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Brussels, 25th September 2002

Life assurance: Commission welcomes Parliament's approval of simpler EU law

The European Commission has welcomed the European Parliament's approval of a Directive that will simplify European legislation on life assurance by recasting into a single text all the existing Directives on this subject. The Directive also incorporates the provisions of the Directive of 14th February 2002 (see IP/02/252) updating solvency margin requirements for life assurance companies. The Directive is now definitively adopted and will become law as soon as it has been formally signed by the Presidents of the Council and Parliament. It replaces all the Directives on life assurance adopted since 1979 and so includes rules concerning supervision, solvency and the freedom to provide insurance services throughout the EU.

Internal Market Commissioner Frits Bolkestein said, " EU law on life assurance had over the years become very complex. This Directive will make it clearer, more coherent, and easier to understand and apply. It is part of the EU's determined effort to simplify and clarify its legislation, to the benefit of businesses and customers."

The Commission presented the proposal in June 2000. The European Parliament gave a favourable opinion at the first reading without proposing any amendments. The Council, however, decided to wait until June 2002 to adopt its common position, so that it could incorporate the provisions of Directive 2002/12/EC on solvency margin requirements and ensure that the single text was completely up to date.

As the Parliament has now accepted the proposal as it stood under the Council's common position, it is now definitively adopted and will become law as soon as it has been formally signed by the Presidents of the Council and Parliament.

The Commission has embarked on a similar exercise aimed at putting the various instruments concerning non-life insurance into a single text.

Also in the insurance field, the Council is expected in the near future to definitively adopt the Directive on Insurance Intermediaries, which aims to improve customer protection while making it easier for insurance brokers, advisers and other intermediaries to provide their services across EU borders.


There have been several Directives covering life assurance adopted over the last 23 years.

The First Directive was adopted in 1979 (79/267/EEC). It lays down the fundamental principles of the supervisory regime for life assurance (i.e. authorisation of life assurance undertakings by a competent authority, constitution of adequate sufficient technical provisions and of a solvency margin).

The Second Directive, adopted in 1990 (90/619/EEC), modified and complemented the First Directive in order to allow life assurance providers to benefit from the freedom to provide services across borders.

The Third Directive of 1992 (92/96/EEC) amends and builds on the earlier directives in order to set up a "single passport" for life assurance undertakings, which means that once an undertaking is authorised to operate by its home Member State, it can operate anywhere in the EU under the financial supervision of the home Member State.

Subsequently, Directives adopted in 1995 (95/26/EC, "post-BCCI directive"), 2000 (2000/64/EC) and 2002 (2002/12/EC, solvency margin Directive) have completed the legal framework. Since the piecemeal development of the legal regime over the years had made it rather complex, the Directives needed to be reorganised into one single and coherent text.

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