Commission of the European Communities v Federal Republic of Germany.
Date: 1986-12-04
21 IN THAT RESPECT , IT MUST BE ACKNOWLEDGED THAT AN INSURANCE UNDERTAKING OF ANOTHER MEMBER STATE WHICH MAINTAINS A PERMANENT PRESENCE IN THE MEMBER STATE IN QUESTION COMES WITHIN THE SCOPE OF THE PROVISIONS OF THE TREATY ON THE RIGHT OF ESTABLISHMENT , EVEN IF THAT PRESENCE DOES NOT TAKE THE FORM OF A BRANCH OR AGENCY , BUT CONSISTS MERELY OF AN OFFICE MANAGED BY THE UNDERTAKING ' S OWN STAFF OR BY A PERSON WHO IS INDEPENDENT BUT AUTHORIZED TO ACT ON A PERMANENT BASIS FOR THE UNDERTAKING , AS WOULD BE THE CASE WITH AN AGENCY . IN THE LIGHT OF THE AFOREMENTIONED DEFINITION CONTAINED IN THE FIRST PARAGRAPH OF ARTICLE 60 , SUCH AN INSURANCE UNDERTAKING CANNOT THEREFORE AVAIL ITSELF OF ARTICLES 59 AND 60 WITH REGARD TO ITS ACTIVITIES IN THE MEMBER STATE IN QUESTION .
25 ACCORDING TO THE WELL-ESTABLISHED CASE-LAW OF THE COURT , ARTICLES 59 AND 60 OF THE EEC TREATY BECAME DIRECTLY APPLICABLE ON THE EXPIRY OF THE TRANSITIONAL PERIOD , AND THEIR APPLICABILITY WAS NOT CONDITIONAL ON THE HARMONIZATION OR THE COORDINATION OF THE LAWS OF THE MEMBER STATES . THOSE ARTICLES REQUIRE THE REMOVAL NOT ONLY OF ALL DISCRIMINATION AGAINST A PROVIDER OF A SERVICE ON THE GROUNDS OF HIS NATIONALITY BUT ALSO ALL RESTRICTIONS ON HIS FREEDOM TO PROVIDE SERVICES IMPOSED BY REASON OF THE FACT THAT HE IS ESTABLISHED IN A MEMBER STATE OTHER THAN THAT IN WHICH THE SERVICE IS TO BE PROVIDED .
27 THE COURT HAS NEVERTHELESS ACCEPTED , IN PARTICULAR IN ITS JUDGMENTS OF 18 JANUARY 1979 ( JOINED CASES 110 AND 111/78 MINISTERE PUBLIC AND ANOTHER V VAN WESEMAEL AND OTHERS ( 1979 ) ECR 35 ) AND 17 DECEMBER 1981 ( CASE 279/80 WEBB , CITED ABOVE ), THAT REGARD BEING HAD TO THE PARTICULAR NATURE OF CERTAIN SERVICES , SPECIFIC REQUIREMENTS IMPOSED ON THE PROVIDER OF THE SERVICES CANNOT BE CONSIDERED TO BE INCOMPATIBLE WITH THE TREATY WHERE THEY HAVE AS THEIR PURPOSE THE APPLICATION OF RULES GOVERNING SUCH ACTIVITIES . HOWEVER , THE FREEDOM TO PROVIDE SERVICES , AS ONE OF THE FUNDAMENTAL PRINCIPLES OF THE TREATY , MAY BE RESTRICTED ONLY BY PROVISIONS WHICH ARE JUSTIFIED BY THE GENERAL GOOD AND WHICH ARE APPLIED TO ALL PERSONS OR UNDERTAKINGS OPERATING WITHIN THE TERRITORY OF THE STATE IN WHICH THE SERVICE IS PROVIDED IN SO FAR AS THAT INTEREST IS NOT SAFEGUARDED BY THE PROVISIONS TO WHICH THE PROVIDER OF A SERVICE IS SUBJECT IN THE MEMBER STATE OF HIS ESTABLISHMENT . IN ADDITION , SUCH REQUIREMENTS MUST BE OBJECTIVELY JUSTIFIED BY THE NEED TO ENSURE THAT PROFESSIONAL RULES OF CONDUCT ARE COMPLIED WITH AND THAT THE INTERESTS WHICH SUCH RULES ARE DESIGNED TO SAFEGUARD ARE PROTECTED .
