S.I. No. 360/1994 - European Communities (Life Assurance) Framework Regulations, 1994

40. (1) Notwithstanding the provisions of the Companies Acts, 1963 to 1990, any person who proposes to acquire, either directly or indirectly, a qualifying holding in an insurance undertaking, shall first notify the Minister indicating the size of the proposed qualifying holding. Such person shall, in addition, be under an obligation to notify the Minister where it is proposed to increase such qualifying holding so that the percentage level of the voting rights or capital which that person holds reaches or exceeds any of the percentage levels referred to in sub-article (5) of this Article so that the insurance undertaking would become that person's subsidiary.

• (2) The Minister shall have a period of three months from the date of notification referred to in sub-article (1) of this Article within which to oppose the proposed acquisition where, in view of the necessity to ensure sound and prudent management of the insurance undertaking in question, the Minister is not satisfied as to the suitability of the person referred to in sub-article (1) of this Article.

• (3) Any person who proposes to dispose either directly or indirectly of a qualifying holding in an insurance undertaking, shall first notify the Minister indicating the size of the proposed qualifying holding. Such person shall, in addition, be under an obligation to notify the Minister if it is proposed to decrease such qualifying holding so that any of the percentage levels of the voting rights or capital which that person holds falls below the percentage levels referred to in sub-article (4) of this Article or so that the insurance undertaking would cease to be that person's subsidiary.

• (4) The percentage levels referred to in sub-articles (1) and (3) are 20 per cent., 33 per cent. or 50 per cent.

• (5) An insurance undertaking which becomes aware of any acquisitions or disposals of holdings in its capital so that such holdings exceed or fall below any of the percentage levels referred to in sub-article (4) of this Article shall inform the Minister of such acquisitions or disposals.

In addition, the insurance undertaking shall, at such times as may be specified by the Minister and at least once a year, notify the Minister of the names of shareholders or members possessing qualifying holdings and the size of such holdings by reference, for example, to information received at annual general meetings of shareholders or members or as a result of compliance with the Companies Acts, 1963 to 1990. The Minister may, at any time, require information concerning all shareholders irrespective of the size of their shareholding.

• (6) If the Minister has reason to believe that the control exercised by the person or persons referred to in sub-article (1) of this Article is likely to operate against the prudent and sound management of an insurance undertaking, the Minister may apply to the Court for such order, for the purpose of putting an end to that situation, by way of injunction, suspension of the exercise of the voting rights attaching to the shares held by the shareholders or members in question or otherwise as the Court shall think fit.

• (7) The Court, acting under sub-article (6) of this Article, may make such order in relation to the matter as may appear to be necessary.

• (8) Sub-article (6) of this Article shall also apply to persons who fail to comply with the notification requirements referred to in sub-article (1) of this Article. If a holding is acquired contrary to the provisions of this Article the Court may, on the application of the Minister, in addition to any other order which it may make, order the suspension of the corresponding voting rights or the nullity of votes cast.

• (9) In this Article—

"control" means the relationship between a parent undertaking and a subsidiary, as defined in Article 1 of Council Directive 83/349/EEC, or a similar relationship between any natural or legal person and an undertaking;

"qualifying holding" has the meaning assigned to it by Article 9 (4) of these Regulations.

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

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

41 Obligation of professional secrecy/exchanges of confidential information.

41.

41. (1) Every person to whom this Article is applicable, including auditors and other experts, working or who has worked for or acting or who has acted on behalf of the Minister shall be bound by the obligation of professional secrecy.

• (2) The obligation of professional secrecy means that, subject to the succeeding sub-articles of this Article, no confidential information received in the performance of duties may be divulged to any person or authority whatsoever, except in such form as will ensure that individual insurance undertakings cannot be identified, except by order of a Court in criminal proceedings. Nevertheless, where an insurance undertaking has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties involved in attempts to rescue the undertaking may be divulged where ordered by a competent court in civil or commercial proceedings.

• (3) Sub-articles (1) and (2) of this Article shall not prevent the competent authorities of Member States from exchanging information in accordance with the Directives applicable to insurance undertakings. Such information when so exchanged shall be subject to the conditions of professional secrecy laid down in these sub-articles.

• (4) The Minister may conclude co-operation agreements, providing for exchanges of information, with the competent authorities of third countries only if the information disclosed is subject to guarantees of professional secrecy at least equivalent to those provided for in this Article.

