Insurance Intermediaries
Life Insurance
On January 15 2003 the Insurance Mediation Directive (2002/92/EC) entered into force following its publication in the Official Journal. Member states must adopt implementing measures by January 15 2005.
The directive provides for minimum professional standards for the registration and supervision of intermediaries by their home member state, allowing them to carry on cross-border business in the European Union. In other words, the directive introduces the 'single licence' and 'European passport' for intermediaries on terms similar to the regimes for insurance undertakings, credit institutions and investment firms.
To this end, intermediaries who carry on insurance or reinsurance mediation are required under the directive to be registered on the basis of the following criteria:
- possession of appropriate knowledge and ability, as determined by the regulations applicable in the member states of registration;
- good repute;
- possession of professional indemnity insurance or a comparable guarantee against liability arising from professional negligence, for at least €1 million applying to each claim and in aggregate €1.5 million a year for all claims; and
- sufficient financial capacity for handling the funds of their customers.
At present, there are widely divergent rules on insurance intermediaries, resulting in barriers to market entry. The directive is intended to ensure the free movement of brokers and agents throughout the European Union.
On November 5 2002 the European Parliament and Council adopted the 'recast' Life Insurance Directive.
The directive codifies the three 'generations' of Life Insurance Directives adopted in 1979, 1990 and 1992, and also resolves certain discrepancies which had arisen from implementation of the previous directives.
The directive entered into force on the day of its publication in the Official Journal, December 15 2002. Member states must adopt the appropriate implementing measures within 18 months.
For further information on this topic please contact Philip Woolfson at Oppenheimer Wolff & Donnelly by telephone (+32 2 626 0500) or by fax (+32 2 626 0510) or by email ([email protected]).