29 IT FOLLOWS THAT THOSE REQUIREMENTS MAY BE REGARDED AS COMPATIBLE WITH ARTICLES 59 AND 60 OF THE EEC TREATY ONLY IF IT IS ESTABLISHED THAT IN THE FIELD OF ACTIVITY CONCERNED THERE ARE IMPERATIVE REASONS RELATING TO THE PUBLIC INTEREST WHICH JUSTIFY RESTRICTIONS ON THE FREEDOM TO PROVIDE SERVICES , THAT THE PUBLIC INTEREST IS NOT ALREADY PROTECTED BY THE RULES OF THE STATE OF ESTABLISHMENT AND THAT THE SAME RESULT CANNOT BE OBTAINED BY LESS RESTRICTIVE RULES .

( A ) THE EXISTENCE OF AN INTEREST JUSTIFYING CERTAIN RESTRICTIONS ON THE FREEDOM TO PROVIDE INSURANCE SERVICES
30 AS THE GERMAN GOVERNMENT AND THE PARTIES INTERVENING IN ITS SUPPORT HAVE MAINTAINED , WITHOUT BEING CONTRADICTED BY THE COMMISSION OR THE UNITED KINGDOM AND NETHERLANDS GOVERNMENTS , THE INSURANCE SECTOR IS A PARTICULARLY SENSITIVE AREA FROM THE POINT OF VIEW OF THE PROTECTION OF THE CONSUMER BOTH AS A POLICY-HOLDER AND AS AN INSURED PERSON . THIS IS SO IN PARTICULAR BECAUSE OF THE SPECIFIC NATURE OF THE SERVICE PROVIDED BY THE INSURER , WHICH IS LINKED TO FUTURE EVENTS , THE OCCURRENCE OF WHICH , OR AT LEAST THE TIMING OF WHICH , IS UNCERTAIN AT THE TIME WHEN THE CONTRACT IS CONCLUDED . AN INSURED PERSON WHO DOES NOT OBTAIN PAYMENT UNDER A POLICY FOLLOWING AN EVENT GIVING RISE TO A CLAIM MAY FIND HIMSELF IN A VERY PRECARIOUS POSITION . SIMILARLY , IT IS AS A RULE VERY DIFFICULT FOR A PERSON SEEKING INSURANCE TO JUDGE WHETHER THE LIKELY FUTURE DEVELOPMENT OF THE INSURER ' S FINANCIAL POSITION AND THE TERMS OF THE CONTRACT , USUALLY IMPOSED BY THE INSURER , OFFER HIM SUFFICIENT GUARANTEES THAT HE WILL RECEIVE PAYMENT UNDER THE POLICY IF A CLAIMABLE EVENT OCCURS .
32 THOSE SPECIAL CHARACTERISTICS , WHICH ARE PECULIAR TO THE INSURANCE SECTOR , HAVE LED ALL THE MEMBER STATES TO INTRODUCE LEGISLATION MAKING INSURANCE UNDERTAKINGS SUBJECT TO MANDATORY RULES BOTH AS REGARDS THEIR FINANCIAL POSITION AND THE CONDITIONS OF INSURANCE WHICH THEY APPLY , AND TO PERMANENT SUPERVISION TO ENSURE THAT THOSE RULES ARE COMPLIED WITH .
33 IT THEREFORE APPEARS THAT IN THE FIELD IN QUESTION THERE ARE IMPERATIVE REASONS RELATING TO THE PUBLIC INTEREST WHICH MAY JUSTIFY RESTRICTIONS ON THE FREEDOM TO PROVIDE SERVICES , PROVIDED , HOWEVER , THAT THE RULES OF THE STATE OF ESTABLISHMENT ARE NOT ADEQUATE IN ORDER TO ACHIEVE THE NECESSARY LEVEL OF PROTECTION AND THAT THE REQUIREMENTS OF THE STATE IN WHICH THE SERVICE IS PROVIDED DO NOT EXCEED WHAT IS NECESSARY IN THAT RESPECT .

