REPORT on the proposal for a directive of the European Parliament and of the Council on reinsurance and amending Council Directives 73/239/EEC, 92/49/EEC and Directives 98/78/EC and 2002/83/EC

    12.5.2005 - (COM(2004)0273 – C6‑0038/2004 – 2004/0097(COD)) - ***I

    Committee on Economic and Monetary Affairs
    Rapporteur: Peter Skinner


    Procedure : 2004/0097(COD)
    Document stages in plenary
    Document selected :  
    A6-0146/2005
    Texts tabled :
    A6-0146/2005
    Texts adopted :

    DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

    on the proposal for a directive of the European Parliament and of the Council on reinsurance and amending Council Directives 73/239/EEC, 92/49/EEC and Directives 98/78/EC and 2002/83/EC

    (COM(2004)0273 – C6‑0038/2004 – 2004/0097(COD))

    (Codecision procedure: first reading)

    The European Parliament,

    –   having regard to the Commission proposal to the European Parliament and the Council (COM(2004)0273)[1],

    –   having regard to Article 251(2) and Articles 47(2) and 55 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6-0038/2004),

    –   having regard to Rule 51 of its Rules of Procedure,

    –   having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of the Committee on Legal Affairs (A6-0146/2005),

    1. Approves the Commission proposal as amended;

    2. Calls on the Commission to refer the matter to Parliament again if it intends to amend the proposal substantially or replace it with another text;

    3. Instructs its President to forward its position to the Council and Commission.

    Text proposed by the CommissionAmendments by Parliament

    Amendment 1

    RECITAL 11

    (11) This Directive should apply to reinsurance undertakings which conduct exclusively reinsurance business and do not engage in direct insurance business; it should also apply to the so-called "captive" reinsurance undertakings created or owned by industrial, commercial or financial firms other than undertakings to which Directive 98/78/EC of the European Parliament and of the Council on the supplementary supervision of insurance undertakings in an insurance group[2] applies, the purpose of which is to provide reinsurance cover exclusively to the risks of the firms to which they belong.

    (11) This Directive should apply to reinsurance undertakings which conduct exclusively reinsurance business and do not engage in direct insurance business; it should also apply to the so-called "captive" reinsurance undertakings created or owned by either a financial undertaking other than an insurance or reinsurance undertaking or a group of insurance or reinsurance undertakings to which Directive 98/78/EC of the European Parliament and of the Council on the supplementary supervision of insurance undertakings in an insurance group applies, or by one or several non financial undertakings, the purpose of which is to provide reinsurance cover exclusively to the risks of the undertakings to which they belong. When in this Directive reference is made to reinsurance undertakings it shall include captive reinsurance undertakings, except when special provision is made for captive reinsurance undertakings.

    Captive reinsurance undertakings do not cover risks deriving from the external direct insurance or reinsurance business of an insurance or reinsurance undertaking belonging to the group. Furthermore, insurance or reinsurance undertakings belonging to a financial conglomerate may not own a captive undertaking.

    Amendment 2

    RECITAL 12 A (new)

     

    (12a) This Directive should not apply to the provision of reinsurance cover carried out or fully guaranteed by a Member State for reasons of substantial public interest, in the capacity of reinsurer of last resort, in particular where because of a specific situation in a market, it is unfeasible to obtain adequate commercial cover; in this regard a lack of “adequate commercial cover” should mainly mean a market failure which is characterised by an evident lack of a sufficient range of insurance offers, although excessive premiums should not however imply in itself inadequacy of that commercial cover. Article 1, paragraph 2 (d)  also applies to arrangements between insurance undertakings to which Directives 73/239/EEC and 2002/83/EC apply that aim to pool financial claims ensuing from large risks such as terrorism.

    Amendment 3

    RECITAL 12 B (new)

     

    (12b) The reinsurance undertaking must limit its objects to the business of reinsurance and related operations. This requirement may allow a reinsurance undertaking to carry on, for instance, activities such as provision of statistical or actuarial advice risk analysis or research for its clients. It may also include a holding company function and activities with respect to financial sector activities within the meaning of Article 2 point 8 of Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate1. In any case this requirement does not allow the carrying on of unrelated banking and financial activities.

    1 OJ L 35, 11.2.2003, p. 1.

    Amendment 4

    RECITAL 13

    (13) This Directive should clarify the powers and means of supervision vested in the competent authorities. The competent authorities of the reinsurance undertaking's home Member State should be responsible for monitoring the financial health of reinsurance undertakings, including their state of solvency, the establishment of adequate technical provisions and the covering of those provisions by quality assets.

    (13) This Directive should clarify the powers and means of supervision vested in the competent authorities. The competent authorities of the reinsurance undertaking's home Member State should be responsible for monitoring the financial health of reinsurance undertakings, including their state of solvency, the establishment of adequate technical provisions and equalisation reserves and the covering of those provisions and reserves by quality assets.

    Amendment 5

    RECITAL 14 A (new)

     

    (14a) The provisions governing transfers of portfolios should be in line with the single authorisation provided for in this Directive. They should apply to different kinds of transfers of portfolios between reinsurance undertakings, such as transfers of portfolios resulting from mergers between reinsurance undertakings or other instruments of company law or transfers of portfolios of outstanding losses in run-off to another reinsurance undertaking. Moreover, the provisions governing transfers of portfolios should include provisions specifically concerning the transfer to another reinsurance undertaking of the portfolio of contracts concluded under the freedom of establishment or the freedom to provide services.

    Amendment 6

    RECITAL 19

    (19) A reinsurance undertaking conducting reinsurance business in respect of credit insurance, whose credit reinsurance business amounts to more than a small proportion of its total business should be required to set up an equalisation reserve which does not form part of the solvency margin; this reserve should be calculated according to the one of the methods laid down in Directive 73/239/EEC and which are recognised as equivalent; furthermore this Directive should allow the home Member State to also require reinsurance undertakings whose head office is situated within its territory to set up equalisation reserves for classes of risks other than credit reinsurance, following the rules laid down by that home Member State.

    (19) A reinsurance undertaking conducting reinsurance business in respect of credit insurance, whose credit reinsurance business amounts to more than a small proportion of its total business should be required to set up an equalisation reserve which does not form part of the solvency margin; this reserve should be calculated according to the one of the methods laid down in Directive 73/239/EEC and which are recognised as equivalent; furthermore this Directive should allow the home Member State to also require reinsurance undertakings whose head office is situated within its territory to set up equalisation reserves for classes of risks other than credit reinsurance, following the rules laid down by that home Member State. Following the introduction of the IFRS 4, International Financial Reporting Standards, this Directive should clarify the prudential treatment of equalisation reserves established in accordance with this Directive. However, since supervision of reinsurance needs to be reassessed under the Solvency II project, this Directive does not pre-empt any future reinsurance supervision under Solvency II.

    Justification

    The whole solvency system of direct and reinsurance undertakings is the subject to a thorough analysis and reappraisal as part of the Solvency II project. The reinsurance directive should not pre-empt or prejudice work on this project, which has not yet been completed. There is a general consensus on this. The addition to recital 19 makes this clear.

    Amendment 7

    RECITAL 20

    (20) The reinsurance undertaking should have assets to cover technical provisions which shall take account of the type of business carried out by a reinsurance undertaking, in particular the nature, amount and duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, quality, profitability and matching of its investments, which the undertaking shall ensure are diversified and adequately spread and which gives the undertaking the possibilities to respond adequately to changing economic circumstances, in particular developments in the financial markets and real estate markets or large impact catastrophic events.

    (20) The reinsurance undertaking should have assets to cover technical provisions and equalisation reserves which shall take account of the type of business carried out by a reinsurance undertaking, in particular the nature, amount and duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, quality, profitability and matching of its investments, which the undertaking shall ensure are diversified and adequately spread and which gives the undertaking the possibilities to respond adequately to changing economic circumstances, in particular developments in the financial markets and real estate markets or large impact catastrophic events.

    Amendment 8

    RECITAL 21 A (new)

     

    (21a) In the light of the similarities between life reassurance covering mortality risk and non-life reinsurance, in particular the cover of insurance risks and the duration of the life reassurance contracts, the required solvency margin for life reassurance should be determined in accordance with the provisions laid down in this Directive for the calculation of the required solvency margin for non-life reinsurance; the home Member State should however be allowed to apply the rules provided for in Directive 2002/83/EC for the establishment of the required solvency margin in respect of life reassurance activities which are linked to investment funds or participating contracts.

    Amendment 9

    RECITAL 25 A (new)

     

    (25a) This Directive should be applicable to finite reinsurance activities; therefore a definition of finite reinsurance for the purposes of the application of this Directive should be necessary; due to the special nature of this line of reinsurance activity, the home Member State should be given the option to lay down specific provisions for the pursuit of finite reinsurance activities. These provisions could differ from the general regime laid down in this Directive on a number of specific points.

    Amendment 10

    RECITAL 25 B (new)

     

    (25b) This Directive should provide rules concerning those special purpose vehicles that assume risks from insurance and reinsurance undertakings. The special nature of such special purpose vehicles, which are not insurance or reinsurance undertakings, calls for the establishment of specific provisions in Member States. Furthermore, this Directive should provide that the home Member State should lay down more detailed rules in order to set the conditions under which outstanding amounts from a special purpose vehicle can be used as assets covering technical provisions by an insurance or a reinsurance undertaking. This Directive should also provide that recoverable amounts from a special purpose vehicle may be considered as amounts deductible under reinsurance or retrocession contracts within the limits set out in this Directive, subject to an application by the insurance undertaking to the competent authority and after agreement of that authority.

    Amendment 11

    RECITAL 29

    (29) It is important to provide that reinsurance undertakings whose head office is situation outside the Community and conduct reinsurance business in the Community should not be subject to a treatment which results in a more favourable than that provided to reinsurance undertakings having their head office in a Member State.

    (29) It is important to provide that reinsurance undertakings whose head office is situated outside the Community and which conduct reinsurance business in the Community should not be subject to provisions which result in treatment more favourable than that provided to reinsurance undertakings having their head office in a Member State.