• (5) Where the Minister receives confidential information in accordance with sub-articles (1), (2) and (3) of this Article it may be used only—

( a ) to check that the conditions governing the taking up of the business of insurance are met and to facilitate monitoring of the conduct of such business, especially with regard to the monitoring of technical reserves, solvency margins, administrative and accounting procedures and internal control mechanisms,

( b ) to impose sanctions, or

( c ) in court proceedings initiated under Article 62 or under special provisions provided for in Council Directives adopted in the field of insurance undertakings.

• (6) Sub-articles (1), (2) and (5) of this Article shall not preclude the exchange of information within the State, where there are two or more competent authorities in the State, or between Member States or between competent authorities and—

( a ) authorities responsible for the official supervision of credit institutions and other financial organisations and the authorities responsible for the supervision of financial markets,

( b ) bodies involved in the liquidation and bankruptcy of insurance undertakings and in other similar procedures, and

( c ) persons responsible for carrying out statutory audits of the accounts of insurance undertakings and other financial institutions,

in the discharge of their supervisory functions, or the disclosure to bodies which administer compulsory winding-up proceedings or guarantee funds of information necessary to the performance of their dutes. The information received by those authorities, bodies and persons shall be subject to the conditions of professional secrecy laid down in sub-articles (1) and (2).

• (7) In addition, notwithstanding sub-articles (1), (2) and (5) of this Article, the Minister may in accordance with the law of the State authorise the disclosure of certain information to other authorities responsible for the supervision of credit institutions, financial institutions, investment services and insurance companies and to inspectors acting on behalf of those authorities.

• (8) The disclosures may be made only where necessary for reasons of prudential control.

• (9) The information received under sub-articles (3) and (6) of this Article and that obtained by means of on-the-spot verification in accordance with Article 11 may never be disclosed in the cases referred to in this sub-article except with the express consent of the competent authorities which disclosed the information or of the competent authorities of the Member State in which on-the-spot verification was carried out.

PART 5 Choice of Law, General Good Requirements, Notification of Documents, Policyholder Disclosure, Cancellation Rights

42 Law applicable to insurance contracts.

42.

42. (1) The law applicable to a contract of insurance which covers commitments situated within the State or within other Member States shall be determined in accordance with the following provisions:

( a ) The law applicable to insurance contracts shall be the law of the Member State of the commitment. However, where the law of that Member State so allows, the parties may choose the law of another country.

( b ) Where a policyholder is a natural person whose habitual residence is in a Member State other than that of which the policyholder is a national the parties may choose the law of the Member State of which the policyholder is a national.

( c ) Where a Member State includes several territorial units, each of which has its own rules of law concerning contractual obligations, each unit shall be considered as a country for the purposes of identifying the applicable law.

( d ) A Member State in which various territorial units have their own rules of law concerning contractual obligations shall not be bound to apply the provisions of these Regulations to conflicts which arise between the laws of those units.

• (2) ( a ) Nothing in this Article shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract.

( b ) Where the commitment arises in the State, the mandatory rules of the law of the State shall be applied, whatever the law applicable to the contract.

( c ) Subject to the preceding subparagraphs of this Article, the law of the State relating to the general rules of private international law concerning contractual obligations shall be applied to the insurance contracts covered by these Regulations.

43 General good requirements.

43.

43. In conformity with the general good in accordance with the laws of the European Communities, an insurance undertaking shall, in particular, comply with the following criteria—

( a ) the provisions of the Consumer Information Act, 1978 , applicable to insurance contracts and the marketing and selling of insurance products;

( b ) the provisions of the Sale of Goods and Supply of Services Act, 1980 , applicable to insurance contracts and the marketing and selling of insurance products;

( c ) provisions related to the supervision and regulation of insurance intermediaries under the Insurance Acts and Regulations;

( d ) provisions contained in consumer credit legislation adopted by the State;

( e ) any other requirements which the Minister may prescribe by Regulations for the general good, and the Minister in so prescribing may have regard to provisions in Codes of Conduct and Practice related to the marketing and selling of insurance and to the content of insurance proposals.

44 Notification of documents/scales of premiums.

44.

44. The Minister shall not make 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 reserves, forms and other printed documents which an insurance undertaking intends to use in its dealing with policyholders. The Minister may, however, require notification of the general and special policy conditions and other documents considered necessary for the purposes of verifying compliance with laws, Regulations and administrative provisions concerning insurance contracts. A notification requirement shall not constitute a prior condition for an insurance undertaking to carry on business in the State.

45 Policyholder disclosure rules/cancellation rights.

45.