( B ) THE QUESTION OF WHETHER THE PUBLIC INTEREST IS ALREADY PROTECTED BY THE RULES OF THE STATE OF ESTABLISHMENT
38 ON THE OTHER HAND , THE TWO DIRECTIVES DID NOT HARMONIZE THE NATIONAL RULES CONCERNING TECHNICAL RESERVES , IN OTHER WORDS FINANCIAL RESOURCES WHICH ARE SET ASIDE TO GUARANTEE LIABILITIES UNDER CONTRACTS ENTERED INTO AND WHICH DO NOT FORM PART OF THE UNDERTAKING ' S OWN CAPITAL RESOURCES . THE DIRECTIVES EXPRESSLY LEFT THE NECESSARY HARMONIZATION IN THAT RESPECT TO LATER DIRECTIVES . THUS UNDER DIRECTIVES 73/239 AND 79/267 IT IS FOR EACH COUNTRY IN WHICH BUSINESS IS CARRIED ON TO LAY DOWN RULES ACCORDING TO ITS OWN LAW FOR THE CALCULATION OF SUCH RESERVES AND FOR DETERMINING THE NATURE OF AND VALUING THE ASSETS WHICH REPRESENT SUCH RESERVES . THE ASSETS COVERING BUSINESS CONDUCTED IN THE MEMBER STATE IN WHICH THE SERVICE IS PROVIDED MUST BE LOCALIZED IN THAT STATE AND THEIR EXISTENCE MONITORED BY THE SUPERVISORY AUTHORITY OF THAT STATE , ALTHOUGH THE DIRECTIVES PROVIDE THAT THE STATE IN WHICH THE HEAD OFFICE IS SITUATED MUST VERIFY THAT THE BALANCE SHEET OF THE UNDERTAKING SHOWS EQUIVALENT AND MATCHING ASSETS TO THE UNDERWRITING LIABILITIES ASSUMED IN ALL THE COUNTRIES IN WHICH IT UNDERTAKES BUSINESS . THE ABOLITION OF THAT REQUIREMENT OF LOCALIZATION IS PROPOSED ONLY IN THE DRAFT FOR A SECOND DIRECTIVE WHICH CONCERNS IN PARTICULAR THE HARMONIZATION OF NATIONAL PROVISIONS RELATING TO TECHNICAL RESERVES .
39 IN THE COURSE OF THE PROCEEDINGS BEFORE THE COURT , THE GERMAN GOVERNMENT AND THE GOVERNMENTS INTERVENING IN ITS SUPPORT HAVE SHOWN THAT CONSIDERABLE DIFFERENCES EXIST IN THE NATIONAL RULES CURRENTLY IN FORCE CONCERNING TECHNICAL RESERVES AND THE ASSETS WHICH REPRESENT SUCH RESERVES . IN THE ABSENCE OF HARMONIZATION IN THAT RESPECT AND OF ANY RULE REQUIRING THE SUPERVISORY AUTHORITY OF THE MEMBER STATE OF ESTABLISHMENT TO SUPERVISE COMPLIANCE WITH THE RULES IN FORCE IN THE STATE IN WHICH THE SERVICE IS PROVIDED , IT MUST BE RECOGNIZED THAT THE LATTER STATE IS JUSTIFIED IN REQUIRING AND SUPERVISING COMPLIANCE WITH ITS OWN RULES ON TECHNICAL RESERVES WITH REGARD TO SERVICES PROVIDED WITHIN ITS TERRITORY , PROVIDED THAT SUCH RULES DO NOT EXCEED WHAT IS NECESSARY FOR THE PURPOSE OF ENSURING THAT POLICY-HOLDERS AND INSURED PERSONS ARE PROTECTED .
47 IT SHOULD HOWEVER BE EMPHASIZED THAT THE AUTHORIZATION MUST BE GRANTED ON REQUEST TO ANY UNDERTAKING ESTABLISHED IN ANOTHER MEMBER STATE WHICH MEETS THE CONDITIONS LAID DOWN BY THE LEGISLATION OF THE STATE IN WHICH THE SERVICE IS PROVIDED , THAT THOSE CONDITIONS MAY NOT DUPLICATE EQUIVALENT STATUTORY CONDITIONS WHICH HAVE ALREADY BEEN SATISFIED IN THE STATE IN WHICH THE UNDERTAKING IS ESTABLISHED AND THAT THE SUPERVISORY AUTHORITY OF THE STATE IN WHICH THE SERVICE IS PROVIDED MUST TAKE INTO ACCOUNT SUPERVISION AND VERIFICATIONS WHICH HAVE ALREADY BEEN CARRIED OUT IN THE MEMBER STATE OF ESTABLISHMENT . ACCORDING TO THE GERMAN GOVERNMENT , WHICH HAS NOT BEEN CONTRADICTED ON THAT POINT BY THE COMMISSION , THE GERMAN AUTHORIZATION PROCEDURE CONFORMS FULLY TO THOSE REQUIREMENTS .
