S.I. No. 142/1991:

EUROPEAN COMMUNITIES (NON-LIFE INSURANCE) (AMENDMENT) (NO. 2) REGULATIONS, 1991.

EUROPEAN COMMUNITIES (NON-LIFE INSURANCE) (AMENDMENT) (NO. 2) REGULATIONS, 1991.

I, DESMOND O'MALLEY, Minister for Industry and Commerce, in exercise of the powers conferred on me by section 3 of the European Communities Act, 1972 (No. 27 of 1972), and for the purposes of giving effect to Council Directive No. 88/357/EEC of 22 June, 1988, hereby make the following Regulations:

1. (1) These Regulations may be cited as the European Communities (Non-Life Insurance) (Amendment) (No. 2) Regulations, 1991, and shall come into operation on the 17th June, 1991.

(2) These Regulations shall be construed as one with the Principal Regulations, as amended.

2. In these Regulations:

"Insurance Regulations" means the Insurance Acts 1909 to 1990, regulations relating to insurance business made under those Acts and Regulations made under the European Communities Act, 1972 , including these Regulations;

"the Principal Regulations" means the European Communities (Non-Life Insurance) Regulations 1976 (S.I. 115 of 1976).

3. Article 2(1) of the Principal Regulations is hereby amended by the substitution for the definition of "authorisation" of the following:

" 'authorisation' except where the context otherwise requires means--

(i) authorisation granted by the Minister under these Regulations,

(ii) authorisation granted by the authority charged by law with the duty of supervising the activities of insurance undertakings in a State which is a member of the European Communities in accordance with Article 6 of the First Directive;

and references to authorisation, in relation to non-life insurance in the Insurance Act, 1989 , shall be construed accordingly;".

4. (1) Article 2(1) of the Principal Regulations is hereby amended by the addition of the following definitions--

"the first Directive" means EEC Council Directive 73/239/EEC⁽¹⁾

"the second Directive" means EEC Council Directive 88/357/EEC⁽²⁾

"undertaking", except where the context otherwise requires, means--

(i) for the purposes of carrying on non-life insurance in the State from an establishment in the State:

the holder of an authorisation under Article 6 or Article 23 of the first Directive;

(ii) for the purposes of carrying on non-life insurance by way of services into the State from an establishment in another member State:

the holder of an authorisation under Article 6 of the first Directive;

"establishment" means the head office, agency or branch of an undertaking subject to Article 3 of the second Directive;

"member State where the risk is situated" means:

(i) the member State in which the property is situated, where the insurance relates either to buildings or to buildings and their contents, in so far as the contents are covered by the same insurance policy,

⁽¹⁾O.J. No. L 228, 16.8.1973, p.3.

⁽²⁾O.J. No. L 172, 4.7.1988, p.1.

(ii) the member State of registration, where the insurance relates to vehicles of any type,

(iii) the member State where the policyholder took out the policy in the case of policies of a duration of four months or less covering travel or holiday risks, whatever the class concerned,

(iv) the member State where the policyholder has his habitual residence, or, if the policyholder is a legal person, the member State where the latter's establishment, to which the contract relates, is situated, in all cases not explicitly covered by the foregoing subparagraphs;

"member State of establishment" means the member State in which the establishment covering the risk is situated;

"member State of provision of services" means the member State in which the risk is situated when it is covered by an establishment situated in another member State;

"large risks" has the meaning assigned to it by Article 3A of the Principal Regulations, inserted by Article 5 of these Regulations.

(2) Article 2 of the Principal Regulations is hereby amended by the substitution, for subarticle (2), of the following:

"(2) In these Regulations any word or phrase to which a meaning is assigned by the first Directive or by the second Directive has that meaning.".

5. The Principal Regulations are hereby amended by the addition of the following Articles:

"3A. (1) For the purposes of these Regulations 'large risks' means:

( a ) risks classified under classes 4, 5, 6, 7, 11 and 12 of the Annex;

( b ) risks classified under classes 14 and 15 of the Annex, where the policyholder is engaged in an industrial, commercial or professional activity and the risks relate to such activity;

( c ) risks classified under classes 8, 9, 13 and 16 of the Annex in so far as the policyholder exceeds the limits of at least two of the following three criteria:

first stage: until 31 December, 1992:

balance sheet total: 12.4 million ECU;

net turnover: 24 million ECU;

average number of employees during the financial year: 500

second stage: from 1 January 1993:

balance sheet total: 6.2 million ECU;

net turnover: 12.8 million ECU;

average number of employees during the financial year: 250.

