Phil Hogan
Ceist:74 Mr. Hogan asked the Minister for Industry and Commerce if agreement has been reached by the European Community in respect of the Single Market and life assurance; and if he will make a statement on the matter.
Written Answers. - Life Assurance in Single Market.
A common position was achieved by member states of the EC during the Irish Presidency, on 29 June 1990, on the Second Life Assurance Freedom of Services Directive (90/619/EEC). The Directive is now due to come into effect in all the member states by 20 May 1993.
The primary purpose of the Directive is to provide harmonised rules throughout the EC governing the delivery of life assurance across EC borders by way of services without the necessity of the insurer establishing an office. Prior to the adoption of this Directive, under the First Life Assurance establishment Directive (79/267/EEC), insurance undertakings had to be established in a member state in order to do business.
The Second Directive stipulates that supervision of the insurer will be by the supervisory authorities of the member state where the risk is situated except in the case of life assurance commitments taken out on the initiative of the policyholder. The rationale behind the Directive is that these latter type of policyholders are willing and capable of choosing an insurer and safeguarding their own interests, whereas directly canvassed policyholders require the extra protection of the supervisory authorities of the member state of the risk. This Directive is the initial step towards the complete liberalisation of the life assurance market throughout the EC.
The liberalisation process in the life assurance sector will be completed with the implementation of the Third Life Assurance Framework Directive. A common position was achieved on this Directive by Council of Ministers on 29 June 1992. The Directive is due to come into effect in all the member states by 1 July 1994. Once implemented, life assurance undertakings will be able to operate freely in all member states either by establishing branches or by cross border services, supervised primarily by the member state where the head office of the undertaking is situated.