    Justification

    For clarification purposes

    Amendment 12

    RECITAL 33

    (33) The existing Community legal framework for insurance should be adapted in order to take account of the new supervisory regime for reinsurance undertakings laid down, by this Directive and in order to ensure a consistent regulatory framework for the whole insurance sector. In particular, the existing provisions which permit 'indirect supervision' of reinsurance undertakings by the authorities competent for the supervision of direct insurance undertakings should be adapted. Furthermore the current provisions enabling Member States to require pledging of assets covering the technical provisions of an insurance undertaking when the insurer is reinsured by a reinsurance undertaking authorised pursuant to this Directive or by an insurance undertaking should be abolished. Finally, it should be provided that the solvency margin required to insurance undertakings conducting reinsurance activities, when such activities represent a significant part of their business, is subject to the solvency rules provided for reinsurance undertakings in this Directive. Directives 73/239/EEC, 92/49/EEC and 2002/83/EC should therefore be amended accordingly.

    (33) The existing Community legal framework for insurance should be adapted in order to take account of the new supervisory regime for reinsurance undertakings laid down by this Directive and in order to ensure a consistent regulatory framework for the whole insurance sector. In particular, the existing provisions which permit 'indirect supervision' of reinsurance undertakings by the authorities competent for the supervision of direct insurance undertakings should be adapted. Furthermore the current provisions enabling Member States to require pledging of assets covering the technical provisions of an insurance undertaking, whatever form this requirement might take, when the insurer is reinsured by a reinsurance undertaking authorised pursuant to this Directive or by an insurance undertaking should be abolished. Finally, it should be provided that the solvency margin required to insurance undertakings conducting reinsurance activities, when such activities represent a significant part of their business, is subject to the solvency rules provided for reinsurance undertakings in this Directive. Directives 73/239/EEC, 92/49/EEC and 2002/83/EC should therefore be amended accordingly.

    Justification

    For clarification purposes.

    Amendment 13

    RECITAL 34 A (new)

    (34a) The Council, in accordance with paragraph 34 of the Interinstitutional agreement on better law-making1, should encourage Member States to draw up, for themselves and in the interest of the Community, their own tables illustrating, as far as possible, the correlation between this Directive and the transposition measures, and to make them public.

    1 OJ C 321, 31.12.2003, p. 1.

    Justification

    For clarification purposes.

    Amendment 14

    ARTICLE 1, PARAGRAPH 2

    2. This Directive shall not apply to the following:

    2. This Directive shall not apply to the following:

    a) insurance undertakings to which Directives 73/239/EEC and 2002/83/EC apply;

    a) insurance undertakings to which Directives 73/239/EEC and 2002/83/EC apply;

    b) activities and bodies referred to in Article 3(1) and (2) of Directive 73/239/EEC;

    b) activities and bodies referred to in Articles 2 and 3 of Directive 73/239/EEC;

    c) activities and bodies referred to in Article 3 of Directive 2002/83/EC;

    c) activities and bodies referred to in Article 3 of Directive 2002/83/EC;

    d) the activity of reinsurance conducted by the government of a Member State when this is acting, for reasons of substantial public interest, in the capacity of reinsurer of last resort in circumstances where such a role is required by a situation in the market in which it is objectively impossible to obtain commercial cover.

    d) the activity of reinsurance conducted or fully guaranteed by the government of a Member State when this is acting, for reasons of substantial public interest, in the capacity of reinsurer of last resort including in circumstances where such a role is required by a situation in the market in which it is unfeasible to obtain adequate commercial cover.

    Amendment 15

    ARTICLE 2, PARAGRAPH 1, POINT (A)

    (a) reinsurance means the activity consisting in accepting risks ceded by an insurance undertaking, by another reinsurance undertaking or by an institution for occupational retirement provision falling under the scope of Directive 2003/41/EC of the European Parliament and of the Council1

     

    (a) reinsurance means the activity consisting in accepting risks ceded by an insurance undertaking, by another reinsurance undertaking. In the case of the association of underwriters known as Lloyd's, reinsurance also means the accepting by an insurance or reinsurance undertaking other than the association of underwriters known as Lloyd's of risks ceded by any member of Lloyd's.

    1 OJ L 235, 23.9.2003, p. 10.

     

    Justification

    For clarification of the reference to the association of underwriters known as Lloyd's.

     

     

     

     

    Amendment 16

    ARTICLE 2, PARAGRAPH 1, POINT (A A) (new)

     

    (aa) captive reinsurance undertaking means a reinsurance undertaking owned either by a financial undertaking other than an insurance or a reinsurance undertaking or a group of insurance or reinsurance undertakings to which Directive 98/78/EC applies, or by a non financial undertaking, the purpose of which is to provide reinsurance cover exclusively for the risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which the captive reinsurance undertaking is a member;

    Amendment 17

    ARTICLE 2, PARAGRAPH 1, POINT (N)

    (n) captive reinsurance undertaking means a reinsurance undertaking owned either

    by a financial undertaking other than an insurance undertaking or a reinsurance undertaking or a group of insurance or reinsurance undertakings to which Directive 98/78/EC applies, or by one or several non financial undertakings, the purpose of which is to provide reinsurance cover exclusively to the risks of the undertaking or undertakings to which it belongs or to an undertaking or undertakings of the group of which the captive reinsurance undertaking makes part.

    (n) financial undertaking means one of the following entities:

    (i) a credit institution, a financial institution or an ancillary banking services undertaking within the meaning of Article 1(5) and (23) of Directive 2000/12/EC;

    (ii) an insurance undertaking, a reinsurance undertaking or an insurance holding company within the meaning of Article 1(i) of Directive 98/78/EC;

    (iii) an investment firm or a financial institution within the meaning of point 1 of Article 4(1) of Directive 2004/39/;

    (iv) a mixed financial holding company within the meaning of Article 2(15) of Directive 2002/87/EC.

    Justification

    For clarification purposes.

     

     

    Amendment 18

    ARTICLE 2, PARAGRAPH 1, POINT (N A) (new)

     

    (na) special purpose vehicle (SPV) means any undertaking, whether incorporated or not, other than an existing insurance or reinsurance undertaking, which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issuance or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the reinsurance obligations of such vehicle.

    Amendment 19

    ARTICLE 2, PARAGRAPH 1, POINT (N B) (new)

     

    (nb) finite reinsurance means reinsurance under which the explicit maximum loss potential, expressed as the maximum economic risk transferred, arising both from a significant underwriting risk and timing risk transfer, exceeds the premium over the lifetime of the contract, by a limited but significant amount, together with at least one of the following two features:

    (i) explicit and material considerationof the time value of money;

    (ii) contractual provisions to  moderate the balance of  economic experience between the parties over time to achieve the target risk transfer.

    Amendment 20

    ARTICLE 2, PARAGRAPH 2, SUBPARAGRAPHS 1 AND 2

     

    2. For the purposes of paragraph 1(a), the provision of cover by a reinsurance undertaking to an institution for occupational retirement provision falling under the scope of Directive 2003/41/EC of the European Parliament and of the Council, where the law of the institution's home Member permits such provision, shall also be considered as an activity falling under the scope of this Directive.

    2. For the purposes of paragraph 1(c) any permanent presence of an undertaking in the territory of a Member State shall be treated in the same way as an agency or branch, even if that presence does not take the form of a branch or agency, but consists merely of an office managed by the undertaking's own staff or by a person who is independent but has permanent authority to act for the undertaking as an agency would.

    For the purposes of paragraph 1(c) any permanent presence of a reinsurance undertaking in the territory of a Member State shall be treated in the same way as an agency or branch, even if that presence does not take the form of a branch or agency, but consists merely of an office managed by the undertaking's own staff or by a person who is independent but has permanent authority to act for the undertaking as an agency would.

    For the purposes of paragraph 1(i) , and in the context of Articles 7 and 14 and of the other levels of holding referred to in Article 14, the voting rights referred to in Article 92 of Directive 2001/34/EC shall be taken into account.

    For the purposes of paragraph 1(i) , and in the context of Articles 12 and 19 to 23 and of the other levels of holding referred to in Article 19 to 23, the voting rights referred to in Article 92 of Directive 2001/34/EC shall be taken into account.

     

    For the purposes of paragraph 1(k), any subsidiary of a subsidiary undertaking shall also be regarded as a subsidiary of the undertaking which is those undertakings' ultimate parent undertaking.

     

    For the purposes of paragraph 1(m), any subsidiary undertaking of a subsidiary undertaking shall be considered a subsidiary of the parent undertaking which is at the head of those undertakings.

     

    For the purposes of paragraph 1(m) a situation in which two or more natural or legal persons are permanently linked to one and the same person by a control relationship shall also be regarded as constituting a close link between such persons.

    Justification

    For clarification purposes.

    Amendment 21

    ARTICLE 23, TITLE

    Qualified holdings: Powers of the competent authority

    Qualifying holdings: Powers of the competent authority

    Justification

    For clarification purposes.

    Amendment 22

    Article 28, Paragraph 1, introduction

    1. Articles 24-27 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and:

    1. Articles 24 and 27 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and:

    Justification

    Harmonisation with the definition at Article 16, Paragraph 5 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance

    Amendment 23

    ARTICLE 32, PARAGRAPH 3

    3) When the home Member State allows any technical provisions to be covered by claims against reinsurers who are not authorised in accordance with this Directive or insurance undertakings which are not authorised in accordance with Directives 73/239/EEC or 2002/83/EC, it shall fix the percentage so allowed.

    3) When the home Member State allows any technical provisions to be covered by claims against reinsurers who are not authorised in accordance with this Directive or insurance undertakings which are not authorised in accordance with Directives 73/239/EEC or 2002/83/EC, it shall set the conditions for accepting such claims.

    Justification

    For clarification purposes.

    Amendment 24

    ARTICLE 34

    The assets covering the technical provisions shall take account of the type of business carried out by a reinsurance undertaking, in particular the nature, the amount and the duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, quality, profitability and matching of its investments, which the undertaking shall ensure are diversified and adequately spread and which gives the undertaking the possibilities to respond adequately to changing economic circumstances, in particular developments in the financial markets and real estate markets or large impact catastrophic events.

