CELEX: 52013PC0680
Language: en
Date: 2013-10-02
Title: Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) as regards the dates of transposition and application and the date of repeal of certain Directives

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		52013PC0680
		
			Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) as regards the dates of transposition and application and the date of repeal of certain Directives /* COM/2013/0680 final - 2013/0327 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
1.1.        Grounds for and objectives
of the proposal
Directive 2009/138/EC (Solvency II) provides a
modern, risk-based system for the supervision of European insurance and
reinsurance undertakings. These new rules are essential in order to ensure a
safe and solid insurance sector that can provide sustainable insurance products
and support the real economy through long-term investments and additional
stability. 
Directive 2011/89/EU (Ficod1) amends certain
directives including Solvency II as regards the supplementary supervision of
financial entities in a financial conglomerate. 
On 19 January 2011 the Commission adopted a
proposal to amend Directive 2009/138/EC in order to take into account the new
supervisory architecture for insurance and namely the setting up of the
European Insurance and Occupational Pensions Agency (EIOPA) on 1 January 2011
(COM (2011) 8, COD 2011/0006)(Omnibus II) and the entry into force of the Lisbon
Treaty which required the adjustment of empowerments for the Commission to
adopt implementing measures to empowerments for the Commission to adopt
implementing and delegated acts according to Article 290 of the Treaty on the
Functioning of the European Union. The proposal also included provisions to
extend the transposition, repeal and application dates in Directive
2009/138/EC. These rules are important in order to ensure a smooth transition
to the new regime. In addition and in order to become fully operational, the
Solvency II regime also requires a high number of delegated and implementing
acts by the Commission, providing important details on different technical
matters. Many of these so-called "level 2" rules are closely linked
to Omnibus II and cannot be presented by the Commission before the publication
of Omnibus II, which will also clarify the scope of many delegated and
implementing act empowerments. 
The deadline for transposition and application
of Directive 2009/138/EC was initially 31 October 2012 and 1 November 2012
respectively, but pending the outcome of the on-going legislative negotiations
on Omnibus II, Directive 2012/23/EU (Quick Fix) postponed these dates to 30
June 2013 and 1 January 2014 respectively. 
Directive 2012/23/EU also postpones the date when
the existing insurance and reinsurance directives (Directives 64/225/EEC,
73/239/EEC, 73/240/EEC, 76/580/EEC, 78/473/EEC, 84/641/EEC, 87/344/EEC,
88/357/EEC, 92/49/EEC, 98/78/EC, 2001/17/EC, 2002/83/EC and 2005/68/EC, as
amended by the acts listed in Part A of Annex VI) that are collectively
referred to as Solvency I will be repealed. Instead of 1 November 2012, those
directives will now be repealed with effect from 1 January 2014.
The most controversial issue in the on-going
legislative negotiations between the European Parliament, the Council and the
Commission is the introduction of measures on the treatment of insurance
products with long-term guarantees under the new Solvency II insurance
regulatory regime (“Long-term guarantee package” or LTG package). Since no
agreement on the LTG package could be achieved in September 2012, negotiations
were suspended. The European Parliament, the Council and the Commission then
mandated the European Insurance and Occupational Pensions Authority (EIOPA) to carry
out a technical assessment of the measures, in order to provide a technical
basis for a political agreement on Omnibus II.
On 14 June 2013 EIOPA published its technical
findings on the long-term guarantees assessment. These technical findings confirm firstly the importance of
long term guarantee measures for many Member States in periods of financial
stress such as those experienced in 2011 and secondly that a package of
different measures is needed to cater for the different insurance products
offered in Member States.The EIOPA findings propose a
number of measures intended to facilitate the provision of insurance products
with long-term guarantees against artificial financial market volatility. 
These findings constitute the parameters for a
political agreement on Omnibus II. According to the Commission report on 27
June 2013, it should be possible to find a compromise
within the scope of the measures that EIOPA recommends. Although legislative
negotiations between the European Parliament, the Council and the Commission
resumed on 10 July 2013, it is very unlikely that the negotiations on Omnibus
II will be concluded in time to publish the Omnibus II Directive in the
Official Journal before the date of application of Directive 2009/138/EC, as
amended by Directive 2012/23/EU. Leaving that date unchanged would result in
Directive 2009/138/EC being implemented before the entry into force of the
transitional rules and relevant adaptations provided for by the Omnibus II
proposal. 
