The EU Digital Operational Resilience Act (DORA) does not apply to ancillary insurance intermediaries which are microenterprises or small or medium-sized enterprises. ‘Medium-sized enterprise’ is defined as a “financial entity that is not a small enterprise and employs fewer than 250 persons and has an annual turnover that does not exceed EUR 50 million and/or an annual balance sheet that does not exceed EUR 43 million”. There is no guidance in DORA or in the EC Recommendation 2003/361/EC on how to determine the annual turnover. In the User Guide to the SME Definition published by the European Commission in 2020, it is stated that annual turnover is determined by calculating the income that an enterprise received during the year in question from the sale of products and provision of services falling within the company’s ordinary activities, after deducting any rebates. The European Commission’s statement in this guideline is partially based on Article 28 of Council Directive 78/660/EEC of 25 July 1978. Unlike insurance intermediaries and reinsurance intermediaries, ancillary insurance intermediaries do not have insurance distribution as their main activity. A common example of ancillary insurance intermediaries is car dealers that distribute motor insurance for cars that they sell. A significant number of car dealers have an annual turnover at the legal entity level where the income from insurance distribution constitutes just a small fraction of the car dealer’s total income from sales of products and services. If annual turnover in relation to ancillary insurance intermediaries is determined based on all their sales of products and services, such interpretation would result in the creation of additional barriers for car dealers and other companies to become ancillary insurance intermediaries because of the investments needed, which may lead to such companies deciding not to distribute any insurance products, leading to worse consumer experience, and reducing the competitiveness of the European Union. Another negative consequence of such interpretation is that it creates incentives for ancillary insurance intermediaries to establish a separate insurance intermediary in order not to exceed the EUR 50 million threshold for annual turnover. Due to the special nature of ancillary insurance intermediaries, which have financial services only as an ancillary activity, and in light of proportionality, an ancillary insurance intermediary should be allowed to determine its annual turnover based on the income that the ancillary insurance intermediary received from the distribution of insurance products during the year in question, thus excluding income from other products such as cars.

This question has been rejected because the matter falls within the scope of Q&A 237.