    1. The home Member State shall require every reinsurance undertaking to invest the assets covering the technical provisions and the equalisation reserve referred to in Article 33 in accordance with the following rules:

     

    (a) the assets shall take account of the type of business carried out by a reinsurance undertaking, in particular the nature, the amount and the duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, quality, profitability and matching of its investments;

     

    (b) the reinsurance undertaking shall ensure that the assets are diversified and adequately spread and allow the undertaking to respond adequately to changing economic circumstances, in particular developments in the financial markets and real estate markets or large impact catastrophic events. The undertaking has to assess the impact of irregular market circumstances on its assets and has to diversify the assets in such a way that it reduces such impact;

     

    (c) investment in assets which are not admitted to trading on a regulated financial market must in any event be kept to prudent levels;

     

    (d) investment in derivative instruments shall be possible insofar as they contribute to a reduction of investment risks or facilitate efficient portfolio management. They must be valued on a prudent basis, taking into account the underlying assets, and included in the valuation of the institution's assets. The institution shall also avoid excessive risk exposure to a single counterparty and to other derivative operations;

     

    (e) the assets shall be properly diversified in such a way as to avoid excessive reliance on any one particular asset, issuer or group of undertakings and accumulations of risk in the portfolio as a whole. Investments in assets issued by the same issuer or by issuers belonging to the same group shall not expose the undertaking to excessive risk concentration;

    Member States may decide not to apply the requirements referred to in point (e) to investment in government bonds.

     

     

    2. Member States shall not require reinsurance undertakings located in their territory to invest in particular categories of assets.

     

    3. Member States shall not subject the investment decisions of a reinsurance undertaking located in their territory or its investment manager to any kind of prior approval or systematic notification requirements.

     

    4. Notwithstanding the provisions of paragraphs 1 to 3, the home Member State may, for every reinsurance undertaking whose head office is situated in its territory, lay down the following quantitative rules, provided they are prudentially justified:

     

    (a) investments of gross technical provisions in currencies other than those in which technical provisions are set should be limited to 30%;

     

    (b) investments of gross technical provisions in shares and other negotiable securities treated as shares, bonds, debt securities which are not admitted to trading on a regulated market should be limited to 30%;

     

    (c) the home Member State may require every reinsurance undertaking to invest no more than 5% of its gross technical provisions in shares and other negotiable securities treated as shares, bonds, debt securities and other money and capital market instruments from the same undertaking, and no more than 10% of its total gross technical provisions in shares and other negotiable securities treated as shares, bonds, debt securities and other money and capital market instruments from undertakings which are members of the same group;

     

    5. Furthermore, the home Member State shall lay down more detailed rules setting the conditions for the use of amounts outstanding from a special purpose vehicle as assets covering technical provisions according to this Article.

    Amendment 25

    ARTICLE 36, PARAGRAPH 1, POINT (B)

    (b) statutory and free reserves not corresponding to underwriting liabilities;

    (b) statutory and free reserves not corresponding to underwriting liabilities or classified as equalisation reserves;

    Amendment 26

    ARTICLE 37, PARAGRAPH 3, SUBPARAGRAPH 6

     

    The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last three financial years between the amount of claims remaining to be borne by the reinsurance undertaking after deduction of amounts recoverable under retrocession and the gross amount of claims; this ratio may in no case be less than 50%.

     

     

    The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last three financial years between the amount of claims remaining to be borne by the reinsurance undertaking after deduction of amounts recoverable under retrocession and the gross amount of claims; this ratio may in no case be less than 50%. Upon application, with supporting evidence, by the reinsurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from special purpose vehicles referred to in Article 44b of this Directive may also be deducted as retrocession.

     

    Amendment 27

    ARTICLE 37, PARAGRAPH 4, SUBPARAGRAPH 8

    The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last three financial years between the amount of claims remaining to be borne by the undertaking after deduction of amounts recoverable under retrocession and the gross amount of claims; this ratio may in no case be less than 50%.

     

     

    The sum so obtained shall be multiplied by the ratio existing in respect of the sum of the last three financial years between the amount of claims remaining to be borne by the undertaking after deduction of amounts recoverable under retrocession and the gross amount of claims; this ratio may in no case be less than 50%. Upon application, with supporting evidence, by the reinsurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from special purpose vehicles referred to in Article 44b of this Directive may also be deducted as retrocession.

     

    Amendment 28

    ARTICLE 38

    1. Subject to Article 40, the required solvency margin for life reassurance activities shall be determined as laid down in paragraphs 2 to 7 according to the classes of reinsurance underwritten.

    1. The required solvency margin for life reassurance activities shall be determined according to Article 37 of this Directive.

    2. For the kinds of reinsurance referred to in Article 2(1)(a) and (b) of Directive 2002/83/EC other than assurances linked to investment funds and for the operations referred to in Article 2(3), the required solvency margin shall be equal to the sum of the following two results:

    2. Notwithstanding paragraph 1, the home Member State may provide that for reinsurance classes of assurance business covered by Article 2(1)(a) of Directive 2002/83/EC linked to investment funds or participating contracts and for the operations referred to in Article 2(1)(b), 2(2)(b), (c), (d) and (e) of Directive 2002/83/EC, the required solvency margin shall be determined in accordance with Article 28 of Directive 2002/83/EC.

    (a) first result:

     

    4% of the mathematical provisions relating to reinsurance acceptances gross of retro cessions shall be multiplied by the ratio, for the last financial year, of the total mathematical provisions net of retro cessions to the gross total mathematical provisions. That ratio may in no case be less than 85%;

     

    (b) second result:

     

    for policies on which the capital at risk is not a negative figure, 0,3% of such capital underwritten by the reinsurance undertaking shall be multiplied by the ratio, for the last financial year, of the total capital at risk retained as the undertaking's liability after retro cessions to the total capital at risk gross of retro cessions; that ratio may in no case be less than 50%.

     

    For temporary reinsurance on death of a maximum term of three years the fraction shall be 0,1%. For such reinsurance of a term of more than three years but not more than five years the above fraction shall be 0,15%.

     

    3. For reinsurance of supplementary insurance referred to in Article 2(1)(c) of Directive 2002/83/EC the required solvency margin shall be equal to the required solvency margin for reinsurance undertakings as laid down in Article 37 of this Directive.

     

    4. For reinsurance of permanent health insurance not subject to cancellation referred to in Article 2(1)(d) of Directive 2002/83/EC, the required solvency margin shall be equal to:

     

    (a) 4% of the mathematical provisions, calculated in compliance with paragraph 2(a) of this Article; plus

     

    (b) the required solvency margin for reinsurance undertakings as laid down in Article 37 of this Directive. However, the condition contained in Article 37(6)(b) of this Directive that a provision be set up for increasing age may be replaced by a requirement that the business be conducted on a group basis.

     

    5. For reinsurance of capital redemption operations referred to in Article 2(2)(b) of Directive 2002/83/EC, the required solvency margin shall be equal to 4% of the mathematical provisions calculated in compliance with paragraph 2(a) of this Article.

     

    6. For reinsurance of tontines, referred to in Article 2(2)(a) of Directive 2002/83/EC, the required solvency margin shall be equal to 1% of their assets.

     

    7. For reinsurance classes of assurances business covered by Article 2(1)(a) and (b) of Directive 2002/83/EC linked to investment funds and for the operations referred to in Article 2(2)(c), (d) and (e) of Directive 2002/83/EC, the required solvency margin shall be equal to the sum of the following:

     

    (a) in so far as the reinsurance undertaking bears an investment risk, 4% of the technical provisions, calculated in compliance with paragraph 2(a) of this Article;

     

    (b) in so far as the reinsurance undertaking bears no investment risk but the allocation to cover management expenses is fixed for a period exceeding five years, 1% of the technical provisions, calculated in compliance with paragraph 2(a) of this Article;

     

    (c) in so far as the reinsurance undertaking bears no investment risk and the allocation to cover management expenses is not fixed for a period exceeding five years, an amount equivalent to 25% of the last financial year's net administrative expenses pertaining to such business;

     

    (d) in so far as the reinsurance undertaking covers a death risk, 0,3% of the capital at risk calculated in compliance with paragraph 2(b) of this Article.

     

    Amendment 29

    ARTICLE 43, PARAGRAPH 5, POINT (B)

    (b) there is no or an insignificant risk transfer under the retrocession contracts.

    (b) there is no or a limited risk transfer under the retrocession contracts.

    Justification

    For clarification purposes

    Amendment 30

    TITLE IIIa (new) and ARTICLE 44 A (new)

     

    TITLE IIIa – PROVISIONS RELATING TO FINITE REINSURANCE AND SPECIAL PURPOSE VEHICLES

     

    Article 44a – Finite Reinsurance

     

    1. The home Member State may lay down specific provisions concerning the pursuit of finite reinsurance activities regarding:

    - mandatory conditions for inclusion in all contracts issued;

    - sound administrative and accounting procedures, adequate internal control mechanisms and risk management requirements;

    - accounting, prudential and statistical information requirements;

    - the establishment of technical provisions to ensure that they are adequate, reliable and objective;

    - investment of assets covering technical provisions in order to ensure that they take account of the type of business carried on by the reinsurance undertaking, in particular the nature, the amount and the duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, profitability and matching of its assets;

    - rules relating to available solvency margin, required solvency margin and the minimum guarantee fund that the reinsurance undertaking shall maintain in respect of finite reinsurance activities.

     

    2. In the interests of transparency, Member States shall communicate the text of all measures laid down by their national law for the purposes of paragraph 1 to the Commission without delay.

    Amendment 31

    ARTICLE 44 B (new)

     

    Article 44b – Special Purpose Vehicles (SPVs) that assume risks from insurance or reinsurance undertakings

     

    1. Where a Member State decides to allow the establishment within its territory of special purpose vehicles within the meaning of this Directive, it shall require prior official authorisation thereof.

     

     

    2. The Member State where the special purpose vehicle is established shall lay down the conditions under which the activities of such an undertaking shall be carried on. In particular, that Member State shall lay down rules regarding:

     

    -scope of authorisation; mandatory conditions for inclusion in all contracts issued;

    -good repute and appropriate professional qualifications of persons running the special purpose vehicle;

    -fit and proper requirements for shareholders or members having a qualifying holding in the special purpose vehicle;

    -sound administrative and accounting procedures, adequate internal control mechanisms and risk management requirements;

    -accounting, prudential and statistical information requirements;

    -rules relating to solvency requirements of special purpose vehicles.

     

     

    3. In the interests of transparency, Member States shall communicate the text of all measures laid down by their national law for the purposes of paragraph 2, to the Commission without delay.

