Q&A

Question

Article 149 of S2 Directive provides that “Any change which an insurance undertaking intends to make to the information referred to in Article 145 shall be subject to the procedure provided for in Articles 147 and 148”.

Article 147 includes “the nature of the risks or commitments [the undertaking] proposes to cover”

We would like to confirm under which cases the article should be applied, beyond the extension of classes of insurance (obviously subject to the procedure provided for in Articles 147 and 148) :

-          Should any significant change in the activities, for example any new significant products, even if falling under existing classes of insurance already under passport ?

-          Going further, should any significant change in the conditions surrounding the FoP exercise and in the information provided for within the first notification in application of the EIOPA BoS Decision 17/014 give rise to the procedure ? e.g

i)         new distribution network, or

ii)       any change in the structure of the business organization with potential consequences on the protection of the concerned assets and liabilities, or

iii)     if the change is such that the undertaking now intends to operate exclusively or almost exclusively, in other EEA Member State(s)),

 

Same questions arise respectively on article 145 (4) which provides that “In the event of a change in any of the particulars communicated under point (b), (c) or (d) of paragraph 2, an insurance undertaking shall give written notice of the change to the supervisory authorities of the home Member State and of the Member State where that branch is situated at least one month before making the change so that the supervisory authorities of the home Member State and the supervisory authorities of the Member State where that branch is situated may fulfil their respective obligations under Article 146.”

EIOPA answer

The answer to this question is provided by the European Commission.

According to Article 149 of the Directive 2009/138/EC (Solvency II), any change, which an insurance undertaking intends to make to the information, referred to in Article 147 Solvency II and related to the nature of the risks and commitments undertaken on a freedom to provide services (FoS) basis shall be subject to prior notification.

The notification requirement applies, regardless of whether the changes to the nature of the risks and commitments relate to classes of insurance already notified under FoS.

In principle, there is no requirement of systematic prior notification (1) of insurance products offered or to be offered in a given Member State or (2) in case insurance products will be distributed through a new distribution network, unless new types of products affect the nature of the risks or commitments of the undertaking. Prior notification is in general also not required in case of changes in the structure of the business organization. However, if the change is such that the undertaking will operate exclusively or almost exclusively in other (already notified) EEA Member State(s), it falls within the scope of the notification obligation of Article 149 Solvency II.

In the context of freedom of establishment (FoE) activity, Article 145(4) Solvency II requires among others the notification of changes to an insurance or reinsurance undertaking’s type of business pursued or intended to be pursued by its branch.

The disclaimer provided by the European Commission:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies, in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.