In view of the fact that the negotiations on
Omnibus II have not yet been finalised the date of transposition of 30 June
2013, which has already elapsed, should be extended one last time. Leaving the
dates unchanged would imply that Solvency II needs to be implemented without
the transitional rules and other important adaptations foreseen in Omnibus II.
In order to avoid continued legal uncertainty and ensure the legal continuity
of the current Solvency provisions (Solvency I) until the complete Solvency II package
is in place, it is proposed that the relevant transposition date in Directive
2009/138/EC is extended one last time to 31 January 2015. 
It is important to allow supervisors and
insurance and reinsurance undertakings some time to prepare for the application
of Solvency II. It is therefore proposed to extend the date for first
application of Solvency II one last time to 1 January 2016. This will make it
possible to start the supervisory approval procedures e.g. for internal models
and undertaking specific parameters. The parties to the on-going legislative
negotiations have agreed that there should be no further changes to either the
transposition or application dates during the Omnibus II negotiations in order
to ensure legal clarity for insurance and reinsurance undertakings supervisory
authorities during their preparations.
It is evident from the chronological order of
events that the postponed dates for transposition and application of Directive
2009/138/EC also apply to the amendments to Articles 212 to 216, 219, 226, 231,
233, 235, 243 to 247, 249, 256, 257, 258, 262 and 263 of that Directive which
were made by Directive 2011/89/EC.
The date of repeal of Solvency I should be
amended accordingly.
In view of the above and given the very short
period of time left before 1 January 2014, this Directive should be adopted by
the European Parliament and the Council as a matter of urgency and enter into
force without delay.
This Directive is necessary in order to prevent
a legal vacuum arising after 1 January 2014.
The absence of this Directive would result in a
gap between the EU legal system (Solvency II) and that of Member States (where
Solvency I as transposed would remain in force). This would lead to legal
uncertainty for supervisory authorities, undertakings and Member States. 
1.2.        Directive 2009/138/EC (Solvency
II)
This Directive establishes a new and modern
solvency regime for insurers and reinsurers in the European Union. It provides
for an economic, risk-based approach which provides incentives for insurance
and reinsurance undertakings to properly measure and manage their risks.
1.3.        Directive 2011/89/EC
(Ficod1)
This Directive amends certain directives
including Directive 2009/138/EC as regards the supplementary supervision of
financial entities in a financial conglomerate. Article 4 of Directive 2011/89/EC
amends the Articles 212 - 216, 219, 226, 231, 233, 235, 243 – 247, 249, 256,
257 258, 262 and 263 of Directive 2009/138/EC and Article 6 of Directive
2011/89/EC prescribes that Member States shall be in compliance with these new
provisions from 10 June 2013.
1.4.        Directive
2012/23/EU (Quick Fix)
This Directive amends Directive 2009/138/EC and
postpones the date for its transposition from 31 October 2012 to 30 June 2013, inserts
the date of its application from 1 January 2014 and
postpones the date of repeal of Solvency I from 1 November 2012 to 1 January
2014.
1.5.        Proposal COM (2011) 8 (the
Omnibus II Directive)
This proposal aims to amend Directive
2009/138/EC in order to adapt Solvency II to the new supervisory architecture
for insurance and namely the setting-up of the European Insurance and
Occupational Pensions Authority (EIOPA) on 1 January 2011 (COM (2011) 8, COD
2011/0006). It proposes to postpone the transposition deadline of Solvency II
to 31 December 2012.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
2.1.        Transmission of this
proposal to the national parliaments
Draft legislative acts, including proposals
from the Commission, sent to the European Parliament and to the Council must be
forwarded to national parliaments in accordance with the Protocol (No 1) on the
role of national Parliaments in the European Union, annexed to the Treaties.
According to Article 4 of the Protocol, an
eight-week period must elapse between a draft legislative act being made
available to national parliaments and the date when it is placed on a
provisional agenda for the Council for its adoption or for adoption of a
position under a legislative procedure.
However, exceptions are possible under Article
4 in cases of urgency, the reasons for which must be stated in the act or
position of the Council. The Commission invites the European Parliament and the
Council to consider this proposal as a case of absolute urgency for the reasons
explained above.