    Amendment 32

    ARTICLE 49

    The competent authorities of the Member States shall inform the Commission:

    The competent authorities of the Member States shall inform the Commission and the competent authorities of the other Member States:

    a) of any authorisation of a direct or indirect subsidiary, one or more parent undertakings of which are governed by the laws of a third country.

    (a) of any authorisation of a direct or indirect subsidiary, one or more parent undertakings of which are governed by the laws of a third country.

    (b) whenever such a parent undertaking acquires a holding in a Community reinsurance undertaking which would turn the latter into its subsidiary.

    (b) whenever such a parent undertaking acquires a holding in a Community reinsurance undertaking which would turn the latter into its subsidiary.

    The Commission shall inform the Insurance Committee accordingly

     

    When authorisation is granted to the direct or indirect subsidiary of one or more parent undertakings governed by the law of third countries, the structure of the group shall be specified in the notification which the competent authorities shall address to the Commission.

    When authorisation as referred to in point (a) is granted to the direct or indirect subsidiary of one or more parent undertakings governed by the law of third countries, the structure of the group shall be specified in the notification which the competent authorities shall address to the Commission.

    Justification

    For clarification purposes.

    Amendment 33

    ARTICLE 51

    Article 51 - Rights acquired by existing reinsurance undertakings

    1. Reinsurance undertakings subject to this Directive, which were authorised or entitled to conduct reinsurance business in accordance with the provisions of the Member States in which they have their head offices before the date of entry into force of this Directive shall be deemed to be authorised, in accordance with Article 3.

    deleted

    However, they shall be subject to fulfilment of the provisions of this Directive concerning the carrying on of the business of reinsurance and to the requirements set out in Articles 6(a), (c), (d), Articles 7, 8 and 12 and Articles 32 to 41 as from the date of implementation referred to in Article 61.

     

    2.        Member States may allow reinsurance undertakings referred to in paragraph 1 which at the date of entry into force of this Directive do not comply with Articles 6 (a), 7, 8 and and Articles 32 to 40 a period of [2 years] after the date referred to in Article 61 in order to comply with these requirements.

     

    Amendment 34

    ARTICLE 52

    Article 52 - Reinsurance undertakings closing their activity

    1. Reinsurance undertakings which by [date of transposition of this Directive laid down in Article 61(1)] have ceased to conduct new reinsurance contracts and exclusively administer their existing portfolio in order to terminate their activity shall not be subject to this Directive.

    deleted

    2. Member States shall draw up the list of the reinsurance undertakings concerned and they shall communicate that list to all the other Member States.

     

    Amendment 35

    ARTICLE 55, PARAGRAPH 1

    1. The Commission shall be assisted by the Insurance Committee instituted by Article 1 of Directive 91/675/EEC.

    1. The Commission shall be assisted by the European Insurance and Occupational Pensions Committee established by Commission Decision 2004/9/EC1.

     

    1 OJ L 3, 7.1.2004, p. 34

    Justification

    For clarification purposes.

    Amendment 36

    ARTICLE 57, POINT 3

    Article 15, paragraph 2 and 3 (Directive 73/239/EEC)

    (3) In Article 15, paragraph 3 is replaced by the following:

    (3) In Article 15, paragraphs 2 and 3 are replaced by the following:

     

    '2. The home Member State shall require every insurance undertaking to cover the technical provisions and the equalisation reserve referred to in Article 15 a by matching assets in accordance with Article 6 of Directive 88/357/EEC. In respect of risks situation within the European Community, those assets must be localised within the Community. Member States shall not require insurance undertakings to localise their assets in any particular Member State. The home Member State may, however, allow the rules on the localisation of assets to be relaxed.

    '3. Member States shall not retain or introduce for the establishment of technical provisions a system of gross reserving which requires pledging of assets to cover unearned premiums and outstanding claims provisions by the reinsurer, when the reinsurer is a reinsurance undertaking authorised in accordance with Directive 200./../EC [reinsurance Directive] or an insurance undertaking or an insurance undertaking authorised in accordance with this Directive or Directive 2002/83/EC.

    3. Member States shall not retain or introduce for the establishment of technical provisions a system of gross reserving which requires pledging of assets to cover unearned premiums and outstanding claims provisions by the reinsurer, when the reinsurer is a reinsurance undertaking authorised in accordance with Directive 200./../EC [reinsurance Directive] or an insurance undertaking or an insurance undertaking authorised in accordance with this Directive or Directive 2002/83/EC.

    When the home Member State allows any technical provisions to be covered by claims against a reinsurer who is neither a reinsurance undertaking authorised in accordance with Directive 200./../EC nor an insurance undertaking authorised in accordance with this Directive or Directive 2002/83/EC, it shall fix the percentage so allowed.'

    When the home Member State allows any technical provisions to be covered by claims against a reinsurer who is neither a reinsurance undertaking authorised in accordance with Directive 200./../EC nor an insurance undertaking authorised in accordance with this Directive or Directive 2002/83/EC, it shall set the conditions for accepting such claims.'

    Justification

    For clarification purposes.

    Amendment 37

    ARTICLE 57, POINT 4

    Article 16, paragraph 2, subparagraph 4 (Directive . 73/239/EEC)

     

    (4) Article 16 is amended as follows:

    (a) in paragraph 1, the second subparagraph, second indent should read:

    '- reserves (statutory and free reserves) not corresponding to underwriting liabilities or classified as equalisation reserves;'

     

    (b) in paragraph 2, the fourth subparagraph is replaced by the following

    (4) Article 16(2), the fourth subparagraph is replaced by the following:

    (4) Article 16(2), the fourth subparagraph is replaced by the following:

    'The available solvency margin shall also be reduced by the following items:

    'The available solvency margin shall also be reduced by the following items:

    - insurance undertakings within the meaning of Article 6 of this Directive, Article 4 of Directive 2002/83/EC, or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council,

    - insurance undertakings within the meaning of Article 6 of this Directive, Article 4 of Directive 2002/83/EC, or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council,

    - reinsurance undertakings within the meaning of Article 3 of Directive 200./..EC [reinsurance directive] or non-member-country reinsurance undertakings within the meaning of article 1 (l) of Directive 98/78/EC,

    - reinsurance undertakings within the meaning of Article 3 of Directive 200./..EC [reinsurance directive] or non-member-country reinsurance undertakings within the meaning of article 1 (l) of Directive 98/78/EC,

    - insurance holding undertakings within the meaning of Article 1(i) of Directive 98/78/EC,

    - insurance holding undertakings within the meaning of Article 1(i) of Directive 98/78/EC,

    - credit institutions and financial institutions within the meaning of Article 1(1) and (5) of Directive 2000/12/EC of the European Parliament and of the Council,

    - credit institutions and financial institutions within the meaning of Article 1(1) and (5) of Directive 2000/12/EC of the European Parliament and of the Council,

    - investment firms and financial institutions within the meaning of Article 1(2) of Council Directive 93/22/EEC and of Article 2(4) and (7) of Council Directive 93/6/EEC.'

    - investment firms and financial institutions within the meaning of Article 1(2) of Council Directive 93/22/EEC and of Article 2(4) and (7) of Council Directive 93/6/EEC.'

    Justification

    For clarification purposes.

    Amendment 38

    ARTICLE 57, POINT 4 A new)

    Article 16 a, paragraphs 3 and 4 ( Directive 73/239/EEC)

     

    (4a) In Article 16a (3), seventh subparagraph, and 16a (4), seventh subparagraph, the following shall be added:

    "Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with the agreement of that authority, amounts recoverable from Special Purpose Vehicles referred to in Article 44b of Directive 200./.. /EC of the European Parliament and of the Council [reinsurance Directive]* may be deducted as retrocession."

    * OJ L ... .

    Amendment 39

    ARTICLE 57, POINT 5

    Article 17 b ( Directive 73/239/EEC)

    1. If the Commission decides, pursuant to Article 56(c) of Directive 200./../EC of the European Parliament and of the Council* [reinsurance directive] to enhance the amounts used for the calculation of the required solvency margin provided for in Article 37 (3) and (4) of that Directive, each Member State shall apply to insurance undertakings whose head office is situated within its territory the provisions of Articles 35-39 of that Directive in respect of their reinsurance acceptances activities, where one the following conditions is meet:

    1. Each Member State shall require that an insurance undertaking whose head office is situated within its territory and which conducts reinsurance activities establishes, in respect of its entire business, a minimum guarantee fund in accordance with Article 40 of Directive 200./../EC [reinsurance Directive], where one of the following conditions is met:

    a) the reinsurance premiums collected exceed 10% of their total premium;

    (a) the reinsurance premiums collected exceed 10% of its total premium;

    b) the reinsurance premiums collected exceed EUR 500 000;

    (b) the reinsurance premiums collected exceed EUR 50 000 000;

    c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.

    (c) the technical provisions resulting from its reinsurance acceptances exceed 10% of its total technical provisions.

    2. An insurance undertaking to which paragraph 1 applies shall establish, in respect of its entire business, a minimum guarantee fund in accordance with Article 40(2) of Directive 200./../EC [reinsurance Directive].

    2. Each Member State may choose to  apply to such insurance undertakings as are referred to in paragraph 1  and whose head office is situated within its territory the provisions of Article 34 of  Directive 200./../EC [reinsurance Directive] in respect of their reinsurance acceptance activities, where one of the conditions laid down in paragraph 1, second subparagraph, is met.

    * OJ L…..”

    In that case, the relevant Member State shall require that all assets employed by the insurance undertaking to cover the technical provisions corresponding to its reinsurance acceptances shall be ring-fenced, managed and organised separately from the  direct insurance activities of the insurance undertaking, without any possibility of transfer. In such a case, and only as far as their reinsurance acceptance activities are concerned, insurance undertakings shall not be subject to Articles  20 to 22 of Directive 92/49/EEC and Annex I to Directive 88/357/EEC.

     

    Each Member State shall ensure that their competent authorities verify the separation provided for in the preceding subparagraph.

     

    3. If the Commission decides, pursuant to Article 56(c) of Directive 200./../EC of the European Parliament and of the Council* [reinsurance directive] to enhance the amounts used for the calculation of the required solvency margin provided for in Article 37 (3) and (4) of that Directive, each Member State shall apply to such insurance undertakings as are referred to in paragraph 1 the provisions of Articles 35 to 39 of that Directive in respect of their reinsurance acceptance activities."