45. (1) An insurance undertaking shall not issue any insurance policy or a copy of an insurance policy in respect of which a proposal has been submitted by a person seeking insurance unless the information set out under Points 1 to 16 in Annex III to these Regulations has already been furnished directly to that person, in writing, in a clear and accurate manner, or the aforesaid information is provided, in the manner prescribed, in conjunction with the cancellation notice referred to in sub-article (3) of this Article and the insurance policy or copy of such insurance policy. In addition, the information set out under Points 17 to 22 in Annex III shall be provided by the insurance undertaking directly to the policyholder during the term of the insurance contract.

• (2) The information referred to in sub-article (1) of this Article including the insurance contract documents or copies thereof shall, subject to section 108 of the Insurance Act, 1936 , which provides for the issue of documents in the Irish language, be provided in the English language. Where the law applicable to the contract is the law of another Member State, the policyholder may request that the information including such insurance contract documents or copies thereof be provided in the official language or languages of that Member State.

• (3) An insurance undertaking shall allow any person seeking insurance who has submitted a proposal in relation to an individual life assurance policy in respect of a commitment referred to in Article 4 of these Regulations and who has received from that undertaking a policy of insurance or a copy of the policy of insurance related to that proposal, a period of fifteen days from the time when it has delivered to that person, or posted to that person directly at the address provided on the proposal form the policy of insurance or a copy thereof within which to serve a notice of cancellation on the insurance undertaking.

• (4) The provisions of sub-article (3) of this Article shall not apply in the case of the following—

( a ) contracts of insurance effected for a term of six months' duration or less;

( b ) contracts of insurance where none of the proposers or policyholders is an individual;

( c ) contracts of creditor insurance effected for the purpose of insuring the repayment of a loan and where it is intended that such a contract will be assigned or deposited with the lender;

( d ) contracts of reinsurance.

• (5) Notwithstanding the provisions of sub-article (3) of this Article, in relation to industrial branch insurance business, the insurance undertaking may deliver, by means of its industrial branch agent, a form of notice of cancellation, the insurance policy and any accompanying documents directly to the person seeking an industrial branch policy of insurance. For this purpose, the form of notice of cancellation shall specify that such person has a period of fifteen days from the date of delivery by the industrial branch agent within which to serve the notice on the insurance undertaking.

• (6) The conditions and legal effects of cancellation of insurance contracts to which the provisions of this Article apply including any conditions and legal effects regarding the arrangements for informing a person that the insurance contract has been concluded shall be determined in accordance with the applicable contract law provisions contained in Article 42 of these Regulations.

• (7) The notice of cancellation referred to in sub-article 3 of this Article shall expressly indicate that the person has withdrawn from the proposed insurance contract.

• (8) The giving of notice of cancellation by a person shall have the effect of releasing that person from any future obligation arising from the insurance contract.

• (9) For the purposes of sub-article (3) of this Article a notice of cancellation shall be deemed to be served on the insurance undertaking at the time when such notice is posted to an address as specified by the insurance undertaking.

• (10) Any sums paid by the person serving the notice of cancellation in connection with the insurance contract shall be refunded in full by the insurance undertaking.

• (11) In the case of the serving of notice of cancellation in respect of a single premium life assurance contract, the insurance undertaking may, when the person has withdrawn from the proposed contract, refund the amount of premium paid less any losses incurred by the insurance undertaking as a result of fluctuations in the financial markets during the period of the legal validity of the insurance contract.

PART 6 Right of Establishment, Freedom to Provide Services, General Conditions, Prevention of Irregularities

46 Provisions related to right of establishment of a branch outside the State.

46.

46. (1) An insurance undertaking with a head office in the State proposing to establish a branch in another Member State shall notify the Minister of its proposal.

• (2) The notification referred to in sub-article (1) of this Article shall provide the following information—

( a ) the Member State within the territory of which the insurance undertaking proposes to establish the branch;

( b ) a scheme of operations setting out, inter alia, the types of business envisaged and the structural organisation of the branch;

( c ) the address in the Member State of the branch from which documents may be obtained and to which they may be delivered, being the address to which all communications to the authorised agent of the branch are sent;

( d ) the name of the authorised agent of the branch being a person possessing sufficient powers to bind the insurance undertaking in relation to third parties and to represent it in relations with the authorities and Courts of the Member State of the branch.

• (3) The Minister shall, within three months of receipt of all the information referred to in sub-article (2) of this Article, furnish such information to the supervisory authority of the Member State of the branch and the Minister shall notify the insurance undertaking concerned accordingly.

