CEIOPS Proposals for a Definition of Cross-Border Provision of Service under the Insurance Mediation Directive ("IMD")

Transcription

1 CEIOPS-DOC-15/07 CEIOPS Prpsals fr a Definitin f Crss-Brder Prvisin f Service under the Insurance Mediatin Directive ("IMD") Purpse T respnd t the EIOPC 1 request t present an extensive analysis f different prpsals fr defining crss-brder services under the Insurance Mediatin Directive (IMD) 2, prmpted by the Cmmissin Services definitin prpsed 3 at the EIOPC meeting f Nvember CEIOPS analysis presents different ptins expressed by the members f its Intermediaries Expert Grup. The Eurpean Federatin f Insurance Intermediaries (BIPAR) was invited t participate t the discussin in rder t integrate the psitin f the intermediaries sectr. This paper aims t summarise the pr and cntra arguments analysed by members f CEIOPS Intermediaries Expert Grup (IMEG) and gruped under the headings f 3 main ptins. The first and secnd prpsals reflect the Cmmissin Services paper. The last prpsal was frmulated after the discussin f the first tw appraches. It was apprved by the CEIOPS Members Meeting as being the mst wrkable definitin in line with the bjectives f the IMD regarding the intentin f the intermediary, the creatin f the and cnsumer prtectin. CEIOPS wuld welcme an input frm the EC in rder t clarify this issue fr the sake f legal certainty. Backgrund The IMD as a single market directive falls within the Cmmissin s Financial Services Actin Plan t imprve the fr financial services. Its bjectives include ensuring pen and secure retail markets, i.e. fstering cmpetitin in the insurance sectr and enhancing the level f cnsumer prtectin at Eurpean level. Neither the IMD nr the CEIOPS Luxemburg Prtcl has defined Crss-Brder Prvisin f Service. In its Nvember paper, the Cmmissin Services prpse that business shuld be regarded as being carried ut under Freedm f Services (FOS) if the member state f the intermediary s establishment differs frm where the custmer has his residence r head ffice (the residence f plicyhlder test prpsal 1). An alternative suggestin has been t determine whether FOS is being exercised by reference t the test in the Secnd Nn-Life Insurance Directive (the situatin f the risk test prpsal 2). These tw EC appraches and anther, new apprach (prpsal 3), alng with the crrespnding arguments fr and against, are utlined belw. 1 Eurpean Insurance & Occupatinal Pensins Cmmittee. (Level 2 Cmmittee in the Lamfalussy prcess) 2 Directive 2002/92/EC f the Eurpean Parliament and the Cuncil f 9 December 2002 n Insurance Mediatin 3 Markt/2536/26 Nvember 2006 Insurance Mediatin 1/5

2 Prpsal 1 (Residence f Plicyhlder) 1. Definitin: An insurance intermediary is carrying ut business under FOS if the Member State in which it is established is different frm the Member State where the recipient f its services (i.e. the cnsumer/ plicyhlder) is established. 2. Arguments fr: Same apprach as adpted in the Life Assurance Directive 2002/83/EC and cnsistency with the rules n the law applicable t insurance cntracts This apprach is cnsistent with ne f the main bjectives f the IMD that is the prtectin f an intermediary s custmer. The cnditins, under which, in the interest f the general gd, the business cncerned must be cnducted, are thse f the plicyhlder s state f residence, which the plicyhlder is familiar with. Legal prf The place f residence f the plicyhlder shuld be easy t prve. 3. Arguments against The IMD is fundamentally different frm the Insurance Directives The IMD cncentrates n the relatinship between the insurance intermediary (IIM) and its client and n cnsumer prtectin, nt n the cntractual relatinship between an insurance undertaking and a cnsumer, i.e. an insurance cntract. This ptin gives rise t an utcme, in which essentially lcal transactins (IIM and risk lcated in ne Member State) have the mre cmplex elements f crss-brder activity artificially intrduced t them, due t the residence f the plicyhlder lcated in anther Member State (MS). This culd lead t situatins where the IIM is nt aware that it is acting n a crss-brder basis and therefre has t be cmpliant with the general gd rules f the MS in which its client has his habitual residence. In additin, IIM will have t passprt t all member states just t be sure t be in cmpliance with the definitin n FOS. This administrative burden wuld deter small IIM t taking crss-brder business. It wuld favur large IIMs that already have a netwrk f internatinal branches and can easily cmply with all the rules and bligatins f each MS. This is nt cnsistent with the IMD s aim f enabling insurance intermediaries t perate freely acrss the cmmunity. General gd prvisins The general gd rules t apply as regards the service f intermediary will be different frm thse with regard t the service f an insurance undertaking (IU). Such a situatin can be cnfusing fr a client. In additin, this prpsal des nt seem t take int accunt cnsumer prtectin issues in cases where the plicyhlder and the insured are different persns r entities. This is quite a cmmn situatin in particular in grup insurance, where the plicyhlder is an emplyer, a bank, a university and the insured persns are the emplyees, the card r accunt hlders, r the students). 2/5