2.2.        Impact assessment
This proposal is not accompanied by a separate
Impact Assessment as an impact assessment for the Solvency II Directive has
already been undertaken and this proposal only aims at addressing the fact that
the publication of Omnibus II in the Official Journal of the European Union
will be later than the application date of 1 January 2014.
Doing nothing at this stage would create a very
uncertain legal situation after 1 January 2014. A gap would exist between the
EU legal system (Solvency II) and that of Member States (where Solvency I as
transposed would remain in force). This would lead to legal uncertainty for
supervisory authorities, undertakings and Member States.
The Framework Directive would need to be
implemented without the transitional rules and other important adaptations
foreseen in Omnibus II. Consequently, supervisory authorities, undertakings and
Member States would have to proceed with implementing a regime that would need
to be revised again in the very near future, which would not be efficient. 
The proposed amendment affects only the
obligation on Member States to transpose by the Directive by 30 June 2013,
extending it to 31 December 2014. It also foresees the extension of the application
of the Solvency II Directive from 1 January 2014 to 1 January 2016 (and the
same extension for the date of repeal of Solvency I). It does not alter the
substance of the Directive in question and does not therefore impose any
additional obligations on businesses.
3.           LEGAL ELEMENTS OF THE PROPOSAL
3.1.        Summary of the proposed measures
The proposal amends Article 309(1) of Directive
2009/138/EC by setting up later dates for its transposition (31 January 2015)
and its application (1 January 2016). It also amends Articles 310 and 311
accordingly by setting-up a new date for the repeal of Solvency I (1 January
2016).
3.2.        Legal basis
Articles 53 (1) and 62 of the Treaty on the
Functioning of the European Union.
3.3.        Subsidiarity principle
The subsidiarity principle applies as the
proposal concerns a field which does not fall within the exclusive competence
of the European Union.
The objectives of the proposal cannot be
achieved sufficiently by the Member States, as the provisions of directives
cannot be amended or repealed at national level.
The objectives of the proposal can be achieved
only by EU action, as this proposal amends an act of EU law which is in force,
and this is something which cannot be done by the Member States themselves.
The principle of subsidiarity is complied with
in that the proposal amends existing EU legislation.
3.4.        Proportionality principle
The proposal complies with the proportionality
principle for the following reason.
It does not alter the substance of the current
EU legislation: it is restricted to postponing the date of transposition of
Directive 2009/138/EC until 31 January 2015; in order to avoid continued legal
uncertainty now that the current deadline for transposition (30 June 2013) has
expired. It also provides for a new, later application date for Solvency II and
consequent repeal of Solvency I (1 January 2016).
3.5.        Choice of instruments
Proposed instrument(s): directive.
No other instrument would have been suitable.
As this is an amended directive, the only way forward is to adopt another
directive.
4.           BUDGETARY IMPLICATION
The proposal has no implication for the EU
budget.
5.           OPTIONAL ELEMENTS
·              
Simplification
The new proposal as such contains no
simplification elements. It is aimed solely at postponing the date for transposition
of Directive 2009/138/EC to 31 January 2015 and providing for a new application
date of 1 January 2016.
·              
Repeal of existing legislation
The adoption of the proposal will not in itself
entail the repeal of existing legislation; it merely adjusts the date of the
repeal already foreseen in Directive 2009/138/EC.
·              
European Economic Area
This draft instrument is concerned with a
subject covered by the EEA Agreement and must therefore be extended to cover
the European Economic Area.
·              
Detailed explanation of the proposal by
chapter or by article
This proposal postpones the date of transposition
of Directive 2009/138/EC to 31 January 2015.
Article 1(1) of the proposal amends Article
309(1) of Directive 2009/138/EC accordingly. It also provides for a new, later
date of application of Solvency II (1 January 2016). 
Article 1(2) amends the date of repeal of
Solvency I (from 1 January 2016) in Article 310 and Article 1(3) provides for
the same date as date of application of the provisions of Solvency I re-casted
by Solvency II in Article 311.