(2) Where the policyholder belongs to a group of undertakings for which consolidated accounts within the meaning of Council Directive 83/349/EEC⁽³⁾ are drawn up, the criteria specified in paragraph (c), subarticle (1) of this Article shall be applied on the basis of consolidated accounts.

(3) Risks insured for professional associations, joint ventures or temporary groupings shall also be classified as large risks where they comply with the criteria under paragraph (c) of subarticle (1) of this article.".

"3B. For the purposes of the Principal Regulations general and special policy conditions shall not include specific conditions to meet, in an individual case, the particular circumstances of the risk to be covered.".

6. (1) Article 4 of the Principal Regulations is hereby amended by the addition of the following after Article 4, subarticle (2) (b):

⁽³⁾O.J. No. L193, 18.7.1983, p.I.

"(2A) For the purpose of these Regulations any permanent presence of an insurance undertaking in a member State shall shall be regarded as an agency or branch, even if that presence does not take the form of a branch or agency but consists merely of an office managed by the insurance undertaking's own staff or by a person who is independent but has permanent authority to act for the insurance undertaking in the same way as an agency."

(2) Article 4 of the Principal Regulations is hereby amended by the substitution, for subarticle (6), of the following:

"(6) ( a ) An undertaking which has its head office in another member State and is the holder of an authorisation granted by the supervisory authorities of that member State in respect of the carrying on of insurance business in the classes of the Annex to which the second Directive applies shall be deemed to be carrying on insurance business in the State where through an establishment situated in another member State it covers a risk situated in the State, notwithstanding subarticle (1) of this Article.

( b ) An undertaking which has its head office in another member State and is the holder of an authorisation granted by the supervisory authorities of another member State in respect of the carrying on of insurance business in the classes of the Annex to which the second Directive applies may, notwithstanding subarticle (1) of this Article, carry on in the State insurance business, subject to Article 13 of the second Directive in the classes of the Annex to which the second Directive applies from an establishment in another member State provided that the undertaking concerned complies with the appropriate provisions of these Regulations.

( c ) An undertaking whose head office is situated in a State which is not a member of the European Communities and which is the holder of an authorisation granted by the supervisory authorities of that State or which is the holder of an authorisation granted by the supervisory authorities of a member State under Article 23 of the first Directive in respect of the carrying on of business in insurance of a class to which these Regulations apply may, notwithstanding subarticle (1) of this Article, carry on in the State insurance business by way of services in the following classes of the Annex, namely, 4, 5, 6, 7, 11 and 12 and in classes 1 and 10 in so far as they relate to the insurance of passengers in marine and aviation vehicles and carrier's liability insurance, respectively, provided that the undertaking complies with the provisions of these Regulations relating to large risks and such business shall be deemed to be insurance business carried on in the State."

7. Article 5 of the Principal Regulations is hereby amended by the substitution for subarticle (3) of the following:

"(3) Subject to these Regulations, the Insurance Regulations shall, subject to any necessary modifications, apply to all undertakings to which these Regulations relate.".

8. Article 14 of the Principal Regulations is hereby amended by the substitution of the following for subarticle 14 (5):

"(5) For the purposes of applying the first subparagraph of Article 15 (2) and Article 24 of the first Directive, assets representing an underwriting liability shall be determined in accordance with Section E of the Annex (inserted by amendment Regulations of 1991) relating to matching rules."

9. The Principal Regulations are hereby amended by the insertion of the following Article:

"21A. The Minister may take any measures in accordance with the Insurance Regulations with regard to an undertaking which is established in the State to ensure that the activities of the undertaking remain in conformity with the laws, regulations and administrative provisions with which the undertaking has to comply in another member State.".

10. (1) The Principal Regulations are hereby amended by the substitution for Article 22 of the following Article:

"Assignment of Policies

22. (1) Subject to the provisions of Section 13 of the Assurance Companies Act, 1909, Section 36 of the Insurance Act, 1989 and of the Insurance Regulations and following consultation with the Minister, an undertaking may assign all or part of its portfolio of policies in accordance with the following subarticles of this Article.

(2) Where an undertaking established in the State proposes to transfer all or part of its portfolio of policies covering risks situated in the State in accordance with Article 2 (d) of the second Directive to an assignee established in the State, the assignment shall not be effected unless the assignee possesses the necessary solvency margin after taking the assignment into account.

(3) Where the assignee's head office is situated in the territory of another member State, the assignment shall not be effected unless the supervisory authorities of that member State certify that the assignee possesses the necessary solvency margin required by these Regulations after taking the assignment into account.