3 Cnsumer Prtectin In certain circumstances, plicyhlders seeking insurance cverage in a MS different frm the ne where they are established r resident culd be denied such cverage. This culd be due t the fact that the lcal IIM t whm they address themselves is nt willing t write business by freedm f services, as it did nt wish t g thrugh the ntificatin prcedure. It culd als happen that this lcal IIM may simply nt be allwed t sell an insurance cntract because the deadline f ne mnth after the receptin f the answer f the authrity n the ntificatin delivery (IMD- Art 6) has nt yet been met. Prpsal 2 (Situatin f the risk) 1. Definitin An IIM carries n business under FOS if the IIM is nt established in the MS where the risk t be underwritten is lcated. 2. Arguments fr Cnsistency with the Nn-Life Insurance Directive 92/49/EEC and with the definitins in Article 2 d) f Directive 88/357/EEC and Article 1.1 g) f Directive 2002/83/EC (Cnsistency between Insurance undertakings and IIM) If the situatin f risk apprach is applied, bth insurance undertakings (IU) and IIM will fllw the general gd rules f the same MS, which is imprtant t avid distrtins f cmpetitin between IU and IIM. This will e.g. avid a situatin where it will be allwed fr an IU t advertise its insurance prduct (under the law f ne MS) but nt fr the IIM t advertise its mediatin service with respect t that prduct (because f the law f secnd MS). Legal prf In mst cases, it is nt difficult t prve the lcalisatin f the risk. 3. Arguments against The IMD is fundamentally different frm the Insurance Directives The IMD cncentrates n the relatinship between the IIM and its client and cnsumer prtectin, nt n the cntractual relatinship between an insurance undertaking and a cnsumer, i.e. an insurance cntract. This ptin gives rise t an utcme, in which essentially lcal transactins (IIM and plicyhlder lcated in ne MS) have the mre cmplex elements f crss-brder activity artificially intrduced t them, because the risk is lcated in anther MS. IIMs will have t passprt t all MS just t be sure t be in cmpliance with the definitin n FOS. This is nt cnsistent with the IMD s aim f enabling insurance intermediaries t perate freely acrss the EU. 3/5

