Opinion of the Advocate-General
A - Introduction
1 In this action for failure to fulfil a Treaty obligation the Commission claims that an administrative practice, based on statute, of the French supervisory agency for the insurance industry, consisting in regularly obtaining certain information concerning each type of insurance contract marketed for the first time on French territory, is incompatible with two insurance directives which provide that such information, like, for example, terms and rates of insurance, do not have to be submitted or approved. The directives in question are Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance directive) (1) and Council Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance directive). (2)
The legislation applicable
2 The relevant rules of the French Insurance Code provide as follows:
According to Article L 310-8, insurance undertakings marketing a standard form insurance contract for the first time in France must inform the Minister for Economic and Financial Affairs in the manner prescribed by order. (3) Article A 310-1 states that the information defined in Article L 310-8, first paragraph, is to be provided on a form drawn up in the French language, containing the information specified in the annex to the article. (4)
3 This form, described as a `marketing information sheet' (fiche de commercialisation) or `questionnaire' (fiche signalétique) asks a number of questions eliciting information about the insurance undertaking and the type and particulars of the contract.
4 The Commission takes the view that the requirement of systematic notification of information of this kind - of which it has been made aware by complaints from the insurance industry - is a breach of Directives 92/49 and 92/96. The relevant rules of the two directives on which the Commission relies state:
Article 6(3), first, second and third subparagraphs, of Directive 92/49:
`Nothing in this Directive shall prevent Member States from maintaining in force or introducing laws, regulations or administrative provisions requiring approval of the memorandum and articles of association and communication of any other documents necessary for the normal exercise of supervision.
Member States shall not, however, adopt provisions requiring the prior approval or systematic notification of general and special policy conditions, scales of premiums and forms and other printed documents which an undertaking intends to use in its dealings with policyholders.
Member States may not retain or introduce prior notification or approval of proposed increases in premium rates except as part of general price-control systems.'
Article 29 of Directive 92/49:
`Member States shall not adopt provisions requiring the prior approval or systematic notification of general and special policy conditions, scales of premiums, or forms and other printed documents which an insurance undertaking intends to use in its dealings with policyholders. They may only require non-systematic notification of those policy conditions and other documents for the purpose of verifying compliance with national provisions concerning insurance contracts, and that requirement may not constitute a prior condition for an undertaking's carrying on its business.
...'
Article 39(2) of Directive 92/49:
`The Member State of the branch or of provision of services shall not lay down provisions requiring the prior approval or systematic notification of general and special policy conditions, scales of premiums, technical bases used in particular for calculating scales of premiums and technical provisions, forms and other printed documents which an undertaking intends to use in its dealings with policyholders. For the purpose of verifying compliance with national provisions concerning assurance contracts, it may require an undertaking that proposes to carry on assurance business within its territory, under the right of establishment or the freedom to provide services, to effect only non-systematic notification of those policy conditions and other printed documents without that requirement constituting a prior condition for an undertaking to carry on its business.'
Article 5(3), first to third subparagraphs, of Directive 92/96:
`Member States shall not adopt provisions requiring the prior approval or systematic notification of general and special policy conditions, of scales of premiums, of the technical bases used in particular for calculating scales of premiums and technical provisions or of forms and other printed documents which an assurance undertaking intends to use in its dealings with policyholders.
Notwithstanding the first subparagraph, for the sole purpose of verifying compliance with national provisions concerning actuarial principles, the home Member States may require systematic notification of the technical bases used for calculating scales of premiums and technical provisions, without that requirement constituting a prior condition for an undertaking to carry on its business.
Nothing in this Directive shall prevent Member States from maintaining in force or introducing laws, regulations or administrative provisions requiring approval of the memorandum and articles of association and the communication of any other documents necessary for the normal exercise of supervision.'
Article 29, first and second subparagraphs, of Directive 92/96:
`Member States shall not adopt provisions requiring the prior approval or systematic notification of general and special policy conditions, scales of premiums, technical bases used in particular for calculating scales of premiums and technical provisions or forms and other printed documents which an assurance undertaking intends to use in its dealings with policyholders.
Notwithstanding the first subparagraph, for the sole purpose of verifying compliance with national provisions concerning actuarial principles, the Member State of origin may require systematic communication of the technical bases used in particular for calculating scales of premiums and technical provisions, without that requirement constituting a prior condition for an undertaking to carry on its business.'