(4) Where an undertaking proposes to assign all or part of its portfolio of policies to an undertaking established in another member State whose head office is situated in the State, the Minister shall, if he is satisfied that the latter undertaking possesses the necessary solvency margin after taking the proposed assignment into account, issue a certificate to that effect.

(5) Where an undertaking established in that State proposes to transfer all or part of its portfolio of policies covering insurance businness carried on by way of services in accordance with Article 12(1) of the second Directive to an assignee established in the member State of provision of services, the assignment shall not be effected unless the supervisory authorities of the member State in which the head office of the assignee is situated certify that thte assignee possesses the necessary solvency margin after taking the transfer into account.

(6) Where an undertaking established in the State proposes to transfer all or part of its portfolio of policies covering insurance business carried on by way of services in accordance with Article 12 (1) of the second Directive to an assignee established in the State, the assignment shall not be effected unless the supervisory authorities of the member State in which the head office of the assignee is situated certify that the assignee possesses the necessary solvency margin after taking the transfer into account and if the undertaking fulfils the conditions of Articles 13 to 16 of the second Directive in the member State of provision of services.

(7) In the cases referred to in subarticles (5) and (6) of this Article, the assignment shall not be effected without the agreement of the supervisory authorities of the member State of provision of services.

(8) Where an undertaking established in the State proposes to assign all or part of its portfolio of policies to an assignee established in a member State which is not the member State of provision of services, the assignment shall not be effected unless the following conditions are fulfilled:

( a ) the supervisory authorities of the member State in which the assignee's head office is situated certify that the assignee possesses the necessary solvency margin after taking the transfer into account;

( b ) the supervisory authorities of the member State in which the assignee is established agree to the assignment;

( c ) the assignee fulfils the conditions of Articles 13 to 16 of the second Directive in the member State of provision of services;

( d ) the assignment is not in contravention of the laws of the member State of provision of services;

( e ) the supervisory authorities of the member State of provision of services agree to the assignment.

(9) ( a ) An assignment effected in accordance with this Article shall be published subject to the provisions of subarticle (1) of this Article by advertisement once in Iris Oifigiúil and once in each of two daily newspapers published in the State and published in the member State where the risk is situated in accordance with the national law of that Member State.

( b ) An assignment effected in accordance with this Article shall be valid against the policyholders, the insured persons and any other person having rights and obligations arising out of the policies assigned.".

Law applicable to contracts of insurance

11. (1) The law applicable to a contract of insurance which covers risks situated within the State or within other member States shall be determined in accordance with the following provisions:

( a ) Where a policyholder has his habitual residence or central administration within the territory of the member State where the risk is situated, the law applicable to the insurance contract shall be the law of that member State; however where the law of that member State so allows, the parties may choose the law of another country.

( b ) Where a policyholder does not have his habitual residence or central administration in the member State where the risk is situated, the parties to the insurance contract may choose to apply either the law of the member State in which the risk is situated or the law of the country in which the policyholder has his habitual residence or central administration.

( c ) Where a policyholder pursues a commercial, industrial or professional activity and where the contract covers two or more risks relating to these activities and situated in different member States, the freedom of choice of the law applicable to the contract extends to the laws of those member States and of the country in which policyholder has his habitual residence or central administration.

( d ) Notwithstanding paragraphs (b) and (c) of this subarticle, where the member States referred to in those paragraphs grant greater freedom of choice of the law applicable to the contract, the parties may take advantage of this freedom.

( e ) Notwithstanding paragraphs (a), (b) and (c) of this subarticle, where the risks covered by the contract are limited to events occurring in a member State other than the member State where the risk is situated the parties may always choose the law of the former State.

( f ) For risks referred to in Article 5 (d) (i) of the first Directive the parties to the contract may choose any law.

( g ) Notwithstanding paragraphs (a) to (f) of this subarticle, where all the other elements relevant to the situation at the time of the choice are connected with one member State only, nothing shall prejudice the application of the mandatory rules of the law of that member State, from which the law of that member State allows no derogation by means of a contract.

( h ) (i) The choice of law referred to in the preceding paragraphs of this Article must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case.

(ii) If that is not so, or if no choice has been made, the contract shall be governed by the law of the country, from amongst those considered in the relevant subparagraphs of this Article, with which it is most closely connected.

(iii) Nevertheless, a severable part of the contract which has a closer connection with another country, from amongst those considered in the relevant subparagraphs of this subarticle may by way of exception be governed by the law of that other country. The contract shall be rebuttably presumed to be most closely connected with the member State in which the risk is situated.

(iv) Where a member State includes several territorial units, each of which has its own rules of law concerning contractual obligations, each unit shall be considered as a country for the purposes of identifying the applicable law.