49 IT FOLLOWS FROM THE FOREGOING THAT THE REQUIREMENT OF AUTHORIZATION MAY BE MAINTAINED ONLY IN SO FAR AS IT IS JUSTIFIED ON THE GROUNDS RELATING TO THE PROTECTION OF POLICY-HOLDERS AND INSURED PERSONS RELIED UPON BY THE GERMAN GOVERNMENT . IT MUST ALSO BE RECOGNIZED THAT THOSE GROUNDS ARE NOT EQUALLY IMPORTANT IN EVERY SECTOR OF INSURANCE AND THAT THERE MAY BE CASES WHERE , BECAUSE OF THE NATURE OF THE RISK INSURED AND OF THE PARTY SEEKING INSURANCE , THERE IS NO NEED TO PROTECT THE LATTER BY THE APPLICATION OF THE MANDATORY RULES OF HIS NATIONAL LAW .
52 IF THE REQUIREMENT OF AN AUTHORIZATION CONSTITUTES A RESTRICTION ON THE FREEDOM TO PROVIDE SERVICES , THE REQUIREMENT OF A PERMANENT ESTABLISHMENT IS THE VERY NEGATION OF THAT FREEDOM . IT HAS THE RESULT OF DEPRIVING ARTICLE 59 OF THE TREATY OF ALL EFFECTIVENESS , A PROVISION WHOSE VERY PURPOSE IS TO ABOLISH RESTRICTIONS ON THE FREEDOM TO PROVIDE SERVICES OF PERSONS WHO ARE NOT ESTABLISHED IN THE STATE IN WHICH THE SERVICE IS TO BE PROVIDED ( SEE IN PARTICULAR THE JUDGMENT OF 3 DECEMBER 1974 , CITED ABOVE , AND THE JUDGMENTS OF 26 NOVEMBER 1985 IN CASE 39/75 COENEN V SOCIAAL-ECONOMISCHE RAAD ( 1975 ) ECR 1547 , AND 10 FEBRUARY 1982 IN CASE 76/81 TRANSPOROUTE V MINISTER FOR PUBLIC WORKS ( 1982 ) ECR 417 ). IF SUCH A REQUIREMENT IS TO BE ACCEPTED , IT MUST BE SHOWN THAT IT CONSTITUTES A CONDITION WHICH IS INDISPENSABLE FOR ATTAINING THE OBJECTIVE PURSUED .
54 THE COURT HAS ALREADY STRESSED IN ITS DECISIONS , MOST RECENTLY IN ITS JUDGMENT OF 3 FEBRUARY 1983 ( CASE 29/82 VAN LUIPEN ( 1983 ) ECR 151 ), THAT CONSIDERATIONS OF AN ADMINISTRATIVE NATURE CANNOT JUSTIFY DEROGATION BY A MEMBER STATE FROM THE RULES OF COMMUNITY LAW . THAT PRINCIPLE APPLIES WITH EVEN GREATER FORCE WHERE THE DEROGATION IN QUESTION AMOUNTS TO PREVENTING THE EXERCISE OF ONE OF THE FUNDAMENTAL FREEDOMS GUARANTEED BY THE TREATY . IN THIS INSTANCE IT IS THEREFORE NOT SUFFICIENT THAT THE PRESENCE ON THE UNDERTAKING ' S PREMISES OF ALL THE DOCUMENTS NEEDED FOR SUPERVISION BY THE AUTHORITIES OF THE STATE IN WHICH THE SERVICE IS PROVIDED MAY MAKE IT EASIER FOR THOSE AUTHORITIES TO PERFORM THEIR TASK . IT MUST ALSO BE SHOWN THAT THOSE AUTHORITIES CANNOT , EVEN UNDER AN AUTHORIZATION PROCEDURE , CARRY OUT THEIR SUPERVISORY TASKS EFFECTIVELY UNLESS THE UNDERTAKING HAS IN THE AFORESAID STATE A PERMANENT ESTABLISHMENT AT WHICH ALL THE NECESSARY DOCUMENTS ARE KEPT .