    Amendment 40

    ARTICLE 57, POINT 5 A (new)

    Article 20 a , paragraph 4 (Directive 73/239/EEC)

     

    (5a) In Article 20a, paragraph 4 shall be replaced by the following:

     

    "4. Member States shall ensure that the competent authorities have the power to decrease the reduction, based on reinsurance, to the solvency margin as determined in accordance with Article 16a where:

     

    (a) the nature or quality of reinsurance contracts has changed significantly since the last financial year;

     

    (b) there is no, or a limited, risk transfer under the reinsurance contracts."

    Amendment 41

    ARTICLE 58, POINT 2 A (new)

    Article 21, paragraph 1, introduction (Directive 92/49/EEC)

     

    (2a) In article 21, paragraph 1, the introduction shall be replaced by the following:

     

    "1. The home Member State may not authorise insurance undertakings to cover their technical provisions and equalisation reserves with any assets other than those in the following categories :"

    Amendment 42

    ARTICLE 58, POINT 2 B (new)

    Article 21, paragraph 1, point b, letter f (Directive 92/49/EEC)

     

    (2b) In Article 21(1)(B), letter (f) shall be replaced by the following:

     

    “(f) debts owed by reinsurers, including reinsurers’ shares of technical provisions, and by the special purpose vehicles referred to in Article 44b of Directive 200./../EEC [Reinsurance Directive].”

    Amendment 43

    ARTICLE 58, POINT 2 C (new)

    Article 21, paragraph 1, subparagraph 3 (Directive 92/49/EEC)

     

    (2c) In Article 21(1), the third subparagraph shall be replaced by the following:

     

    "The inclusion of any asset or category of assets listed in the first subparagraph shall not mean that all these assets should automatically be accepted as cover for technical provisions. The home Member State shall lay down more detailed rules setting the conditions for the use of acceptable assets."

    Amendment 44

    ARTICLE 58, POINT 2 D (new)

    Article 22, paragraph 1, introduction (Directive 92/49/EEC)

     

    (2d) In Article 22, paragraph 1, the introduction shall be replaced by the following:

     

    "1. As regard the assets covering technical provisions and equalisation reserves, the home Member State shall require every insurance undertaking to invest no more than:"

    Amendment 45

    ARTICLE 58, POINT 2 E (new)

    Article 23, paragraph 1, point b, letter f (Directive 92/49/EEC)

     

    (2e) In Article 23(1)(B), letter (f) shall be replaced by the following:

     

    “(f) debts owed by reinsurers, including reinsurers’ shares of technical provisions, and by special purpose vehicles referred to in Article 44b of Directive 200./../EC (Reinsurance Directive);"

    Amendment 46

    ARTICLE 58, POINT 2 F (new)

    Article 23, paragraph 3 (Directive 92/49/EEC)

     

    (2f) In Article 23, paragraph 3 shall be replaced by the following:

     

    "3.      The inclusion of any asset or category of assets listed in paragraph 1 shall not mean that all these assets should automatically be accepted as cover for technical provisions. The home Member State shall lay down more detailed rules setting the conditions for the use of acceptable assets."

    Amendment 47

    ARTICLE 59, POINT 6

    Article 20, paragraph 4, subparagraph 2 (Directive . 2002/83/EC)

    When the home Member State allows any technical provisions to be covered by claims against a reinsurer who is neither a reinsurance undertaking authorised in accordance with Directive 200./../EC nor an insurance undertaking authorised in accordance with Directives 73/239/EEC or this Directive, it shall fix the percentage so allowed.

    When the home Member State allows any technical provisions to be covered by claims against a reinsurer who is neither a reinsurance undertaking authorised in accordance with Directive 200./../EC nor an insurance undertaking authorised in accordance with Directives 73/239/EEC or this Directive, it shall set the conditions for accepting such claims.

    Justification

    For clarification purposes.

    Amendment 48

    ARTICLE 59, POINT 7 A (new)

    Article 28, paragraph 2, point (a) and (b) (Directive 2002/83/EC)

     

    (7a) In Article 28 (2)(a), first subparagraph, and 28(2)(b), first subparagraph, the following shall be added:

     

    " Upon application, with supporting evidence, by the insurance undertaking to the competent authority of the home Member State and with agreement of that authority, amounts recoverable from the Special Purpose Vehicles referred to in Article 44b of Directive 200./../EC (Reinsurance Directive) may be deducted as retrocession."

     

    Amendment 49

    ARTICLE 59, POINT 8

    Article 28a (Directive 2002/83/EC)

    (8) The following Article 28a is inserted:

    (8) The following Article 28a is inserted:

    “Article 28a

    Solvency margin for assurance undertakings conducting reinsurance activities

    “Article 28a

    Solvency margin for assurance undertakings conducting reassurance activities

    If the Commission decides, pursuant to Article 56(c) of Directive 200./../EC of the European Parliament and of the Council* [reinsurance directive] to enhance the amounts used for the calculation of the required solvency margin provided for in Article 37(3) and (4), home Member States shall apply the provisions of Articles 35 to 39 of Directive 200./../EC [Reinsurance Directive] to assurance undertakings in respect of their reinsurance acceptances activities, where one of the following conditions is meet:

    1. Each Member State shall apply to insurance undertakings whose head office is situated within its territory the provisions of Articles 35 to 39 of Directive 200./../EC of the European Parliament and of the Council [reinsurance Directive] in respect of their reinsurance acceptances activities, where one of the following conditions is met:

    a) the reinsurance premiums collected exceed 10% of their total premium;

    (a) the reinsurance premiums collected exceed 10% of their total premium;

    b) the reinsurance premiums collected exceed EUR 500 000;

    (b) the reinsurance premiums collected exceed EUR 50 000 000;

    c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.”

    (c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.

     

    2. Each Member State may choose to  apply to assurance undertakings referred to in paragraph 1 and whose head office is situated within its territory the provisions of Article 34 of  Directive 200./../EC in respect of their reinsurance acceptances activities, where one of the conditions laid down in paragraph 1, second subparagraph, is met.

     

    In that case, the respective Member State shall require that all assets employed by the assurance undertaking to cover the technical provisions corresponding to its reinsurance acceptances shall be ring-fenced, managed and organised separately from the  direct assurance activities of the assurance undertaking, without any possibility of transfer. In such case, and only as far as their reinsurance acceptance activities are concerned, assurance undertakings shall not be subject to Articles 22 to 26 of Directive 2002/83/EC.

     

    Each Member State shall ensure that their competent authorities verify the separation provided for in the second subparagraph.

    Amendment 50

    ARTICLE 59, POINT 8 A (new)

    Article 37, paragraph 4 (Directive 2002/83/EC)

     

    (9) Article 37(4) shall be replaced by the following:

     

    "4. Member States shall ensure that the competent authorities have the power to decrease the reduction, based on reinsurance, to the solvency margin as determined in accordance with Article 28 where:

     

    (a) the nature or quality of reinsurance contracts has changed significantly since the last financial year;

     

    (b) there is no, or a limited, risk transfer under the reinsurance contracts."

    Amendment 51

    TITLE IX and ARTICLE -61 (new)

    TITLE IX - FINAL PROVISIONS

    TITLE IX - TRANSITIONAL AND FINAL PROVISIONS

     

    Article -61 -

     

    Right acquired by existing reinsurance undertakings

     

    1. Reinsurance undertakings subject to this Directive, which were authorised or entitled to conduct reinsurance business in accordance with the provisions of the Member States in which they have their head offices before the date of entry into force of this Directive, shall be deemed to be authorised in accordance with Article 3.

     

    However, they shall be obliged to comply with the provisions of this Directive concerning the carrying on of the business of reinsurance and with the requirements set out in Articles 6(a), (c), (d), Articles 7, 8 and 12 and Articles 32 to 41 as from the date of implementation of the laws, regulations and administrative provisions necessary to comply with this Directive referred to in Article 61 (1).

     

    2. Member States may allow reinsurance undertakings referred to in paragraph 1 which at the date of entry into force of this Directive do not comply with Articles 6 (a), 7, 8 and Articles 32 to 40 a period until ….* in order to comply with such requirements.

     

    * 12 months from the date referred to in Article 61(1)

    Amendment 52

    ARTICLE -61 A (new)

     

    Article -61a -

     

    Reinsurance undertakings closing their activity

     

    1. Reinsurance undertakings which by …..* have ceased to conduct new reinsurance contracts and exclusively administer their existing portfolio in order to terminate their activity shall not be subject to this Directive.

     

     

    2. Member States shall draw up the list of the reinsurance undertakings concerned and they shall communicate that list to all the other Member States.

     

     

    * the date referred to in Article 61(1).

    Amendment 53

    ARTICLE -61 B (new)

     

    Article -61b -

     

    Transitional period for Articles 57(3) and 59(6)

     

    A Member State may postpone the application of the provisions of Article 57(3) of the present Directive amending Article 15(3) of Directive 73/239/EEC and of the provision in Article 59(6) of this Directive amending Article 20(4) of Directive 2002/83/EC, until ….*

     

    * 12 months after the date referred to in Article 61(1).

    Amendment 54

    ARTICLE 61, PARAGRAPH 1, SUBPARAGRAPH 1

    1) Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive at the latest by.. They shall forthwith communicate to the Commission the texts of those provisions and a correlation table between those provisions and this Directive.

    1) Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive at the latest 24 months after the date of entry into force. They shall forthwith communicate to the Commission the texts of those provisions.

    Justification

    For clarification purposes.