4 Cnsumer Prtectin In certain circumstances, plicyhlders seeking insurance cverage in a MS different frm the ne where they are established r resident culd be denied such cverage. This culd be due t the fact that the lcal IIM t whm they address themselves is nt willing t write business by freedm f services, as it did nt wish t g thrugh the ntificatin prcedure. It culd als happen that this lcal IIM may simply nt be allwed t sell an insurance cntract because the deadline f ne mnth after the receptin f the answer f the authrity n the ntificatin delivery (IMD- Art 6) has nt yet been met. Prpsal 3: CEIOPS Members Meeting apprved the third prvided definitin as being the mst wrkable slutin. Nt nly des it rebut the different cntra arguments f the tw first prpsals but it als respnds t the main bjectives f the IMD: the intentin f the intermediary prvided in Art 6 f the IMD is taken int cnsideratin; this definitin creates n artificial barriers fr existing mediatin activities and it minimises the administrative burden; the prtectin f the cnsumer is guaranteed since it is the decisin f the cnsumer t request the services f a IIM perating in anther Member State. 1. Definitin An IIM is perating under FOS if it intends t supply a plicyhlder, wh is established in a Member State different frm the ne where the IIM is established, with an insurance cntract relating t a risk situated in a MS different frm the MS where the IIM is established. The IIM shuld ntify its intentin t perate under freedm f services in the sle MS where the plicyhlder is established r has his residence, als in the case the plicyhlder acts n behalf f different insured and/ r risks established r situated in ne r mre ther MS. If the IIM already ntified its intentin t perate under FOS in a MS ther than the ne where the IIM has its residence, this ntificatin prcedure is cnsidered as the legal prf f its intentin t write business under FOS with residents f that MS. If the IIM did nt ntify its intentin t perate under FOS in an ther MS, an intermediary shall nevertheless be cnsidered as having the intentin t write business under FOS with residents f that MS, when it is marketing, prviding insurance mediatin services r when it is actively seeking business frm a client/cnsumer resident r established in that MS. Nn exhaustive lists f examples: - The IIM asks fr and rganises, n its wn initiative meetings with clients established in anther cuntry. - Re advertisement: the IIM gives/sends infrmatin n specific prducts, cnditins etc t selected grups f clients established in a given cuntry / in specific languages f sme EU MS etc. Here the advertisement has an active character, the intentin f the intermediary t cntact clients in anther cuntry is clear. - Re electrnic distance r distance marketing activities: If the cntent f the website f the IIM is general and nly in the language f the MS f the intermediary, if it is nt 4/5

5 addressed t a specific grup f clients r clients in specific cuntries, then the IIM cannt be cnsidered as actively seeking fr these clients and therefre cannt be cnsidered as having the intentin t d FOS in the cuntries where thse clients are established. If the IIM is cntacted by thse clients it will nt be cnsidered as ding FOS in the cuntries f these clients. 2. Arguments fr: Cnsistency with Article 6 IMD (intentin f the IMD t prvide crss-brder services): The intermediary is nly carrying n crss-brder services when it cnscientiusly decides t d s. The IIM will nly ntify fr thse MS where it intends t prvide crss-brder services. There are n artificial barriers fr the IIM. The ther advantage f this apprach is that the same IIM is nt bliged t ntify its intentin t write business by FOS fr sme classes f business, and nt fr thers. Cnsumer prtectin The plicyhlder wh takes the initiative t request the services f an IIM established in anther MS (and/r with regard t a risk lcated in anther MS), is aware that this IIM des, a priri, nly cmply with the general gd prvisins f its (hme) MS. It can be presumed that the reasns fr a cnsumer fr chsing an IIM in anther MS than his wn is primarily nt based n the questin which general gd rules will apply in his relatin with the IIM. It can even be presumed that the cnsumer, cnsciusly r uncnsciusly, renunces t be submitted t the general gd regulatins f the MS f his residence. This des hwever nt mean that in this case the cnsumer des nt benefit frm any prtectin rule. He remains, after all, prtected nt nly by the cmmn minimum infrmatin requirements impsed by the IMD (Art 12), but als by the natinal law n insurance cntracts, and finally by the general gd rules prvided fr in the MS f the establishment f the IIM. Hwever, when the IIM has ntified its intentin t prvide crss-brder services in the MS where the plicyhlder has his residence, then it ges withut saying that it has t cmply with this hst MS s general gd prvisins. Finally, this apprach will nt place the cnsumer in a situatin where he might be denied an insurance cver abrad, specifically fr shrt-term plicies and/r fr small risks situated in anther MS than his wn. Legal prf The ntificatin prcedure r the exercise f ne f the indicative activities shall prf the intentin f the IIM t prvide crss-brder services. 5/5