2013/0327 (COD)
Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
amending Directive 2009/138/EC on the
taking-up and pursuit of the business of Insurance and Reinsurance (Solvency
II) as regards the dates of transposition and application and the date of
repeal of certain Directives
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 53(1) and
Article 62 thereof,
Having regard to the proposal from the European
Commission,
Acting in accordance with the ordinary
legislative procedure,
Whereas:
(1)       Directive
2009/138/EC of the European Parliament and of the Council[1] provides a modern, risk-based
system for the regulation and supervision of European insurance and reinsurance
undertakings. These new rules are essential in order to ensure a safe and solid
insurance sector that can provide sustainable insurance products and support
the real economy through long-term investments and additional stability.
(2)       Directive 2011/89/EU of the European Parliament and of the Council[2] introduces
some changes to Articles 212 to 262 of Directive
2009/138/EC to be introduced from 10 June 2013. 
(3)       Directive
2012/23/EU of the European
Parliament and of the Council[3]
postpones the date for transposition of Directive 2009/138/EC from 31 October
2012 to 30 June 2013, the date of
application from 1 November 2012 to 1 January 2014 and the date of repeal of
the existing insurance and reinsurance Directives, namely Council Directive
64/225/EEC[4],
First Council Directive 73/239/EEC[5],
Council Directive 73/240/EEC[6],
Council Directive 76/580/EEC[7],
Council Directive 78/473/EEC[8],
Council Directive 84/641/EEC[9],
Council Directive 87/344/EEC[10],
Second Council Directive 88/357/EEC[11],
Council Directive 92/49/EEC[12],
Directive 98/78/EC of the European Parliament and of the Council[13], Directive 2001/17/EC of the
European Parliament and of the Council[14],
Directive 2002/83/EC of the European Parliament and of the Council[15] and Directive 2005/68/EC of
the European Parliament and of the Council [16] (collectively referred to as 'Solvency I') from 1 November 2012 to 1
January 2014.
(4)       On
19 January 2011 the Commission adopted a proposal for a
Directive of the European Parliament and of the Council amending Directives
2003/71/EC and 2009/138/EC (hereinafter
referred to as the 'Omnibus II proposal')[17] in order to take into account
the new supervisory architecture for insurance and namely the setting-up of the European Supervisory Authority
(European Insurance and Occupational Pensions Authority (EIOPA). The Omnibus II proposal also
serves as
a means to adapt Directive 2009/138/EC to the entry into force of the Treaty on the
Functioning of the European Union by adjusting the empowerments for the
Commission to adopt implementing measures to empowerments for the Commission to
adopt implementing and delegated acts.
(5)       There
is a clear risk that there is not enough time to adopt the
Omnibus II proposal and publish it in the Official Journal of the European Union before
the relevant Articles of Directive
2009/138/EC are to apply. Leaving the dates for transposition, application and repeal unchanged
would result in Directive 2009/138/EC being implemented before the entry into
force of the transitional rules and of relevant adaptations, including further
clarification of delegated and implementing act empowerments, provided for by the Omnibus II proposal. 
(6)       In
order to avoid overly burdensome legislative obligations for Member States
under Directive 2009/138/EC and later on under the new framework envisaged by the Omnibus II proposal, it is
appropriate to postpone the dates for transposition and application of
Directive 2009/138/EC and allowing supervisors and insurance and reinsurance
undertakings sufficient time for the introduction of the new architecture. 
(7)       It is evident from the
chronological order of events that the postponed dates for transposition and
application of Directive 2009/138/EC also apply to the amendments to Articles
212 to 216, 219, 226, 231, 233, 235, 243 to 247, 249, 256, 257, 258, 262 and
263 of that Directive which were made by Directive 2011/89/EC.
(8)       For
reasons of legal certainty, the date of repeal of Directives 64/225/EEC, 73/239/EEC, 73/240/EEC 76/580/EEC, 78/473/EEC, 84/641/EEC,
87/344/EEC, 88/357/EEC, 92/49/EEC, 98/78/EC, 2001/17/EC, 2002/83/EC and
2005/68/EC should be postponed accordingly.
(9)       Given
the very short period of time left before the expiry of the deadlines laid down
in Directive 2009/138/EC, this Directive should enter into force without delay.