(2) ( a ) Nothing in this Article shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract.

( b ) Where the law of a member State so stipulates, the mandatory rules of the law of the member State in which the risk is situated or of the member State imposing the obligation to take out insurance may be applied if and in so far as, under the laws of those States, those rules must be applied whatever the law applicable to the contract.

( c ) Where the contract covers risks situated in more than one member State, the contract is considered for the purposes of applying this paragraph as constituting several contracts each relating to only one member State.

(3) Subject to the preceding subparagraphs of this Article, the laws of the State relating to the general rules of private international law shall be applied to the insurance contracts covered by these Regulations.

Compulsory Insurance

12. In the case of a conflict of law between the law of the member State in which the risk is situated and the law of the member State which is imposing the obligation to take out insurance, the law of the latter shall prevail.

Provision of insurance by way of services

13. (1) References to the carrying on of insurance business by way of services into a member State shall be construed as the covering of a risk situated as defined in Article 2(d) of the second Directive by an undertaking through an establishment situated in another member State.

(2) The subsequent Articles shall not apply to transactions, undertakings and institutions referred to in Article 3 (2) of the Principal Regulations nor to the risks to be covered by the Voluntary Health Insurance Board in accordance with the law of the State.

(3) The provisions of these Regulations relating to the carrying on of insurance by way of services shall not apply to risks of a class specified in the Annex as follows:

Class 1 insofar as it relates to accidents at work;

Class 10 except for carriers liability;

Class 12 insofar as it relates to motorboats and boats which, on 30 June 1988, were subject to the same arrangements as land motor vehicles in the member State in which the risk is situated;

Class 13 insofar as it relates to nuclear civil liability and pharmaceutical products liability;

Classes 9 and 13 insofar as they relate to the compulsory insurance of building works.

(4) An insurance undertaking which has an establishment in the State shall not at the same time carry on insurance business in the State from an establishment in another Member State by way of services in respect of risks other than large risks in classes of the Annex for which its establishment in the State has an authorisation.

Carrying on of insurance business by way of services into another member State

14. (1) This Article shall apply to--

( a ) an undertaking whose head office is situated in the State and which intends to carry on insurance business by way of services into another member State from an establishment in the State or from a branch or agency in another member State;

( b ) an undertaking whose head office is situated in the territory of another member State which intends to carry on insurance business by way of services into another member State from an establishment in the State.

(2) An undertaking referred to in subarticle (1) of this Article shall send a notification to the Minister containing the following information:

( a ) in respect of each member State in which it intends to carry on insurance business by way of services the nature of the risks which the undertaking proposes to cover;

( b ) a scheme of operations in accordance with Article 9 or 11 of the first Directive.

(3) ( a ) An undertaking referred to in subarticle (1) (a) of this Article shall apply to the Minister for a certificate attesting that it possesses for its activities as a whole the minimum solvency margin calculated in accordance with Articles 16 and 17 of the first Directive and that the authorisation in accordance with Article 7(1) of the first Directive, enables the undertaking to operate outside the member State of establishment.

( b ) An undertaking as specified at subarticle (1) (b) of this Article shall apply to the Minister for a certificate indicating the classes of insurance which the undertaking is entitled to carry on through its establishment in the State and attesting that the Minister does not object to the undertaking carrying on insurance business by way of services.

( c ) Where the Minister decides to refuse an application for the certificates referred to in Articles 15 (1) (a) and 15 (1) (b) of the second Directive, he shall notify his decision to the applicant and shall, in the notification, specify the precise grounds for his decision.

( d ) An undertaking whose application for the certificates referred to in subparagraphs (a) and (b) of this subarticle has been refused may appeal against the refusal to the High Court.

( e ) Where an undertaking as specified at subarticle (1) of this Article has notified the Minister of its intention to carry on insurance business by way of services and which intends to extend its activities to other risks, it shall follow the procedures laid down in this Article.

Carrying on of insurance business by way of services into the State

15. (1) An undertaking shall not carry on insurance business by way of services into thte State in respect of the coverage of risks other than large risks unless it is the holder of an authorisation granted by the Minister under this Article and unless it carries on such insurance business by way of services in accordance with the terms of the authorisation.

