Insurance: France and Spain violating EC Third Insurance Directives?

United Kingdom

France and Spain violating EC rules?

France continues to insist that non-French insurers file an information sheet before they place new policies on the market, in violation of the Third Insurance Directives. The Third Life and Non-Life Directives came into force on 1 July 1994 and prohibit Member States from having in place provisions which require the prior approval or systematic notification of policy conditions.

The Commission considers that France has failed to abolish this requirement and has sent a reasoned opinion to this effect.

Spain has also received a reasoned opinion from the Commission because its legislation does not conform to the 1977 Intermediaries Directive.

Contrary to the Directive, Spain has a full vetting procedure for applicants from other Member States who wish to act as intermediaries there. The Directive provides that the system should involve no more than checking the authenticity of documents furnished as proof of the applicants' financial standing and good repute.

Spanish authorities also impose a prior authorisation requirement not only for those wishing to set up in business as an agent or broker in Spain, but also for those wishing to provide services temporarily. Case-law suggests that this is contrary to Article 59 of the EC Treaty because service providers may not be made subject to the same conditions as those who are establishing themselves permanently. The Commission argues that this requirement is not justified by any general interest considerations, such as the need to protect consumers in the Spanish market, since it is neither necessary nor proportional to that objective.