S.I. No. 244/1992 - European Communities (Non-Life Insurance) (Amendment) Regulations, 1992.

S.I. No. 244 of 1992.

EUROPEAN COMMUNITIES (NON-LIFE INSURANCE) (AMENDMENT) REGULATIONS, 1992.

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 purpose of giving effect to Council Directive No. 90/618/EEC of 8 November, 1990, hereby make the following Regulations:

1. (1) These Regulations may be cited as the European Communities (Non-Life Insurance) (Amendment) Regulations, 1922 and shall come into operation on the 20th day of November, 1992.

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

2. (1) In these Regulations:

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

"the Regulations of 1991" means the European Communities (Non-Life Insurance) (Amendment) (No. 2) Regulations, 1991 (S.I. 142 of 1991);

"the Directive" means EEC Council Directive 90/618/EEC¹;

"the second Directive" means EEC Council Directive 88/357/EEC²;

"the Minister" means the Minister for Industry and Commerce;

"a third country" means a country which is not a Member State;

"the Declined Cases Agreement" means the Agreement made on the 18th day of June, 1981 between the Minister of the one part and each of those insurance companies and members of the Underwriting Syndicates at Lloyds who carry on motor vehicle insurance business in the State.

¹ O.J. No. L 330, 29.11.1990, p. 44.

² O.J. No. L 172, 4.7.1988, p. 1.

(2) Words and expressions used in these Regulations which are also used in the Directive have the same meaning as in the Directive.

3. Article 4 (1) of the Regulations of 1991 is hereby amended by the addition of the following definitions—

"vehicle" means a vehicle as defined in Article 1 (1) of Council Directive 72/166/EEC;³

"the Motor Insurers' Bureau of Ireland" means the national compensation body as defined in Article 1 (3) of Council Directive 72/166/EEC;

"the guarantee fund" means the national guarantee fund required by Articles 1 (4) and 2 (2) of Council Directive 84/5/EEC;⁴

"parent undertaking" means a parent undertaking as defined in articles 1 and 2 of Council Directive 83/349/EEC;⁵

"subsidiary" means a subsidiary undertaking as defined in Articles 1 and 2 of Council Directive 83/349/EEC; any subsidiary undertaking of a subsidiary undertaking shall also be regarded as a subsidiary of the parent undertaking which is at the head of those undertakings.

4. The Principal Regulations are hereby amended by the substitution for Article 3A inserted by the Regulations of 1991 of the following:

"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;

³ O.J. No. L 103, 2.5.1972, p. 1.

⁴ O.J. No. L 129, 19.5.1990, p. 33.

⁵ O.J. No. L 193, 18.7.1983, p. 1.

( c ) risks classified under Classes 3, 8, 9, 10, 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 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 specified in paragraph (c) of subarticle (1) of this Article.".

5. Articles 5 to 8 of these Regulations apply to subsidiaries of parent undertakings governed by the laws of a third country and to acquisitions of holdings by such parent undertakings.

6. (1) The Minister shall notify the Commission:

( a ) of any authorization of a direct or indirect subsidiary, one or more parent undertakings of which are governed by the laws of a third country,

( b ) whenever such a parent undertaking acquires a holding in a Community insurance undertaking which would turn the latter into its subsidiary.

(2) When authorization is granted to the direct or indirect subsidiary of one or more parent undertakings governed by the law of third countries, the structure of the group shall be specified in the notification which the Minister shall address to the Commission.

7. The Minister shall inform the Commission of any general difficulties encountered by insurance undertakings who hold an authorization granted by the Minister in establishing themselves or carrying on their activities in a third country.

8. (1) The Minister shall comply with the decision which has been made in accordance with subarticle 4 of Article 29b of Council Directive 73/239/EEC as inserted by Article 4 of the Directive, to limit or suspend decisions:

( a ) regarding requests pending at the moment of the decision or future requests for authorizations, and

( b ) regarding the acquisition of holdings by direct or indirect parent undertakings governed by the laws of the third country in question.

(2) The duration of the measures referred to in subarticle (1) of this Article shall not, subject to subarticle (3) of this Article, exceed three months.

(3) The measures referred to in subarticle (1) of this Article shall be continued where the Council acting on a proposal from the Commission, has decided before the end of the three month period referred to in subarticle (2) of this Article that such measures shall be continued.

(4) The limitations or suspension referred to in subarticle (1) of this Article shall not apply to the setting up of subsidiaries by insurance undertakings or their subsidiaries duly authorized in the Community or to the acquisition of holdings in Community insurance undertakings by such undertakings or subsidiaries.

(5) whenever it appears to the Commission that one of the situations has arisen as described in paragraphs 3 and 4 of Article 29b of Directive 73/239/EEC as inserted by Article 4 of the Directive, the Minister shall inform the Commission, at its request—

( a ) of any request for the authorization of a direct or indirect subsidiary, one or more parent undertakings of which are governed by the laws of the third country in question;

( b ) of any plans for such an undertaking to acquire a holding in a Community insurance undertaking such that the latter would become the subsidiary of the former.

(6) The obligation to provide the information referred to in subarticle (5) of this Article shall lapse once an agreement is concluded with the third country referred to in paragraph 3 or 4 of Article 29b of Council Directive 73/239/EEC as inserted by Article 4 of the Directive or when the measures referred to in the second or third subparagraph of paragraph 4 the said Article 29b cease to apply.

(7) Measures taken under this Article shall comply with the Community's obligations under any international agreements, bilateral or multilateral, governing the taking-up and pursuit of the business of insurance undertakings.

9. The Regulations of 1991 are hereby amended by the deletion of the following from subarticle (3) of Article 13:

"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;".