(2) An undertaking which intends to carry on insurance business by way of services into the State in respect of the coverage of risks other than large risks shall, when applying for an authorisation, submit to the Minister:

( a ) a certificate issued by the supervisory authorities of the member State in whose territory the head office is situated attesting that it possesses for its activities as a whole the minimum solvency margin calculated in accordance with Articles 16 and 17 of the first Directive and that this authorisation in accordance with Article 7 (1) of the first Directive, enables the undertaking to carry on insurance business outside the member State of establishment;

( b ) a certificate issued by the supervisory authorities of the member State of establishment indicating the classes of insurance which the undertaking is entitled to carry on through that establishment and attesting that those authorities do not object to the undertaking carrying on insurance business by way of services into the State;

( c ) a scheme of operations containing the following particulars--

(i) the nature of the risks which the undertaking proposes to cover in the State;

(ii) the general and special conditions of the insurance policies which it proposes to use in the State;

(iii) the premium rates which the undertaking envisages applying for each class of business;

(iv) the forms and other printed documents which the undertaking intends to use in its dealings with policyholders in so far as these are required of undertakings established in the State.

(3) The Minister may require that particulars referred to in subarticle (2) (c) are supplied in the English or Irish languages.

(4) The Minister shall, within a period of six months from the date of receipt by him of all the documents referred to in subarticle (2) of this Article, grant or refuse an authorisation on the basis of the compliance or non-compliance of the particulars in the scheme of operations referred to in subarticle (2) (c) of this Article with the laws, regulations and administrative provisions applicable in the State.

(5) Where the Minister has not given a decision at the expiry of the period referred to in subarticle (4) of this Article, the authorisation shall be deemed to be refused.

(6) Where the Minister decides to refuse an application for an authorisation in accordance with this Article, he shall notify his decision to the applicant and shall in the notification specify the precise grounds for his decision.

(7) An undertaking whose application for an authorisation in accordance with this Article has been refused may appeal against the refusal to the High Court.

(8) Where an undertaking which carries on insurance business by way of services intends to amend the information required under subarticle (2) (c) of this Article, it shall submit such amendments to the Minister and these amendments shall enter into force in accordance with subarticle (4) of this Article.

(9) Where an undertaking has notified the Minister of its intention to carry on insurance business by way of services into the State and wishes to extend its coverage of risks to large risks, it shall follow the procedures laid down in Article 16 of these Regulations in respect of such risks.

16. (1) An undertaking which intends to carry on insurance business by way of services into the State covering the risks referred to in Article 5 (d) of the first Directive shall provide to the Minister:

( a ) a certificate issued by the supervisory authorities of the member State in whose territory its head office is situated, attesting that it possesses for its activities as a whole the minimum solvency margin calculated in accordance with Articles 16 and 17 of the first Directive and that this undertaking's authorisation in accordance with Article 7 (1) of the first Directive, enables the undertaking to carry on insurance business outside the member State of establishment.

( b ) a certificate issued by the supervisory authorities of the member State of establishment indicating the classes of insurance which the undertaking is entitled to carry on through that establishment and attesting that those authorities do not object to the undertaking carrying on insurance business by way of services into the State.

( c ) a statement of the nature of the risks which it proposes to cover in the State.

(2) An undertaking shall not provide insurance by way of services into the State before the date certified as that on which all of the documents referred to in subarticle (1) of this Article are received by the Minister.

(3) Where an undertaking intends to carry on insurance business by way of services into the State in respect of large risks other than those referred to in the statement submitted in accordance with subarticle (1) (c) of this Article, it shall submit such amendments to the Minister and it shall not carry on insurance business by way of services into the State in respect of such risks before the date certified as that on which the written notice of the amendment was received by the Minister in accordance with subarticle (2) of this Article.

(4) Where an undertaking which carries on insurance business by way of services into the state for large risks in accordance with this Article intends to extend its activities to risks other than large risks, it shall follow the procedures laid down in Article 15 of these Regulations in respect of such risks.

Powers of Intervention

17. (1) Nothing in these Regulations shall prevent the introduction by the Minister of laws, regulations or administrative provisions concerning in particular the approval of general policy conditions, of forms and other printed documents, of scales of premiums and of any other document necessary for the normal exercise of supervision where the rules of the member State of establishment are not sufficient to achieve the necessary level of protection.

(2) ( a ) Notwithstanding subarticle (1) of this Article, in the case of the coverage of large risks the Minister shall not make provisions requiring approval or systematic notification of general and special policy conditions, scales of premiums, forms and other printed documents which the undertaking intends to use in its dealing with policyholders;

( b ) In the case of large risks the Minister may require non-systematic notification of general and special policy conditions and other documents for the purposes of verifying compliance with laws, regulations and administrative provisions although this notification may not constitute a prior condition for an undertaking to carry on insurance business in the State.

(3) In the case of large risks the Minister may retain or introduce prior notification or approval of proposed increases in premium rates where such notification or approval is operated as part of a general price control system.

