial basis. Where
rata temporis method does not reflect the expected risk        such discounting is adopted it must be disclosed in the
experience, appropriate adjustments shall be made.             notes on the accounts together with an explanation of
 ---pagebreak--- 18. 5. 87                              Official Journal of the European Communities                             N o C 131/19
the reasons for it and a statement of its effects on the                                   Article 57
assets, liabilities, financial position and profit or loss.
Implicit discounting, whether resulting from the placing
of a present-day value on a provision for an outstanding          Pending further coordination those Member States
claim which is expected to be settled later at a higher           which require the formation of equalization provisions
figure, or otherwise brought about, is not permissible.           shall prescribe the valuation rules to be applied to them.
                                                          SECTION 8
                                            Contents of the notes on the accounts
                          Article 58                              — as regards life insurance, firstly as between direct
                                                                       insurance and acceptances of reinsurance, if such
1.     In place of the information required by Article 43              acceptances amount to at least 10% of total life
(1) (8) of Directive 78/660/EEC, insurance undertakings                insurance gross premiums, and then within each of
shall indicate, in the notes on the accounts, gross pre-               those categories to indicate:
miums within the meaning of Article 30 of this Direc-                  — periodic premiums,
tive, broken down by categories of activity and into                   — single premiums, including annuity consider-
geographical markets as follows:                                            ations,
                                                                       — premiums under group contracts,
— as regards non-life insurance, firstly as between                    — premiums for contracts under which the policy
    direct insurance and acceptances of reinsurance, and                    holders bear the investment risk
    then within each of those categories between:
                                                                       except that disclosure under any of these headings
                                                                       is not necessary if it accounts for less than 10 % of
    — accident and health,
                                                                       the life gross premiums in direct insurance or in
                                                                       reinsurance respectively;
    — motor,
                                                                  — as regards both non-life and life insurance, the total
    — marine, aviation and transport,                                  gross premiums resulting from contracts concluded
                                                                       by the insurance undertaking in each Member State
    — fire and other damage to property,                               or other country in which it has an establishment
                                                                       (head office, branch or agency), except that such
    — liability,                                                       disclosure is not necessary where the figure for any
                                                                       particular Member State or other country accounts
                                                                       for less than 5 % of the total gross premiums.
    — credits and suretyship,
                                                                  2.     The reference in Article 43 (1) (10) of Directive
    — legal expenses,                                             78/660/EEC to Articles 31 and 34 to 42 thereof shall be
                                                                   construed as a reference to those Articles as modified
    — assistance,                                                  for the purposes of their application to insurance under-
                                                                   takings by the provisions of this Directive.
    — miscellaneous,
                                                                   3.     Insurance undertakings shall indicate, in the notes
     except that disclosure under any of these headings            on the accounts, assets shown respectively under items
     is not necessary if it accounts for less than 10 % of         C.III.l (shares) and C.III.2 (debt securities) of Article 5
     the non-life gross premiums in direct insurance or            broken down between quoted and unquoted invest-
     in reinsurance respectively;                                  ments.
                                                           SECTION 9
                                         Provisions relating to consolidated accounts
                           Article 59
 1.    Insurance undertakings shall draw up consolidat-            2.     In so far as a Member State does not make use of
ed accounts and a consolidated annual report in accord-            Article 5 of Directive 83/349/EEC, paragraph 1 shall
ance with Directive 83/349/EEC, in so far as this section          also apply to parent undertakings the sole object of
does not provide otherwise.                                        which is to acquire holdings and turn them to profit,
 ---pagebreak--- No C 131/20                           Official Journal of the European Communities                                  18. 5. 87
where those subsidiary undertakings are either exclus-           3. For the purposes of the layout of consolidated
ively or mainly insurance undertakings.                               accounts, the reference in Article 17 to Articles 9
                                                                      and 10 (balance sheet) and 23 to 26 (profit and loss
                                                                      account) of Directive 78/660/EEC shall be deemed
                          Article 60                                  to be a reference to Articles 5 (balance sheet) and 29
                                                                      (profit and loss account) of this Directive. Articles 4,
Directive 83/349/EEC shall apply subject to the follow-               7 to 27, 28 and 30 to 39 of this Directive shall also
ing provisions:                                                       apply.
