GDV German Insurance Association European Commission DG Internal Market and Services Our ref.: Dr. Fr/Rh Berlin, 18 September 2007 Consultation on a possible statute for a European Private Company (EPC); document MARKT/19.07.2007 Dear Sir or Madam, In the above-mentioned consultation paper, you asked the interested parties to set out their views on various questions. The German insurance industry is pleased to take this opportunity to make its views known, and we enclose our replies to the Commission's questions. Yours faithfully, (signed) Dr von Fürstenwahl (signed) Dr Fricke Enclosure
GDV German Insurance Association Reply of the GDV to the Consultation on a possible statute for a European Private Company (EPC); document MARKT/19.07.2007
Abstract The German insurance industry is being held back by the lack of a company form with a genuinely unified European statute. Moreover, the requirements of insurance supervision law restrict the choice of legal form. This has given rise to a situation in which operations are conducted via national subsidiaries. It would be beneficial if the legal form used in an insurance company's home Member State could also be used in the other Member States. As regards EPCs, a unified EPC Statute would be an optimum solution, although special attention would need to be focused on tax treatment and codetermination.
The German insurance industry hereby sets out its position on the questions raised by the Commission in its consultation paper. Question 1: There are no barriers related to the legal form of companies in the conduct of cross-border activities. Question 2: As far as company law is concerned, the legal framework would appear to be adequate. The possibility of cross-border mergers has improved the framework. One drawback is that there is still no company form with a genuinely European statute. Question 3: The insurance industry is supervised in every Member State. As a rule, only particular legal forms are permissible for companies wishing to conduct insurance activities. In Germany, for example, the legal form of "GmbH" is not admissible in the insurance sector (Article 7(1) of the Insurance Supervision Act (VAG)). For this reason, the legal form and further development of the SE are of considerable interest for the cross-border insurance sector. Irrespective of the above, the advantages of having the form of a European company depend crucially on the extent to which that company has a uniform European statute. The more closely the statute is bound by references to national law, the less useful such a legal form becomes. Those references could, in fact, lead to an untidy splintering of the possible legal forms. Question 4: Q4.1 and 4.2: For the insurance industry, these questions are closely bound up with the law on supervision. As a rule, national law on insurance supervision makes it necessary to run operations in individual Member States via subsidiary companies. There is, however, a trend towards running operations in individual Member States via local branches or as direct cross-border operations, wherever possible. Q4.3: It would be beneficial if the legal form used in a company's home Member State could also be used in other Member States (along the lines of a Single Company Passport), as this would allow a familiar company form and governance to be used throughout Europe. More far-reaching uniformity could be achieved by means of a European statute which did not contain references to national law. A genuinely uniform company statute will not be achievable in the foreseeable future, however. The question which therefore arises is whether priority should not be given to further developing the SE statute. Moreover, the need for adequate competition between various company forms should also be taken into account.
Q4.4: For groups of companies or holding companies, it might well be useful to have a uniform statute for subsidiaries in various Member States. The decisive factor, however, would be the degree of uniformity of the statute and its overall standard. Question 5: No comments. Question 6: Yes. In the interest of optimum flexibility, it should be possible for a company to have its registered place of business and its administrative headquarters in different Member States. Question 7: Q7.1 and 7.2: Yes Q7.3: Yes, to the extent that a significantly higher degree of uniformity can be achieved as a result. Question 8: Differences in tax systems tend to have major implications. Unified tax treatment would therefore have major consequences for the attractiveness of an EPC statute. Even without fiscal uniformity; however, the statute could have advantages in terms of corporate housekeeping and governance, depending on the extent to which company law were to be unified. The optimum solution would be a uniform EPC statute which was available to both multiple shareholders and to a single shareholder. The degree of uniformity would be decisive. As only model B is thought to hold out a real prospect of comprehensive uniformity, it would seem preferable to model A, which is largely dependent on references. Question 10: Essentially, Option 1 seems preferable. References to certain elements of national or Community law might well be advantageous if they were optional rather than compulsory, although, even if they were optional, consideration would need to be given to the relative merits of uniformity, transparency and legal certainty on the one hand and of flexibility, freedom of activity and competition between various company forms on the other. Optional references would therefore also have to be limited to certain elements.
Question 11: In order to achieve the highest possible degree of uniformity, the sector should be governed as uniformly as possible by Community law. This applies to formation, structural measures, minority rights, capital requirements, etc. In the case of sole proprietorships, the possibilities for simplification (e.g. as regards the formal requirements for shareholder meetings) should be used. As regards Board structures, there should be a choice between single- and dual-structure systems. Question 12: The essential elements are listed in the table. Question 13: A uniform or minimum standard of codetermination would appear to be the preferred option. Insofar as that is not feasible, the codetermination model of the SE should be used. The two other alternatives would not allow any kind of uniformity. Other proposals: Careful consideration should be given to whether it is appropriate to tackle a new European company statute so soon after the long and protracted work on the SE statute, and before sufficient experience with that statute has been acquired. Major corporations consider it urgent for the SE statute to be developed in such a way that a large degree of uniformity is achieved. The plethora of references to national law remains a major weakness of the SE statute. Annex: Additional Questions: No comments.