    Amendment 55

    ANNEX I

    Form of reinsurance undertakings:

    Form of reinsurance undertakings:

     in the case of the Kingdom of Belgium: 'société anonyme/naamloze vennootschap', 'société en commandite par actions/commanditaire vennootschap op aandelen', 'association d'assurance mutuelle/onderlinge verzekeringsvereniging', 'société coopérative/coöperatieve vennootschap';

     in the case of the Kingdom of Denmark: 'aktieselskaber', 'gensidige selskaber';

     in the case of the Federal Republic of Germany: 'Aktiengesellschaft', 'Versicherungsverein auf Gegenseitigkeit', 'Öffentlich-rechtliches Wettbewerbsversicherungsunternehmen';

     in the case of the French Republic: 'société anonyme', 'société d'assurance mutuelle', 'institution de prévoyance régie par le code de la sécurité sociale', 'institution de prévoyance régie par le code rural' and 'mutuelles régies par le code de la mutualité';

     in the case of Ireland: incorporated companies limited by shares or by guarantee or unlimited;

     in the case of the Italian Republic: 'società per azioni';

     in the case of the Grand Duchy of Luxembourg: 'société anonyme';

     in the case of the Kingdom of the Netherlands: 'naamloze vennootschap', 'onderlinge waarborgmaatschappij';

     in the case of the United Kingdom: incorporated companies limited by shares or by guarantee or unlimited, societies registered under the Industrial and Provident Societies Acts, societies registered under the Friendly Societies Acts, "the association of underwriters known as Lloyd's";

     in the case of the Hellenic Republic: "ανώνυμη εταιρία", "αλληλασφαλιστικός συνεταιρισμός";

     in the case of the Kingdom of Spain: 'sociedad anónima';

     in the case of the Portuguese Republic: 'sociedade anónima', 'mútua de seguros';

     in the case of the Republic of Austria: 'Aktiengesellschaft', 'Versicherungsverein auf Gegenseitigkeit';

     in the case of the Republic of Finland: 'keskinäinen vakuutusyhtiö/ömsesidigt försäkringsbolag', 'vakuutusosake-yhtiö/försäkringsaktiebolag', 'vakuutusyhdistys/försäkrings-förening';

     in the case of Kingdom of Sweden: 'försäkringsaktiebolag', 'ömsesidigt försäkringsbolag', '”

     in the case of the Kingdom of Belgium: 'société anonyme/naamloze vennootschap', 'société en commandite par actions/commanditaire vennootschap op aandelen', 'association d'assurance mutuelle/onderlinge verzekeringsvereniging', 'société coopérative/coöperatieve vennootschap';

     in the case of the Czech Republic: 'akciová společnost';

     in the case of the Kingdom of Denmark: 'aktieselskaber', 'gensidige selskaber';

     in the case of the Federal Republic of Germany: 'Aktiengesellschaft', 'Versicherungsverein auf Gegenseitigkeit', 'Öffentlich-rechtliches Wettbewerbsversicherungsunternehmen';

     in the case of the Republic of Estonia: 'aktsiaselts';

     in the case of the Hellenic Republic: "ανώνυμη εταιρία", "αλληλασφαλιστικός συνεταιρισμός";

     in the case of the Kingdom of Spain: 'sociedad anónima';

     in the case of the French Republic: 'société anonyme', 'société d'assurance mutuelle', 'institution de prévoyance régie par le code de la sécurité sociale', 'institution de prévoyance régie par le code rural' and 'mutuelles régies par le code de la mutualité';

     in the case of Ireland: incorporated companies limited by shares or by guarantee or unlimited;

     in the case of the Italian Republic: 'società per azioni';

     in the case of the Republic of Cyprus:

     in the case of the Repulic of Latvia: 'akciju sabiedrība', 'sabiedrība ar ierobežotu atbildību';

     in the case of the Republic of Lithuania: 'akcinė bendrovė', 'uždaroji akcinė bendrovė';

     in the case of the Grand Duchy of Luxembourg: 'société anonyme', 'société en commandite par actions', 'association d’assurances mutuelles', 'société coopérative';

     in the case of the Republic of Hungary: 'biztosító részvénytársaság', 'biztosító szövetkezet', 'harmadik országbeli biztosító magyarországi fióktelepe';

     in the case of the Republic of Malta: 'limited liability company';

     in the case of the Kingdom of the Netherlands: 'naamloze vennootschap', 'onderlinge waarborgmaatschappij';

     in the case of the Republic of Austria: 'Aktiengesellschaft', 'Versicherungsverein auf Gegenseitigkeit';

     in the case of the Republic of Poland: 'spółka akcyjna', 'towarzystwo ubezpieczeń wzajemnych';

     in the case of the Portuguese Republic: 'sociedade anónima', 'mútua de seguros';

     in the case of the Republic of Slovenia: 'delniška družba';

     in the case of the Slovak Republic: 'akciová spoločnost';

     in the case of the Republic of Finland: 'keskinäinen vakuutusyhtiö/ömsesidigt försäkringsbolag', 'vakuutusosake-yhtiö/försäkringsaktiebolag', 'vakuutusyhdistys/försäkrings-förening';

     in the case of Kingdom of Sweden: 'försäkringsaktiebolag', 'ömsesidigt försäkringsbolag';

     in the case of the United Kingdom: incorporated companies limited by shares or by guarantee or unlimited, societies registered under the Industrial and Provident Societies Acts, societies registered or incorporated under Friendly Societies Act, "the association of underwriters known as Lloyd's";

    • [1]  Not yet published in OJ.
    • [2]  

    EXPLANATORY STATEMENT

    It should be recognised that the work of the Council and the Commission in bringing positive proposals for outcomes of this directive has been exemplary, matched only by the co-operation of both the Netherlands and Luxembourg presidencies in working with the Parliament to attempt a resolution of issues in the first reading.

    About Reinsurance

    Reinsurance is insurance for insurers. It steps in when an insurance undertaking is facing differences between prediction[1] and reality, a gap that is known as underwriting (actuarial) risk.

    Reinsurance allows direct insurers to free themselves from the part of a risk that exceeds their underwriting capacity, which they can not bear alone. It can help a company reduce its probability of ruin and thus plays an important part in risk management and long term stability of financial systems.

    Reinsurance has a major function in spreading risks globally.

    Reinsurance undertakings also contribute to increased liquidity in financial markets by freeing equity that was tied up to cover risk thus increasing capital available to insurance companies. Furthermore, they participate in financial markets' activities, mainly through the management of their assets.[2]

    Some Outstanding Issues

    Some issues remain contentious with the industry in particular, the key issue of the treatment of life and non-life reinsurance. The proposal for a 3per mill capital charge on life reinsurance contracts is excessive. The non-life calculation method may be a more acceptable compromise for life reinsurance.

    Another issue is the use of collateral to secure reinsurance contracts. This is no longer an effective regulatory tool and represents an inefficient use of capital, which could otherwise be released into the wider economy thereby potentially contributing to the goals of the Lisbon Strategy.

    Furthermore, the proposal for minimum capital requirements for captive reinsurance entities is excessive, but again, industrial interests have indicted their willingness to accept it in the context of an overall compromise.

    International Dimension

    Globally, there are approximately around 250 reinsurance entities in 50 countries with business volume of over 170 billion USD of reinsurance premiums. Over 30 per cent of it is created by only 5 top reinsurance companies, all of them European, while most of the premiums originate in North America.[3]

    Collateral requirements placed on EU reinsurers in the US bring about massive costs for those companies, thereby distorting competition. The continued existence of collateral arrangements in some EU markets and the lack of single market arrangements make it impossible for these companies to mount an effective challenge to this anti-competitive practice.

    This represents a significant barrier to entry for all EU reinsurance entities to those markets and engenders massive costs to those who do operate in these markets.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Ten biggest reinsurance companies in 2003

    Ranking

    Rating

    Name

    Country

    NRWP

    2003

    (USD m)

    NRWP

    2002

    (USD m)

    1

    A+

    Munich Re Co.

    Germany

    29 197,9

    24 924,3

    2

    AA

    Swiss Re Co.

    Switzerland

    24 776,6

    21 600,0

    3

     

    Berkshire Hathaway RE

    US

    11 946,0

    13 083,0

    4

    A+

    Employers RE

    US

    9 729,0

    7 892,0

    5

    AA-

    Hannover RE

    Germany

    8 700,3

    7 445,9

    6

    A

    Lloyd's

    UK

    7 818,3

    6 808,6

    7

    AA-

    Allianz AG

    Germany

    5 226,1

    4 584,7

    8

    BBB+

    SCOR

    France

    4 260,1

    4 693,4

    9

    A-

    Converium

    Switzerland

    3 827,0

    3 322,2

    10

    AA-

    PartnerRE

    Bermuda

    3 589,6

    2 655,4

    Source: Standard and Poor, Ten Years of Global Reinsurance Highlights, Edition 2004

    Non-life reinsurance dominates the industry, comprising more than 80% of overall premiums. Life insurance business consists mostly of savings and therefore has a small risk component and smaller need for reinsurance.

    In addition to professional reinsurers, a number of large direct insurance companies write reinsurance business. As for special types of risks, insurance pools (such as nuclear insurance pools) have been created.

    The Directive and why it is necessary?

    Currently there is a fragmented market regulation, which needs integration under a common set of rules.

    Due to limitation of reinsurers to B2B transactions, the reinsurance industry has for a long time escaped the public eye as well as the levels of supervision and regulation enforced in direct insurance business. Due to highly exposed risk, catastrophe risk and other hazardous business taken over by reinsurers, a pan-European system based on prudent supervision has become a necessity.

    Although a possibility for voluntary disclosure of reinsurance information has been discussed in the process of drafting and consultation of new legislation, the new regulatory system is based on a current direct insurance supervision rules (fast track solution). It has three main features:

    1-Mutual recognition of the supervision in the Member State where the insurance undertaking is licensed. The Home Member State supervisory authority will have sole competence for prudential supervision of reinsurance undertaking within the EU.

    2-Mandatory licensing system as established with the third insurance directive. It has been chosen over a voluntary passport system.

    3-Quantitative solvency requirements in line with those of direct insurance; the proposal incorporates a possibility to increase the margin up to 50% for non-life reinsurance through comitology.

    Transition and Application

    In order for countries with differing regulatory systems to promote the change in an orderly fashion a period of 24 months for application could be allowed with an additional 12 months for transition to effect the practical changes required for the market.

    However, any transition period established in respect of the taking of collateral must be considered wholly independently of the wider review of insurance solvency.

    Supervision of reinsurance needs to be reassessed under the Solvency II project. This directive does not pre-empt any future reinsurance supervision under Solvency II.