18. (1) Where an undertaking is carrying on insurance business by way of services into the State, it shall submit to the Minister all documents requested of it for the purposes of implementing this Article in so far as an undertaking established in the State is also required to do so.

(2) Where an undertaking carrying on insurance business by way of services into the State does not comply with the Insurance Regulations, the Minister shall request the undertaking to do so.

(3) Where an undertaking fails to comply with the request referred to in subarticle (2) of this Article, the Minister shall inform the supervisory authorities of the member State of establishment and, where appropriate, the supervisory authorities of the member State in which the head office of the undertaking is situated.

(4) ( a ) If after invoking the procedures of subarticles (2) and (3) of this Article, the measures taken against the undertaking carrying on insurance business by way of services into the State are not adequate and the undertaking continues to contravene the Insurance Regulations, the Minister may, after informing the supervisory authorities of the member State of establishment, take further appropriate measures, including in so far as is strictly necessary and in accordance with the Insurance Regulations, the prevention of that undertaking from continuing to carry on insurance business by way of services into the State.

( b ) Where an undertaking referred to at paragraph (a) of this subarticle covers risks other than large risks, the measures which may be taken by the Minister shall include withdrawal of authorisation in accordance with Article 15 of the second Directive.

(5) Nothing in this Article shall affect the powers of the State to proceed against an undertaking for failing to comply with the laws of the State.

(6) Where an undertaking carrying on insurance business by way of services into the State has contravened the Insurance Regulations and has an establishment or possesses property in the State, the Minister may apply the penalties prescribed by the Insurance Regulations by way of enforcement against the establishment or property of the undertaking in the State.

(7) ( a ) Any measure adopted by the Minister pursuant to subarticles (2) to (6) of this Article shall be communicated to the undertaking and shall be supported by the precise grounds for the adoption of the measure.

( b ) The undertaking may appeal against any measures adopted pursuant to Articles (2) to (6) of this Article to the High Court.

( c ) Where the Minister is advised by the member State of establishment of an undertaking which is carrying on insurance business by way of services into the State that measures have been taken against that undertaking under the terms of subarticles (1) and (3) of Article 20 of the first Directive, he may take any further measures which he considers necessary to safeguard the interests of the policyholders.

( d ) When the member State of establishment of an undertaking which is carrying on insurance business by way of services into the State revokes the authorisation of that undertaking in accordance with Article 22 of the first Directive, the Minister shall take appropriate measures to prevent the undertaking from continuing to carry on insurance business by way of services into the State in accordance with the Insurance Regulations.

(8) ( a ) Where measures have been adopted pursuant to Article 20 of the first Directive against an undertaking established in the State carrying on insurance business by way of services into another member State, the Minister shall inform the supervisory authorities of the member State of provision of services.

( b ) Where the Minister decides to revoke the authorisation of an undertaking established in the State in accordance with Article 22 of the first Directive he shall inform the supervisory authorities of the member State of provision of services.

( c ) Where the supervisory authorities of another member State request the Minister to take appropriate measures in relation to the non-compliance with the laws of that state by an undertaking which has an establishment in the State and which is carrying on insurance business by way of services into the former member State, the Minister shall take appropriate measures and the nature of such measures shall be communicated to the supervisory authorities of that member State of provision of services.

General provisions regarding carrying on insurance business by way of services

19. (1) In the event of an undertaking established in the State being wound up, commitments arising from contracts underwritten in the course of carrying on insurance business by way of services shall be met in the same way as those arising under that undertaking's other insurance contracts, without distinction of nationality, as far as the insured and the beneficiaries are concerned.

(2) Where an undertaking carries on insurance business by way of services for risks other than large risks, the undertaking shall inform the policyholder before any commitment is entered into of the member State where the establishment is situated through which the insurance cover is to be granted, which information shall also be included on any document issued to the policyholder.

(3) The contract of insurance or other document granting insurance cover together with the insurance proposal shall specify the address of the establishment granting cover by way of services and the address of the head office of the undertaking.

20. (1) ( a ) An undertaking which carries on insurance business by way of services into another member State through an establishment in the State shall submit to the Minister, in respect of operations effected by way of services, the amount of premiums without deduction of re-insurance by member State and by groups of classes as specified in subarticle 1 (b) of this subarticle.

( b ) The groups of classes referred to in subarticle 1 (a) of this Article shall be defined as follows:

(i) accident and sickness (1 and 2);

(ii) fire and other damage to property (8 and 9);

(iii) aviation, marine and transport (3, 4, 5, 6, 7, 11 and 12);

(iv) general liability (13);

(v) credit and suretyship (14 and 15)

(vi) other classes (16, 17 and 18).