(10)     Consequently,
it is also justified to apply the exception for urgent cases provided for in
Article 4 of Protocol (No 1) on the role of national Parliaments in the
European Union in this case as regards the transmission to national Parliaments
of the proposal for this Directive,
HAVE ADOPTED THIS DIRECTIVE:
Article 1
Directive 2009/138/EC is amended as
follows:
1.           Article 309(1) is amended
as follows:
2.           (a)      in the first subparagraph,
the date of “30 June 2013” is replaced by that of “31 January 2015”
(b)     in the second subparagraph, the date of
“1 January 2014” is replaced by that of “1 January 2016”.
3.           In the first paragraph of Article
310, the date “1 January 2014” is replaced by that of “1 January 2016”.
4.           In the second paragraph of
Article 311, the date “1 January 2014” is replaced by that of “1 January 2016”.
Article 2
This Directive shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.
Article 3
This
Directive is addressed to the Member States.
Done at Brussels,
For the European Parliament                       For
the Council
The President                                                 The
President
[1]               Directive 2009/138/EC of the
European Parliament and of the Council of 25 November 2009 on the taking up and
pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ, L 335, 17.12.2009, p.1).
[2]               Directive 2011/89/EU of the
European Parliament and of the Council of 16 November 2011 amending Directives
98/78/EC, 2002/87/EC, 2006/48/RC and 2009/138/EC regarding
the supplementary supervision of financial entities in a financial conglomerate (OJ L 326, 8.12.2011, p. 113).
[3]               Directive 2012/23/EU of the European Parliament and of
the Council of 12 September 2012 amending Directive 2009/138/EC as regards the
date for its transposition and the date of its application, and the date of
repeal of certain Directives (OJ L
249, 14.9.2012, p. 1).
[4]               Council Directive 64/225/EEC of 25 February 1964 on
the abolition of restrictions on freedom of establishment and freedom to
provide services in respect of reinsurance and retrocession (OJ 56, 4.4.1964,
p. 878/64).
[5]               First Council Directive 73/239/EEC of 24 July 1973 on
the coordination of laws, regulations and administrative provisions relating to
the taking-up and pursuit of the business of direct insurance other than life
assurance (OJ L 228, 16.8.1973, p. 3).
[6]               Council Directive 73/240/EEC of 24 July 1973
abolishing restrictions on freedom of establishment in the business of direct
insurance other than life assurance (OJ L 228, 16.8.1973, p. 20).
[7]               Council Directive 76/580/EEC of 29 June 1976 amending
Directive 73/239/EEC (OJ L 189, 13.7.1976, p. 13).
[8]               Council Directive 78/473/EEC of 30 May 1978 on the
coordination of laws, regulations and administrative provisions relating to
Community co-insurance (OJ L 151, 7.6.1978, p. 25).
[9]               Council Directive 84/641/EEC of 10 December 1984
amending, particularly as regards tourist assistance, the First Directive
(73/239/EEC) (OJ L 339, 27.12.1984, p. 21).
[10]             Council Directive 87/344/EEC of 22 June 1987 on the
coordination of laws, regulations and administrative provisions relating to
legal expenses insurance(OJ L 185, 4.7.1987, p. 77).
[11]             Second Council Directive 88/357/EEC of 22 June 1988 on
the coordination of laws, regulations and administrative provisions relating to
direct insurance other than life assurance and laying down provisions to
facilitate the effective exercise of freedom to provide services (OJ L 172,
4.7.1988, p. 1).
[12]             Council Directive 92/49/EEC of 18 June 1992 on the
coordination of laws, regulations and administrative provisions relating to
direct insurance other than life assurance (third non-life insurance Directive)
(OJ L 228, 11.8.1992, p. 1).
[13]             Directive 98/78/EC of the European Parliament and of
the Council of 27 October 1998 on the supplementary supervision of insurance
undertakings in an insurance group(OJ L 330, 5.12.1998, p. 1).
[14]             Directive 2001/17/EC of the European Parliament and of
the Council of 19 March 2001 on the reorganisation and winding-up of insurance
undertakings (OJ L 110, 20.4.2001, p. 28).
[15]             Directive 2002/83/EC of the European Parliament and of
the Council of 5 November 2002 concerning life assurance (OJ L 345, 19.12.2002,
p. 1).
[16]             Directive 2005/68/EC of the European Parliament and of
the Council of 16 November 2005 on reinsurance (OJ L 323, 9.12.2005, p. 1).
[17]             COM (2011) 8.