DIRECTIVE 2005/68/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 November 2005 on reinsurance and amending Council Directives 73/239/EEC, 92/49/EEC as well as Directives 98/78/EC and 2002/83/EC

Some of the most important Articles:

(10) The taking up and the pursuit of the business of reinsurance are subject to the grant of a single official authorisation issued by the competent authorities of the Member State in which a reinsurance undertaking has its head office. Such authorisation enables an undertaking to carry on business throughout the Community, under the right of establishment or the freedom to provide services.

The Member State of the branch or of the provision of services may not require a reinsurance undertaking which wishes to carry on reinsurance business in its territory and which has already been authorised in its home Member State to seek fresh authorisation.

Furthermore a reinsurance undertaking which has already been authorised in its home Member State should not be subject to additional supervision or checks related to its financial soundness performed by the competent authorities of an insurance undertaking which is reinsured by that reinsurance undertaking.

Article 3 - Principle of authorisation

The taking up of the business of reinsurance shall be subject to prior official authorisation. Such authorisation shall be sought from the competent authorities of the home Member State by:

(a) any undertaking which establishes its head office in the territory of that State;

(b) any reinsurance undertaking which, having received the authorisation, extends its business to reinsurance activities other than those already authorised.

Article 4 - Scope of authorisation

1. An authorisation pursuant to Article 3 shall be valid for the entire Community. It shall permit a reinsurance undertaking to carry on business there, under either the right of establishment or the freedom to provide services.

2. Authorisation shall be granted for non-life reinsurance activities, life reassurance activities or all kinds of reinsurance activities, according to the request made by the applicant.

PROVISIONS RELATING TO FINITE REINSURANCE AND SPECIAL PURPOSE VEHICLES

Article 45 - Finite reinsurance

1. The home Member State may lay down specific provisions concerning the pursuit of finite reinsurance activities regarding:

— mandatory conditions for inclusion in all contracts issued;

— sound administrative and accounting procedures, adequate internal control mechanisms and risk management requirements;

— accounting, prudential and statistical information requirements;

— the establishment of technical provisions to ensure that they are adequate, reliable and objective;

— investment of assets covering technical provisions in order to ensure that they take account of the type of business carried on by the reinsurance undertaking, in particular the nature, amount and duration of the expected claims payments, in such a way as to secure the sufficiency, liquidity, security, profitability and matching of its assets;

— rules relating to the available solvency margin, required solvency margin and the minimum guarantee fund that the reinsurance undertaking shall maintain in respect of finite reinsurance activities.

Article 46 - Special purpose vehicles

1. Where a Member State decides to allow the establishment within its territory of special purpose vehicles within the meaning of this Directive, it shall require prior official authorisation thereof.

2. The Member State where the special purpose vehicle is established shall lay down the conditions under which the activities of such an undertaking shall be carried on. In particular, that Member State shall lay down rules regarding:

— scope of authorisation;

— mandatory conditions for inclusion in all contracts issued;

— the good repute and appropriate professional qualifications of persons running the special purpose vehicle;

— fit and proper requirements for shareholders or members having a qualifying holding in the special purpose vehicle;

— sound administrative and accounting procedures, adequate internal control mechanisms and risk management requirements;

— accounting, prudential and statistical information requirements;

— the solvency requirements of special purpose vehicles.

----------------------------------------------------------------------------------------------------------------------------

Reinsurance Directive Training and Presentations

For more information please visit:

Return to Index

Privacy/Legal