1. Articles 4, 6, 15 and 40 shall not apply;                     4. For the purposes of valuing assets and liabilities to
                                                                      be included in consolidated accounts, the reference
2. The information referred to in the first two indents               in Articles 29 and 33 to Articles 31 to 42 and 60
     of Article 9 (2), namely:                                        of Directive 78/660/EEC shall be deemed to be
     — the amount of the fixed assets,                                a reference to those Articles as amended in their
         and                                                          application by Articles 40 to 57 of this Directive.
     — net turnover                                              5. Article 34 shall apply in respect of the contents of
     shall be replaced by 'Gross premiums written' as                 the notes on consolidated accounts, suject to Article
     defined in Article 30 of this Directive.                         58 of this Directive.
                                                        SECTION 10
                                                         Publication
                           Article 61                             and the opinions submitted by the persons responsible
                                                                  for auditing the accounts.
 1. The duly approved annual accounts of insurance
 undertakings, together with the annual reports and the
 opinion of the persons responsible for auditing the
 accounts shall be published as laid down by the laws
 of each Member State in accordance with Article 3 of            3.     Where an insurance undertaking which has drawn
 First Council Directive 68/151/EEC of 9 March 1968              up annual accounts or consolidated accounts is not
 on coordination of safeguards which for the protection          established as one of the types of company listed in
 of the interests of members and others, are required by         Article 1 (1) of Directive 78/660/EEC and is not required
 Member States of companies within the meaning of the             by its national law to publish the documents referred
 second paragraph of Article 58 of the Treaty, with a             to in paragraphs 1 and 2 as prescribed in Article 3
 view to making such safeguards equivalent throughout             of Directive 68/151/EEC, it must at least make them
 the Community (1).                                               available to the public at its registered office. It must
 The laws of a Member State may, however, permit the              be possible to obtain copies of such documents on
 annual report not to be published as stipulated above.           request. The price of such copies must not exceed their
 In that case, it shall be made available to the public at        administrative cost.
 the company's registered office in the Member State
 concerned. It must be possible to obtain a copy of all
 or part of any such report upon request. The price of
 such a copy must not exceed its administrative cost.
                                                                  4.     Member States shall provide for appropriate sanc-
 2.    Paragraph 1 shall also apply to the duly approved          tions for failure to comply with the publication rules
 consolidated accounts, the consolidated annual reports           laid down in this Article.
                                                        SECTION 11
                                                      Final provisions
                          Article 62                              (a) to facilitate, without prejudice to Articles 169 and
                                                                      170 of the Treaty, harmonized application of this
The Contact Committee established in accordance with                  Directive through regular meetings dealing in par-
Article 52 of Directive 78/660/EEC shall, when consti-                ticular with practical problems arising in connection
tuted appropriately, also have the following functions:               with its application;
                                                                 (b) to advise the Commission, if necessary, on additions
 (!) OJ No L 65, 14. 3. 1968, p. 8.                                   or amendments to this Directive.
 ---pagebreak--- 18. 5. 87                         Official Journal of the European Communities                        N o C 131/21
                      Article 63                            3.    Member States shall ensure that they communi-
                                                            cate to the Commission the texts of the main provisions
1.    Member States shall bring into force the laws,        of national law which they adopt in the field covered
regulations and administrative provisions necessary for     by this Directive.
them to comply with this Directive before 1 Janu-
ary ... They shall forthwith inform the Commission
thereof.
2.    A Member State may provide that the provisions
referred to in paragraph 1 above shall first apply to                              Article 64
annual accounts and consolidated accounts for financial
years beginning on 1 January ... or during the calendar
year ... .                                                  This Directive is addressed to the Member States.