Article 39(2) of Directive 92/49:
`The Member State of the branch or of provision of services shall not lay down provisions requiring the prior approval or systematic notification of general and special policy conditions, scales of premiums, technical bases used in particular for calculating scales of premiums and technical provisions, forms and other printed documents which an undertaking intends to use in its dealings with policyholders. For the purpose of verifying compliance with national provisions concerning assurance contracts, it may require an undertaking that proposes to carry on assurance business within its territory, under the right of establishment or the freedom to provide services, to effect only non-systematic notification of those policy conditions and other printed documents without that requirement constituting a prior condition for an undertaking to carry on its business.'
Procedure
5 The Commission began the prelitigation procedure for breach of a Treaty obligation by a letter of formal notice of 17 January 1997.
In its reply, dated 25 March 1997, the French Government expressed the view that the directives permitted post hoc sample checks on contracts. The information sought was different from that which could not be systematically notified in advance, according to the directives. Nor should the notification of the `fiche signalétique' be regarded as prior approval of the policies concerned. However, the French Government agreed to scrutinize the Insurance Code for ambiguities.
The Commission reiterated its objections in a reasoned opinion of 3 December 1997. This opinion was not answered by the French Government. The Commission therefore brought an action for failure to fulfil Treaty obligations.
6 The Commission claims that the Court should:
- Declare that, by maintaining in force Articles L 310-8 and A 310-1 of the Code des Assurances (Insurance Code), according to which
(a) insurance undertakings are required, when marketing a standard form insurance policy for the first time in France, to notify it to the Minister for Economic and Financial Affairs in accordance with the conditions laid down by order issued by that Minister;
(b) the information referred to in the first paragraph of Article L 310-8 is to take the form of an information sheet drawn up in the French language containing the information mentioned in the annex to that article,
- the French Republic has failed to fulfil its obligations under the Treaty establishing the European Community, under Articles 6(3), 29 and 39 of Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance directive) and under Articles 5(3), 29 and 39 of Council Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance directive);
- order the French Republic to pay the costs.
7 The Government of the French Republic asks the Court: - to dismiss the application;
- to order the Commission to pay the costs.
B - Opinion
8 According to the Commission, the requirement of systematic notification imposed by the French authorities is contrary to the spirit and intention of Directives 92/49 and 92/96. These directives are based on the assumption that assurance undertakings are licensed and supervised in their home Member State. (5) The competent supervisory agency is then supposed to inform the supervisory agency of the Member State in which the services are to be provided of the business to be conducted on its territory, (6) so that the authorities of that State are fully aware of the activities of assurance undertakings licensed to practise in other Member States. The systematic registration of all new insurance products is not therefore necessary for the purpose of efficient, random post hoc checks. Such a practice should be regarded as an obstacle to foreign insurance undertakings and as being of the nature of concealed systematic checks.
9 The Commission takes the view that the practice in question is contrary to the tenor and purpose of Directives 92/49 and 92/96. It relies, in this connection, on the 20th and 21st recitals in the preamble to Directive 92/96, part of which reads as follows:
`(21) Whereas the Member States must be able to ensure that the assurance products and contract documents used, under the right of establishment or the freedom to provide services, to cover commitments within their territories comply with such specific legal provisions protecting the general good as are applicable; whereas the systems of supervision to be employed must meet the requirements of an internal market but their employment may not constitute a prior condition for carrying on insurance business; whereas, from this standpoint, systems for the prior approval of policy conditions do not appear to be justified ...'.
10 In the Commission's view, the relevant provisions of the directives unambiguously prohibit any prior approval or systematic notification of general and special insurance policy conditions, scales of premiums, forms and other documents which the assurance undertakings intend to use in their dealings with policyholders. Member States may only demand sporadic post hoc notification of policy conditions and other documents, and this requirement may not constitute a prior condition for the conduct of business by an undertaking.
11 The French Government replies that the information sought on the `fiche signalétique' is not part of general policy conditions, the systematic notification of which is prohibited. The concept of `general policy conditions' is not defined in the directives. In legal doctrine, these terms are not the same as the contents of the `fiche signalétique'. Moreover, a questionnaire of this kind is necessary in order to perform the ordinary checks required by the directive. In any event, general terms of insurance are monitored in France after policies are taken out, by means of random checks.
Finally, the French Government gives notice of an amendment to the Code des Assurances. Article L 310-8 is to be modified to require insurance undertakings to inform the Ministry for Economic and Financial Affairs within three months of placing a new type of insurance contract on the market.
