Funeral expenses and benefits in kind insurers can always apply for Basic authorisation, but life and non-life insurers can only do so if they meet specific requirements. This is because life and non-life insurers come under the scope of the Solvency II regime and therefore require Solvency II authorisation, except if they meet all of the following four requirements.
- Gross annual premium income does not exceed EUR 5 million.
- The company's technical provisions do not exceed EUR 25 million.
- If the company forms part of a group, the group's total technical provisions do not exceed EUR 25 million.
- Reinsurance activities do not involve more than EUR 500,000 in gross premium income or EUR 2.5 million in technical provisions, or they do not involve more than 10% of total gross premium income or technical provisions.
Non-life insurers meeting all of these four requirements, may apply for Basic authorisation, but only if they do not provide insurance services in any of the following segments.
- Motor vehicle liability
- Road transport liability
- Aircraft liability
- Liability for ships
- General liability
- Credit risks
Non-life insurance companies providing insurance services in any of these segments must apply for Solvency II authorisation, irrespective of their size.
Life insurers meeting all of the above requirements can apply for Basic authorisation.
Please note that if life or non-life insurers holding Basic authorisation cease to meet any of the four requirements in a given year, they do not need to apply for Solvency II authorisation immediately. Only if they exceed the limits of one of the four requirements in three consecutive years, the Solvency II regime will apply in the fourth year.
No EU passport
If we issue Basic authorisation to your company, it will not include an EU passport, meaning it will not be permitted to provide insurance services in other EU Member States. If you want to provide insurance services in another EU Member State, you must first contact the competent supervisory authority in that Member State, which will tell you whether you can provide the envisaged services there and which requirements apply. Insurers must inform DNB of their activities in other Member States as they may impact sound and ethical business operations.
Voluntary application for Solvency II authorisation
Life or non-life insurers meeting the requirements for Basic authorisation may opt to apply for Solvency II authorisation on a voluntary basis. If you expect your company to grow and need Solvency II authorisation at some point or if you intend to provide insurance services abroad under an EU passport,, this is a sensible option.