( c ) The Minister shall forward the information provided in accordance with subarticle 1 (a) of this Article to the supervisory authorities of each of the member States of provision of services.

(2) ( a ) Where an establishment in the State earns in respect of the carrying on of insurance business by way of services into another member State, a volume of premiums, without deduction of re-insurance, exceeding 2,500,000 ECU, it shall keep an underwriting account as specified in section F (1) or F (2) (inserted by Article 25 of these Regulations) of the Schedule to the Principal Regulations by groups of classes as defined in subarticle (1) (b) of this Article in respect of each member State.

( b ) Where an undertaking whose head office is situated in the State, with all its establishments taken together, earns in respect of the carrying on of insurance business by way of services into another member State, a volume of premiums, without deduction of re-insurance, in excess of 2,500,000 ECU, it shall keep an underwriting account as specified in paragraph (a) in respect of such business for each of that undertaking's establishments and such underwriting account shall be made available to the Minister at his request.

( c ) The underwriting account referred to in subarticles 2 (a) or 2 (b) of this Article in respect of an undertaking established in the State shall be forwarded to the supervisory authorities of the member State of provision of services on the latter's request.

Technical Reserves Provisions

21. (1) An undertaking which is the holder of an authorisation from the Minister in accordance with Article 15 of the second Directive shall establish and maintain technical reserves relating to its business carried on by way of services under Article 15 of the second Directive in accordance with Article 14 of the Principal Regulations.

(2) An undertaking which carries on insurance business by way of services into another member State through an establishment in the State shall establish and maintain technical reserves relating to its business carried on by way of services in accordance with Article 14 of the Principal Regulations.

(3) Notwithstanding Article 14, subarticle (2) of the Principal Regulations, an undertaking carrying on insurance business by way of services into another member State from an establishment in the State for risks other than large risks shall not be required to localise in the State assets of an amount equal to the technical reserves relating to such business where such assets are required under Article 15 of the second Directive to be localised in that member State of services.

(4) The Minister shall supply to the supervisory authorities of other member States any information necessary to fulfil the requirements of this Article.

22. (1) The Minister shall require undertakings carrying on insurance business by way of services into the State including those undertakings referred to in subarticle 6 (c) of Article 4 of the Principal Regulations to join and participate in any scheme designed to guarantee the payment of insurance claims to policyholders and injured third parties on the same terms as established undertakings.

(2) For the purposes of this Article notwithstanding Article 2 (d) of the Second Directive, the moveable property contained in a building situated in the territory of the State, except for goods in commercial transit, shall be a risk situated in the State, even though the building and its contents are not covered by the same insurance policy.

(3) For the purposes of subarticle (1) of this Article and section 31 of the Insurance Act 1989 an insurance undertaking established in another member State carrying on business by way of services into the State in respect of risks situated in the State shall be deemed to be an insurer in the State and such policies issued by it by way of services insurance business into the State shall be deemed to be policies issued in the State.

23. Where reference is made in these Regulations to the ECU, the exchange value to be used with effect from the 31st December of each year shall be the value which applies on the last day of the preceding October for which exchange values for the ECU are available in all Community currencies with the exception of Articles 3, 16 and 17 of the first Directive, where Article 2 of Directive 76/580/EEC⁽⁴⁾ shall apply.

Community Coinsurance

24. (1) In the case of a risk situated in the State, the provisions of these Regulations regarding large risks shall apply to the leading insurer participating in a Community coinsurance operation.

(2) The European Communities (Coinsurance) Regulations, 1983 are hereby amended by the insertion in Article

(4)O.J. No. L189, 13.7.1976, p.13.4 (1) after "leading insurer who is the holder of an authorisation" the words "granted by a supervisory authority of a member State of the European Communities".

⁽⁴⁾O.J. No. L189, 13.7.1976, p.13.

(3) The European Communities (Coinsurance) Regulations, 1983 are hereby amended by the deletion of subarticle (2) of Article 4.

(4) The European Communities (Coinsurance) Regulations, 1983 are hereby amended by the deletion of paragraph 2 of the Schedule and by the substitution of the following for paragraph 3 of the Schedule:

"The criteria referred to in paragraph 1 (b) of this Schedule are:

-- The policyholder pursues an independent occupation of a commercial, industrial or professional nature and the risk covered relates to that occupation.

-- Large risks as set out in accordance with Article 3A of the Principal Regulations excluding Class 13 insofar as it relates to damage arising from nuclear sources or from medicinal products."