12 In the oral procedure it was stated that this amendment had already been introduced. The Commission responded by stating that the systematic requirement for subsequent notification was likewise incompatible with the directives.
Appraisal
13 The only relevant legal question to be determined here is whether the systematic registration by the French supervisory authority of any new type of insurance contract, either before or immediately after it has been introduced, infringes Directives 92/49 and 92/96.
14 The French Government is correct in stating that the directive does not define the concept of `general policy conditions'. For the purposes of this case it can be accepted that, in ordinary legal language, `general policy conditions' are not the same thing as information to be notified to a public authority by means of a questionnaire. It is not therefore necessary to establish a more precise definition of the expression `general policy conditions'.
15 Moreover, the action brought by the Commission is for a declaration by the Court, not on the question whether the questionnaire or marketing information sheet is to be regarded as a demand to notify general policy conditions, something which is expressly prohibited, but on the question whether the obligation to notify every new type of insurance policy by means of a form is an obstacle to insurance business akin to an obligation to notify general policy conditions systematically.
16 Seen in that light, the Commission's application should be granted. Directives 92/49 and 92/96 are to be regarded as the final stage in a process of liberalisation in the insurance sector, the object and purpose of which is to create an internal market in insurance. An essential element of this internal market is the removal and lasting prevention of obstacles to the business activity of insurance undertakings across the internal frontiers of the Community. The nature of the obstacles to be prohibited is repeatedly described, in very similar terms, in the two directives. (7)
17 It is in fact contrary to the spirit and content of the directives for the Member States to create obstacles to the economic activities liberalised by the directives if their effects are equivalent to those expressly forbidden, without its being necessary to determine definitively whether the measures introduced by the Member States are caught by the terms of the prohibitions set out in the directives. From an overview of the related rules in Articles 6, 29 and 39 of Directive 92/49 and in Articles 5, 29 and 39 of Directive 92/96 it is clear that the Member States did not want systematic notification of all types of contract as a prior condition for the conduct of business by an insurance undertaking on the territory of another Member State. The governing principle for the authorisation and supervision of insurance undertakings is the home Member State principle, (8) whereby the authorising Member State does not completely forfeit control, for instance over compliance with its own law of contract.
18 However, for the purpose of such control it is sufficient for the competent authorities of the Member States concerned to be informed of the activities of the insurance undertakings and thus be enabled to obtain access to the necessary documents. This kind of information is, however, already supplied by the authorities to one another, under Directives 92/49 and 92/96. (9) The French Government's argument that effective supervision cannot be achieved without systematic registration of the relevant information by means of the `fiche signalétique' must therefore be rejected.
19 In conclusion, the systematic requirement for the return of marketing information sheets or questionnaires must be regarded as a disproportionate burden which conflicts with the provisions of Directives 92/49 and 92/96.
Costs
20 According to Article 69(2) of the Rules of Procedure, the unsuccessful party is to bear the costs of the case. In view of the conclusion stated above, the French Republic should be ordered to pay the costs.
C - Conclusion
21 In view of the considerations set out above, I propose that the Court should rule as follows:
(1) By maintaining in force Articles L 310-8 and A 310-1 of the Code des Assurances (Insurance Code), according to which
(a) insurance undertakings are required, when marketing a standard form insurance contract for the first time in France, to notify it to the Minister for Economic and Financial Affairs in accordance with the conditions laid down by order issued by that Minister;
(b) the information referred to in the first paragraph of Article L 310-8 is to take the form of an information sheet drawn up in the French language containing the information mentioned in the annex to that article,
the French Republic has failed to fulfil its obligations under the Treaty establishing the European Community, under Articles 6(3), 29 and 39 of Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance directive) and under Articles 5(3), 29 and 39 of Council Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (third life assurance directive).
(2) The French Republic is ordered to pay the costs.
(1) - OJ 1992 L 228, p. 1.
(2) - OJ 1992 L 360, p. 1.
(3) - Law No 94-5 of 4 January 1994.
(4) - Decree of 8 August 1994.
(5) - See Article 34 of Directive 92/49 and Article 34 of Directive 92/96.
(6) - See Article 35 of Directive 92/49 and Article 35 of Directive 92/96.
(7) - See the provisions cited in footnote 4.
(8) - See Articles 4, 5 and 6 of Directive 92/49 and Articles 3, 4 and 5 of Directive 92/96.
(9) - See Article 35 of the directives.
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