The basic assumption of free performance of services and operations within the EU has generated the principle of ‘home country control, single licence’. Insurers providing cross-border services or operating through a branch in another Member State only have to deal with the supervisor of the Member State where they have their head office. This supervisor maintains contacts with the supervisor of the (host) Member State to which services are being provided or where the operations take place. The rules imposed on the insurer in that Member State are the same, except for specific regulations of general good which every Member State is free to adopt. For the purposes of the Financial Supervision Act (Wet op het financieel toezicht (Wft)), ‘Member States’ are the EU countries plus Liechtenstein, Iceland and Norway (together, these form the European Economic Area (EEA)).
Provision of services
An insurer with head-office in the Netherlands which wishes to embark on cross-border activities to another Member State is required to notify DNB in writing. The insurer needs DNB’s approval before being allowed to start up its activities. The insurer informs DNB of the Member States where it intends to operate as well as the classes of non-life risks to be covered in these countries and/or the types of life insurance contracts on offer. Once the insurer meets all requirements, DNB sends the host supervisor(s), within one month, the data received, plus a solvency certificate, a list of the branches for which the insurer has a licence, and a specification of the nature of the risks to be insured. The insurer is informed at the same time, and is then permitted to start provide its services. If relevant, DNB informs the insurer which conditions the host supervisor has imposed on the execution of the activities in the Member State concerned. The insurer is subsequently required to submit various financial data to DNB annually.
An insurer with head-office in the Netherlands which wishes to open a branch office in another Member State requires the approval of DNB to do so. In its application to DNB, the insurer encloses a programme of planned activities. This programme lists the non-life risks to be covered in that Member State and/or the life-insurance contracts on offer. It must also contain a description of the organisation structure, the address of the branch office and the personal data of the legal representative. Once the insurer meets all requirements, DNB sends the host supervisor, within three months, the data received plus a solvency certificate. DNB informs the insurer accordingly and gives the date on which the branch office may be opened. Here, too, DNB informs the insurer which conditions the host supervisor has imposed on the execution of the activities in the Member State concerned. Once the branch has begun its operations, the insurer is required to submit various financial data to DNB annually.
Funeral expenses and benefits in kind insurers and cross-border activities in non-Member States
The arrangements agreed in the EEA context do not apply to funeral expenses and benefits in kind insurers nor to services provided to or the opening of a branch office in a another country. The procedures for these situations are basically the same as described above, but here insurers need to make explicit allowance for the legislation prevailing in the country concerned.