    • [1]  Prediction: insurers set premium rates by prediction of future losses. They can predict the total annual loss to be expected for a group much more accurately than for an individual, then distributes the projected losses among those insured, thereby determining the premium.
    • [2]  For the reinsurer to honour its financial obligations and to make profit, it needs to combine underwriting (examining and pricing risk) with asset management (investing received premiums) as well as capital management (for unexpected losses that can not be covered by premiums or asset management income).
    • [3]  Non life cessions originated in 2003: 49 % North America, followed by Western Europe (34 per cent) and Asia (9 per cent), Latin America 3%, and the Rest 5%. (Swiss Re Economic Research and Consulting, in "Understanding reinsurance", 2004)

    OPINION of the Committee on Legal Affairs (6.4.2005)

    for the Committee on Economic and Monetary Affairs

    on the proposal for a European Parliament and Council directive on reinsurance and amending Council Directives 73/239/EEC and 92/49/EEC and Directives 98/78/EC and 2002/83/EC
    (COM(2004)0273 – C6‑0038/2004 – 2004/0097(COD))

    Draftsman: Jean-Paul Gauzès

    SHORT JUSTIFICATION

    I. Preliminary remarks

    On 21 April 2004 the Commission adopted a proposal for a directive on supervision of reinsurance.

    Reinsurance is a structured risk transfer between an insurance undertaking and a reinsurance company.

    There are currently no harmonised reinsurance supervision rules in the EU. This lack of an EU regulatory framework has resulted in significant differences in the level of supervision of European reinsurance undertakings. The coexistence of different national rules has created uncertainty for insurance companies (and their policyholders), barriers to trade within the internal market, administrative burden and costs as well as weakening the EU position in international trade negotiations (according to the Commission’s ‘general comments’ preceding the text of the directive).

    With a view to remedying this situation and providing security for insurers and policyholders, your draftsman supports the principle of a reinsurance directive that aims to establish a legal framework requiring prudential supervision of reinsurance in the Community. It should also be emphasised how important it is to maintain a good level of security for insurance companies, particularly small insurance companies or mutual benefit societies, which depend very much on their reinsurer.

    The proposed system for reinsurance is the same as has already been established to bring about the internal market in the insurance and other financial services sector: licensing by the Member State of origin of the insurance or reinsurance enterprise and prudential and financial supervision by the same authorities, taking account of the harmonisation achieved by this directive.

    Work in the Council should make it possible to find a satisfactory compromise in the short term, pending the ‘Solvency II’ directive, on points such as purely qualitative rules on investments, the solvency margin, or a transition period until 2010 for financial guarantees, which would easily fit in with the prospect of negotiating mutual recognition with the USA.

    For the future, it will certainly be advisable to introduce harmonised minimum quantitative rules on investments similar to those that have been applied to direct insurance.

    II. Draftsman’s comments

    Your draftsman considers that the legal basis of the draft directive does not present a problem, since it is Articles 47(2) and 55 of the Treaty, which allow Community measures to be adopted in order to achieve the internal market in services. This covers reinsurance.

    The directive is the most appropriate instrument for achieving the desired aims, and complies with the principles of subsidiarity and proportionality. The proposed directive on reinsurance does not go further than is necessary to achieve its objectives.

    AMENDMENTS

    The Committee on Legal Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

    Text proposed by the Commission[1]

     

    Amendments by Parliament

    Amendment by Katalin Lévai

    Amendment 1

    RECITAL 19

    (19) A reinsurance undertaking conducting reinsurance business in respect of credit insurance, whose credit reinsurance business amounts to more than a small proportion of its total business should be required to set up an equalisation reserve which does not form part of the solvency margin; this reserve should be calculated according to the one of the methods laid down in Directive 73/239/EEC and which are recognised as equivalent; furthermore this Directive should allow the home Member State to also require reinsurance undertakings whose head office is situated within its territory to set up equalisation reserves for classes of risks other than credit reinsurance, following the rules laid down by that home Member State.

    (19) A reinsurance undertaking conducting reinsurance business in respect of credit insurance, whose credit reinsurance business amounts to more than a small proportion of its total business should be required to set up an equalisation reserve which does not form part of the solvency margin; this reserve should be calculated according to the one of the methods laid down in Directive 73/239/EEC and which are recognised as equivalent; furthermore this Directive should allow the home Member State to also require reinsurance undertakings whose head office is situated within its territory to set up equalisation reserves for classes of risks other than credit reinsurance, following the rules laid down by that home Member State. Following the introduction of accounting standard IFRS 4 (International Financial Reporting Standards), this Directive should clarify the prudential treatment of equalisation reserves established in accordance with this Directive.

    Justification

    Further clarification is necessary in respect of the prudential treatment of equalisation reserves established in accordance with this Directive.

    Amendment by Katalin Lévai

    Amendment 2

    RECITAL 20

    (20) The reinsurance undertaking should have assets to cover technical provisions which shall take account of the type of business carried out by a reinsurance undertaking, in particular the nature, amount and duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, quality, profitability and matching of its investments, which the undertaking shall ensure are diversified and adequately spread and which gives the undertaking the possibilities to respond adequately to changing economic circumstances, in particular developments in the financial markets and real estate markets or large impact catastrophic events.

    (20) The reinsurance undertaking should have assets to cover technical provisions and equalisation reserves which shall take account of the type of business carried out by a reinsurance undertaking, in particular the nature, amount and duration of the expected claims payments, in such a way as to secure sufficiency, liquidity, security, quality, profitability and matching of its investments, which the undertaking shall ensure are diversified and adequately spread and which gives the undertaking the possibilities to respond adequately to changing economic circumstances, in particular developments in the financial markets and real estate markets or large impact catastrophic events.

    Justification

    Technical addition.

    Amendment by Katalin Lévai

    Amendment 3

    RECITAL 29

    (29) It is important to provide that reinsurance undertakings whose head office is situated outside the Community and conduct reinsurance business in the Community should not be subject to a treatment which results in a more favourable than that provided to reinsurance undertakings having their head office in a Member State.

    (29) It is important to provide that reinsurance undertakings whose head office is situated outside the Community and conduct reinsurance business in the Community should not be subject to provisions which result in a more favourable treatment than that provided to reinsurance undertakings having their head office in a Member State.

    Justification

    Technical clarification.

    Amendment 4

    Article 2, Paragraph 1(c)

    (c) branch means an agency or a branch of a reinsurance undertaking;

    (c) branch means an agency or a branch of a reinsurance undertaking;

    any permanent presence of an undertaking in the territory of a Member State shall be treated in the same way as an agency or branch, even if that presence does not take the form of an agency or branch, but consists merely of an office managed by the undertaking’s own staff or by a person who is independent but has permanent authority to act for the undertaking as an agency would;

    Justification

    Harmonisation with the definition at Article 1(b) of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance.

    Amendment 5

    Article 2, Paragraph 1(d)

    (d) establishment means the head office, branch of a reinsurance undertaking, account being taken of point c);

    (d) establishment means the head office, agency or branch of a reinsurance undertaking;

    Justification

    Harmonisation with the definition at Article 1(c) of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance.

    Amendment 6

    Article 2, Paragraph 1(i)

    (i) qualifying holding means a direct or indirect holding in an undertaking which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the undertaking in which a holding subsists;

    (i) qualifying holding means a direct or indirect holding in an undertaking which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the undertaking in which a holding subsists;

    for the purposes of this definition, in the context of Articles 7 and 14 and of the other levels of holding referred to in Article 14, the voting rights referred to in Article 92 of Directive 2001/34/EC shall be taken into consideration;

    Justification

    Harmonisation with the definition at Article 1(j) of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance.

    Amendment 7

    Article 2, Paragraph 1(k)

    (k) subsidiary means a subsidiary undertaking as defined in Articles 1 and 2 of Directive 83/349/EEC;

    (k) subsidiary means a subsidiary undertaking as defined in Articles 1 and 2 of Directive 83/349/EEC; any subsidiary of a subsidiary undertaking shall also be regarded as a subsidiary of the undertaking which is those undertakings’ ultimate parent undertaking;

    Justification

    Harmonisation with the definition at Article 1(l) of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance.

    Amendment 8

    Article 2, Paragraph 1(m) (ii)

    (ii)       control, in all the cases referred to in Article 1(1) and (2) of Directive 83/349/EEC or a similar relationship between any natural or legal person and an undertaking;

    (ii)       control, which shall mean the relationship between a parent undertaking and a subsidiary, in all the cases referred to in Article 1(1) and (2) of Directive 83/349/EEC, or a similar relationship between any natural or legal person and an undertaking; any subsidiary undertaking of a subsidiary undertaking shall also be considered a subsidiary of the parent undertaking which is at the head of those undertakings;
    a situation in which two or more natural or legal persons are permanently linked to one and the same person by a control relationship shall also be regarded as constituting a close link between such persons;

    Justification

    Harmonisation with the definition at Article 1(r)(ii) of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance.

    Amendment by Katalin Lévai

    Amendment 9

    Article 2, Paragraph 1(n a) (new)

     

    (na) financial undertaking means one of the following entities:

     

    (i) a credit institution, a financial institution or an ancillary banking services undertaking within the meaning of Article 1, points 5 and 23 of Directive 2000/12/EC; or

     

    (ii) an investment firm or a financial institution within the meaning of Article 4(1), point 1 of Directive 2004/39/EC; or

     

    (iii) a mixed financial holding company within the meaning of Article 2, point 15 of Directive 2002/87/EC.

    Justification

    It is necessary provide for the definition of ‘financial undertaking’.

    Amendment 10

    Article 2, Paragraph 2

    2. For the purposes of paragraph 1(c) any permanent presence of an undertaking in the territory of a Member State shall be treated in the same way as an agency or branch, even if that presence does not take the form of a branch or agency, but consists merely of an office managed by the undertaking’s own staff or by a person who is independent but has permanent authority to act for the undertaking as an agency would.

    For the purposes of paragraph 1(i), and in the context of Articles 7 and 14 and of the other levels of holding referred to in Article 14, the voting rights referred to in Article 92 of Directive 2001/34/EC shall be taken into account.

    For the purposes of paragraph 1(k), any subsidiary of a subsidiary undertaking shall also be regarded as a subsidiary of the undertaking which is those undertakings’ ultimate parent undertaking.

    For the purposes of paragraph 1(m), any subsidiary undertaking of a subsidiary undertaking shall be considered a subsidiary of the parent undertaking which is at the head of those undertakings.

    Fort the purposes of paragraph 1(m), a situation in which two or more natural or legal persons are permanently linked to one and the same person by a control relationship shall also be regarded as constituting a close link between such persons.

    deleted

    Justification

    The previous amendments have placed all of these provisions in Article 2, Paragraph 1.