10. The Regulations of 1991 are hereby amended by the addition of the following Article:

"16(A). (1) This Article shall, in addition, apply to an undertaking which carries on or intends to carry on insurance business by way of services into the State in respect of the coverage of a risk, other than carrier's liability, classified under Class 10 of the Annex.

(2) The undertaking shall be required to become a member of and participate in the financing of the Motor Insurers' Bureau of Ireland and the guarantee fund.

(3) The undertaking shall not be required to make any payment or contribution to the Motor Insurers' Bureau of Ireland or the guarantee fund other than by reference to its gross premium income in respect of the coverage of risks underwritten in the State by way of services, other than carrier's liability, classified under Class 10 of the Annex calculated on the same basis as for undertakings covering risks, other than carrier's liability, in Class 10 through an establishment situated in the State, or in respect of the number of risks underwritten in the State by way of services in that Class.

(4) The undertaking shall be required to be a party to the Declined Cases Agreement or to comply with rules concerning the cover of aggravated risks, insofar as they apply to undertakings established in the State.

(5) The undertaking shall be required to ensure that persons pursuing claims arising out of events occurring in the State are not placed in a less favourable situation as a result of the fact that the undertaking is covering a risk, other than carrier's liability, in Class 10 by way of the provision of services rather than through an establishment situated in the State.

(6) For this purpose, the undertaking shall appoint a representative resident or established in the State who shall collect all necessary information in relation to claims and shall possess sufficient powers to represent the undertaking in relation to persons suffering damage who could pursue claims, including the payment of such claims, and to represent it, or where necessary, to have it represented before the Courts and authorities of the State in relation to these claims.

(7) The representative shall also be required to represent the undertaking in relation to confirming the existence and validity, or otherwise, of motor vehicle liability insurance policies before the competent authorities of the State.

(8) The representative shall not be required to undertake activities on behalf of the undertaking which appointed the representative other than those set out in Articles 16A (6) and 16A (7) of this Article.

(9) The representative shall not carry on the business of direct insurance in the State on behalf of the said undertaking.

(10) The appointment of the representative shall not, in itself, constitute the establishment of a branch or agency for the purpose of Article 6 (2) (b) of Council Directive No. 73/239/EEC.⁶

(11) The representative shall not constitute an establishment as defined in Article 2 (c) of the second Directive.".

11. The Regulations of 1991 are hereby amended by the insertion, after Article 15, of the following Article:

"15A (1) An undertaking which carries on or intends to carry on insurance business by way of services into the State in respect of the coverage of a risk, other than carrier's liability, classified under Class 10 of the Annex shall:

(i) notify the Minister of the name and address of the representative referred to in Article 16A of these Regulations,

(ii) submit a declaration to the Minister attesting that the undertaking has become a member of the Motor Insurers' Bureau of Ireland and the guarantee fund.

(2) References in these Regulations to Articles 15 (2) and 16 (1) shall be construed as including references to subarticle (1) of this Article.".

12. The Regulations of 1991 are hereby amended by the addition of the following to Article 19:

"(4) The name and address of the representative referred to in Article 16A of these Regulations shall appear in the documents referred to in subarticle (3) of this Article.".

13. The Regulations of 1991 are hereby amended by the substitution for Article 20 (1) (b) of the following:

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

⁶ O.J. No. L228, 16.8.1973, p. 3.

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

(ii) motor insurance (3, 7 and 10, the figures relating to Class 10, excluding carrier's liability, being specified);

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

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

(v) general liability (13);

(vi) credit and suretyship (14 and 15);

(vii) other classes (16, 17 and 18).".

14. The Regulations of 1991 are hereby amended by the substitution for Article 12 of the following:

"Compulsory Insurance

12. (1) Every compulsory contract of insurance shall be in accordance with the specific provisions relating to that insurance laid down in accordance with the laws of the State.

(2) In the case of a conflict between the law of the Member State in which the risk is situated and the law of the Member State which imposes the obligation to take out insurance the law of the latter shall prevail.

(3) Notwithstanding Article 11 of these Regulations the law applicable to compulsory contracts of insurance shall be the law of the Member State which imposes the obligation to take out insurance.

(4) Subject to subarticle (3) of this Article, Article 11 (2) (c) of these Regulations shall apply where the insurance contract provides cover in several Member States of which at least one imposes an obligation to take out insurance.

(5) Where an undertaking is carrying on compulsory insurance it must notify the competent authorities of any cessation of cover and such cessation may be invoked against injured third parties in the circumstances laid down by the law of the State.

(6) The competent authorities shall accept as proof that the insurance obligation has been fulfilled a certificate the content of which is in conformity with the specific provisions relating to that insurance in accordance with the law of the State.".

GIVEN under my Official Seal, this 25th day of August, 1992.

DESMOND O'MALLEY,

Minister for Industry and Commerce.

EXPLANATORY NOTE.

These Regulations give effect to the Motor insurance services Directive (90/618/EEC—O. J. No. L 330/44) which facilitates the right of EC insurance undertakings to underwrite motor vehicle liability insurance without necessarily being established in the State and, in respect of "large" risk policyholders as defined without having to obtain a separate authorization from the Minister. For "mass" risk business, that is motor insurance cover for private individuals or commercial organizations which do not qualify as a "large" risk, the insurance undertaking must obtain an authorization from the Minister.

The Regulations provide that non-established insurance undertakings must appoint a claims representative resident or established in the State to collect all necessary information in relation to claims and to have the power to represent the undertaking in relation to those claims and to pay out any compensation due.

The Regulations further require such undertakings to become members of the Motor Insurers' Bureau of Ireland and to be a party to the Declined Cases Agreement.

The Regulations also provide for reciprocity measures regarding non-life insurance activities in Third countries.