25. Schedule 1 of the Principal Regulations is hereby amended by the insertion, after Section D (inserted by S. I. No. 5 of 1991 ) of Annex 1 and Annex 2 of the second Directive, of the following as Sections E and F of that Schedule:

"E. MATCHING RULES

The currency in which the insurer's commitments are payable shall be determined in accordance with the following rules:

1. Where the cover provided by a contract is expressed in terms of a particular currency, the insurer's commitments are considered to be payable in that currency.

2. Where the cover provided by a contract is not expressed in terms of any currency, the insurer's commitments are considered to be payable in the currency of the country in which the risk is situated. However, the insurer may choose the currency in which the premium is expressed if there are justifiable grounds for exercising such a choice.

This could be the case if, from the time the contract is entered into, it appears likely that a claim will be paid in the currency of the premium and not in the currency of the country in which the risk is situated.

3. The Member States may authorize the insurer to consider that the currency in which he must provide cover will be either that which he will use in accordance with experience acquired or, in the absence of such experience, the currency of the country in which he is established:

-- for contracts covering risks classified under classes 4, 5, 6, 7, 11, 12 and 13 (producers' liability only), and

-- for contracts covering the risks classified under other classes where, in accordance with the nature of the risks, the cover is to be provided in a currency other than that which would result from the application of the above procedures.

4. Where a claim has been reported to an insurer and is payable in a specified currency other than the currency resulting from application of the above procedures, the insurer's commitments shall be considered to be payable in that currency, and in particular the currency in which the compensation to be paid by the insurer has been determined by a court judgement or by agreement between the insurer and the insured.

5. Where a claim is assessed in a currency which is known to the insurer in advance but which is different from the currency resulting from application of the above procedures, the insurers may consider their commitments to be payable in that currency.

6. The Member States may authorize undertakings not to cover their technical reserves by matching assets if application of the above procedures would result in the undertaking -- whether head office or branch -- being obliged in order to comply with the matching principle, to hold assets in a currency amounting to not more than 7 per cent of the assets existing in other currencies.

However:

(a) in the case of technical reserves assets to be matched in Greek drachmas, Irish pounds and Portuguese escudos, this amount shall not exceed:

-- 1 million ECU during a transitional period ending 31 December 1992,

-- 2 million ECU from 1 January 1993 to 31 December 1998;

(b) in the case of technical reserve assets to be matched in Belgian francs, Luxembourg francs and Spanish pesetas, this amount shall not exceed 2 million ECU during a transitional period ending 31 December 1996.

From the end of the transitional periods defined under (a) and (b), the general regime shall apply for these currencies, unless the Council decides otherwise.

7. The Member States may choose not to require undertakings -- whether head offices or branches -- to apply the matching principle where commitments are payable in a currency other than the currency of one of the Community member States, if investments in that currency are regulated, if the currency is subject to transfer restrictions or if, for similar reasons, it is not suitable for covering technical reserves.

8. The Member States may authorize undertakings -- whether head offices or branches -- not to hold matching assets to cover an amount not exceeding 20 per cent of their commitments in a particular currency.

However, total assets in all currencies combined must be at least equal to total commitments in all currencies combined.

9. Each Member State may provide that, whenever under the preceding procedures a commitment has to be covered by assets expressed in the currency of a member State, this requirement shall also be considered to be satisfied when up to 50 per cent of the assets is expressed in ECU.

F(1) Underwriting account

1. Total gross premiums earned.

2. Total cost of claims.

3. Commission costs.

4. Gross underwriting result.

F(2) Underwriting account

1. Gross premiums for the last underwriting year.

2. Gross claims in the last underwriting year (including reserve at the end of underwriting year).

3. Commission costs.

4. Gross underwriting result.

GIVEN under my Official Seal, this 12th day of June, 1991.

DESMOND O'MALLEY,

Minister for Industry and Commerce.

EXPLANATORY NOTE.

These Regulations give effect to the Second non-life insurance services Directive which facilitates the right of EC insurance undertakings to underwrite certain insurance risks without necessarily having to become established, and in respect of certain categories of policyholders, without having to obtain a separate authorisation in the Member state where the risk is situated.

The Regulations amend the European Communities (non-life insurance) Regulations, 1976 by allowing insurance undertakings to underwrite, throughout the Community, large risks insurance business, as defined, on the basis of home country supervisory control. In the case of the underwriting of these types of insurance risks, a separate authorisation will not be required by the Minister for Industry and Commerce. For mass risks business, that is insurance cover for private individuals or commercial organisations who do not qualify as a large risk, the insurance undertaking must obtain an authorisation from the Minister.