    Amendment 11

    Article 18

    Under the conditions laid down by national law, each Member State shall authorise reinsurance undertakings with head offices within its territory to transfer all or part of their portfolios of contracts, including those concluded either under the right of establishment or the freedom to provide services, to an accepting office established within the Community, if the competent authorities of the home Member State of the accepting office certify that, after taking the transfer into account, the latter possesses the necessary solvency margin referred to in Chapter 3.

    Under the conditions laid down by national law, each Member State shall authorise reinsurance undertakings with head offices within its territory to transfer all or part of their portfolios of contracts, concluded either under the right of establishment or the freedom to provide services, to an accepting office established within the Community, if the competent authorities of the home Member State of the accepting office certify that, after taking the transfer into account, the latter possesses the necessary solvency margin referred to in Chapter 3.

    Justification

    Harmonisation with the definition at Article 14, Paragraph 1 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance.

    Amendment 12

    Article 28, Paragraph 1, introduction

    1.        Articles 24-27 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and:

    1.        Articles 24 and 27 shall not preclude the exchange of information within a Member State, where there are two or more competent authorities in the same Member State, or, between Member States, between competent authorities and:

    Justification

    Harmonisation with the definition at Article 16, Paragraph 5 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance

    Amendment by Giuseppe Gargani

    Amendment 13

    Article 57, point 5

    Article 17 b (Directive 73/239/EEC)

    (5)       The following Article 17b is inserted:

    “Article 17b

    1. If the Commission decides, pursuant to Article 56(c) of Directive 200./../EC of the European Parliament and of the Council* [reinsurance directive] to enhance the amounts used for the calculation of the required solvency margin provided for in Article 37 (3) and (4) of that Directive, each Member State shall apply to insurance undertakings whose head office is situated within its territory the provisions of Articles 35-39 of that Directive in respect of their reinsurance acceptances activities, where one the following conditions is met:

    (5)       The following Article 17b is inserted:

    “Article 17b

    1. Each Member State shall apply to insurance undertakings whose head office is situated within its territory the provisions of Articles 35 to 39 of that Directive in respect of their reinsurance acceptances activities, where one of the following conditions is met:

     

    a) the reinsurance premiums collected exceed 10% of their total premium;

    b) the reinsurance premiums collected exceed EUR 500 000;

    c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.

    a) the reinsurance premiums collected exceed 10% of their total premium;

    b) the reinsurance premiums collected exceed EUR 500 000;

    c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.

    2. An insurance undertaking to which paragraph 1 applies shall establish, in respect of its entire business, a minimum guarantee fund in accordance with Article 40(2) of Directive 200./../EC [reinsurance Directive].

    2. An insurance undertaking to which paragraph 1 applies shall establish, in respect of its entire business, a minimum guarantee fund in accordance with Article 40 of Directive 200./../EC [reinsurance Directive].

     

    2a.      Each Member State may choose to apply to insurance undertakings referred to in paragraph 1 and whose head office is situated within its territory the provisions of Article 34 of Directive 200./../EC [reinsurance Directive] in respect of their reinsurance acceptance activities, where one of the conditions laid down in paragraph 1, second subparagraph is met.

     

    In that case, the Member State concerned shall require that all assets employed by the insurance undertaking to cover the technical provisions corresponding to its reinsurance acceptances be ring-fenced, managed and organised separately from the direct insurance activities of the insurance undertakings, without any possibility of transfer.

     

    In such case, and only as far as their reinsurance acceptance activities are concerned, insurance undertakings shall not be subject to Articles 20 to 22 of Directive 92/49/EEC and Annex I to Directive 88/357/EEC.

     

    Member States shall ensure that their competent authorities verify the separation provided for in the second subparagraph.

    Justification

    Within reasonable limits, the provisions of the Directive should guarantee a level playing field between reinsurers and direct insurers writing reinsurance business.

    Amendment by Giuseppe Gargani

    Amendment 14

    Article 59, point 8

    Article 28 a (Directive 2002/83/EC)

    (8) The following Article 28a is inserted:

    “Article 28a

    Solvency margin for assurance undertakings conducting reinsurance activities

    If the Commission decides, pursuant to Article 56(c) of Directive 200./../EC of the European Parliament and of the Council* [reinsurance directive] to enhance the amounts used for the calculation of the required solvency margin provided for in Article 37(3) and (4), home Member States shall apply the provisions of Articles 35 to 39 of Directive 200./../EC [Reinsurance Directive] to assurance undertakings in respect of their reinsurance acceptances activities, where one of the following conditions is met:

     

    (8) The following Article 28a is inserted:

    “Article 28a

    Solvency margin for assurance undertakings conducting reinsurance activities

    1. Each Member State shall apply to assurance undertakings whose head office is situated within its territory the provisions of Articles 35 to 39 of Directive 200./../EC of the European Parliament and of the Council [reinsurance directive] in respect of their reinsurance acceptances activities, where one of the following conditions is met:

     

    a) the reinsurance premiums collected exceed 10% of their total premium;

    b) the reinsurance premiums collected exceed EUR 500 000;

    c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.”

    a) the reinsurance premiums collected exceed 10% of their total premium;

    b) the reinsurance premiums collected exceed EUR 500 000;

    c) the technical provisions resulting from their reinsurance acceptances exceed 10% of their total technical provisions.

     

    2. Each Member State may choose to apply to assurance undertakings referred to in paragraph 1 and whose head office is situated within its territory the provisions of Article 34 of Directive 200./../EC [reinsurance Directive] in respect of their reinsurance acceptance activities, where one of the conditions laid down in paragraph 1, second subparagraph is met.

     

    In that case, the Member State concerned shall require that all assets employed by the assurance undertaking to cover the technical provisions corresponding to its reinsurance acceptances be ring-fenced, managed and organised separately from the direct assurance activities of the assurance undertaking, without any possibility of transfer.

     

    In such case, and only as far as their reinsurance acceptance activities are concerned, assurance undertakings shall not be subject to Articles 22 to 26 of Directive 2002/83/EC.

     

    Member States shall ensure that their competent authorities verify the separation provided for in the second subparagraph.

    Justification

    Within reasonable limits, the directive provisions should guarantee a level playing field between reinsurers and direct insurers writing reinsurance business.

    PROCEDURE

    Title

    Proposal for a Directive of the European Parliament and of the Council on reinsurance and amending Council Directives 73/239/EEC and 92/49/EEC and Directives 98/78/EC and 2002/83/EC

    Procedure number

    COM(2004)0273 – C6‑0038/2004 – 2004/0097(COD)

    Committee responsible

    ECON

    Committee asked for its opinion
      Date announced in plenary

    JURI
    15.9.2004

    Enhanced cooperation

    No

    Drafts(wo)man
      Date appointed

    Jean-Paul Gauzès
    26.10.2004

    Discussed in committee

    7.3.2005

    31.3.2005

     

     

     

    Date amendments adopted

    31.3.2005

    Result of final vote

    for:

    against:

    abstentions:

    19

     

     

    Members present for the final vote

    Maria Berger, Bert Doorn, Piia-Noora Kauppi, Klaus-Heiner Lehne, Antonio Masip Hidalgo, Hans-Peter Mayer, Viktória Mohácsi, Aloyzas Sakalas, Francesco Enrico Speroni, Andrzej Jan Szejna, Jaroslav Zvěřina

    Substitutes present for the final vote

    Alexander Nuno Alvaro, Jean-Paul Gauzès, Kurt Lechner, Evelin Lichtenberger, Manuel Medina Ortega, Marie Panayotopoulos-Cassiotou, Ingo Schmitt, József Szájer

    Substitutes under Rule 178(2) present for the final vote

     

    • [1]  OJ C ... /Not yet published in OJ.

    PROCEDURE

    Title

    Proposal for a Directive of the European Parliament and of the Council on reinsurance and amending Council Directives 73/239/EEC and 92/49/EEC and Directives 98/78/EC and 2002/83/EC

    References

    COM(2004)0273 – C6‑0038/2004 – 2004/0097(COD)

    Legal basis

    Articles 251(2), 47(2) and 55 EC

    Basis in Rules of Procedure

    Rule 51

    Date submitted to Parliament

    21.4.2004

    Committee responsible
      Date announced in plenary

    ECON

    15.9.2004

    Committee(s) asked for opinion(s)
      Date announced in plenary

    JURI0.0.00015.9.2004

    IMCO

    15.9.2004

     

     

     

    Not delivering opinion(s)
      Date of decision

    IMCO
    8.3.2005

     

     

     

     

    Enhanced cooperation
      Date announced in plenary

     

     

     

     

     

    Rapporteur(s)
      Date appointed

    Peter Skinner
    21.9.2004

     

    Previous rapporteur(s)

     

     

    Simplified procedure
      Date of decision

     

    Legal basis disputed
      Date of JURI opinion

     

     

     

    Financial endowment amended
      Date of BUDG opinion

     

     

     

    European Economic and Social Committee consulted
      Date of decision in plenary



    Committee of the Regions consulted
      Date of decision in plenary


    0.0.0000

    Discussed in committee

    30.3.2005

     

     

     

     

    Date adopted

    27.4.2005

    Result of final vote

    for:

    against:

    abstentions:

    40

    0

    1

    Members present for the final vote

    Zsolt László Becsey, Pervenche Berès, Udo Bullmann, Ieke van den Burg, David Casa, Paolo Cirino Pomicino, Manuel António dos Santos, Jan Christian Ehler, Elisa Ferreira, Jean-Paul Gauzès, Robert Goebbels, Benoît Hamon, Gunnar Hökmark, Karsten Friedrich Hoppenstedt, Ian Hudghton, Sophia in 't Veld, Othmar Karas, Piia-Noora Kauppi, Wolf Klinz, Kurt Joachim Lauk, Astrid Lulling, John Purvis, Alexander Radwan, Dariusz Rosati, Eoin Ryan, Antolín Sánchez Presedo, Peter Skinner, Margarita Starkevičiūtė, Sahra Wagenknecht, John Whittaker, Lars Wohlin

    Substitutes present for the final vote

    Mia De Vits, Harald Ettl, Ján Hudacký, Vladimír Maňka, Thomas Mann, Poul Nyrup Rasmussen, Antonis Samaras, Charles Tannock, Henri Weber, Corien Wortmann-Kool

    Substitutes under Rule 178(2) present for the final vote

     

    Date tabled – A6

    12.5.2005

    A6-0146/2005

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