• (4) The Minister shall also furnish a certificate attesting (if such be the case) that the insurance undertaking possesses the minimum solvency margin calculated in accordance with Annex II to these Regulations.

• (5) Where the Minister has reason—

( a ) to believe that the administrative structure of the insurance undertaking is inadequate, or the financial situation of the insurance undertaking is inadequate, or

( b ) to doubt the good repute and professional qualifications or experience of the directors of manager or the authorised agent, taking into account the forecast business plan,

the Minister shall not be required to furnish the information referred to in sub-articles (2) and (3) of this Article to the supervisory authority of the Member State of the branch.

• (6) Where the Minister decides to refuse to furnish the information referred to in sub-articles (2) and (3) of this Article to the supervisory authority of the Member State of the branch the Minister shall notify the insurance undertaking of the grounds for such refusal within three months of receipt of all the information in question.

• (7) An insurance undertaking may appeal against a refusal or failure to furnish the information in question to the Court.

47 Amendment to branch information.

47.

47. Where an insurance undertaking established in the State intends to change the information given in respect of Article 46 (2) (b), (c) or (d) of these Regulations, it shall furnish notification of any such change to the Minister and to the supervisory authorities of the Member State of the branch at least one month before making the change in order, having regard to the proposed changes, for the Minister to exercise the Minister's functions in accordance with sub-articles (3), (5), (6) and (7) of Article 46 of these Regulations and for the supervisory authorities of the Member State of the branch to inform the Minister of the conditions under which in the interest of the general good as applied in that Member State, having regard to the proposed changes, the insurance business may be carried on in that State.

48 Conditions for establishing a branch in the State.

48.

48. Where an insurance undertaking not established in the State intends to carry on insurance business by way of a branch in the State, and where the supervisory authorities of that insurance undertaking have furnished to the Minister the appropriate information referred to in sub-article (2) of Article 46 of these Regulations, including a certificate, attesting that the insurance undertaking possesses the minimum solvency margin calculated in accordance with Annex II to these Regulations, the Minister shall, within two months of receiving the information referred to in this Article, and before the branch commences business, notify the supervisory authority of the home Member State of the conditions under which, in the interest of the general good, the insurance business may be carried on in the State.

49 Amendment to branch information.

49.

49. Where an insurance undertaking with a branch established in the State intends to change the information given in respect of Article 46 (2) (b), (c) or (d) of these Regulations, it shall furnish a notification of any such change to the Minister at least one month before the change in order that, having regard to the proposed changes, the requirements of Article 48 of these Regulations may be fulfilled.

50 Conditions for carrying on insurance business by way of service into another Member State.

50.

50. (1) An insurance undertaking established in the State which intends to carry on business by way of services for the first time in one or more other Member States shall send a notification to the Minister indicating the nature of the commitments which the insurance undertaking proposes to cover.

• (2) The Minister shall, within one month of the notification provided for in sub-article (1) of this Article, furnish the following information to the supervisory authorities of the Member State or Member States within the territories of which the insurance undertaking intends to carry on insurance business by way of services:

( a ) a certificate attesting (if such be the case) that the insurance undertaking possesses the minimum solvency margin in accordance with Annex II to these Regulations;

( b ) the classes of insurance which the insurance undertaking has been authorised to offer and

( c ) the nature of the commitments which the insurance undertaking proposes to cover in each Member State where the insurance undertaking intends to carry on insurance business by way of services.

• (3) The Minister shall, at the same time, notify the insurance undertaking concerned accordingly.

• (4) The insurance undertaking may commence carrying on insurance business by way of services from the date certified by the Minister of the notification of the information referred to in sub-article (2) of this Article.

• (5) Where the Minister refuses to furnish the information referred to in sub-article (2) of this Article within the period laid down, the Minister shall notify the insurance undertaking of the grounds for the refusal within the same period.

51 Conditions for carrying on insurance business by way of service into the State.

51.

51. (1) An insurance undertaking may carry on insurance business by way of services into the State on or after the date on which the supervisory authority of its home Member State certifies that it has communicated to the Minister the appropriate information referred to in paragraphs (a), (b) and (c) of sub-article (2) of Article 50 of these Regulations.

• (2) Where an insurance undertaking intends to carry on insurance business by way of services into the State, the Minister shall, in order to give effect to the provisions contained in Article 43 of these Regulations, notify the supervisory authority of the home Member State of the conditions under which, in the interest of the general good, the insurance business may be carried on in the State.

52 Amendment to services information.

52.

52. Where the insurance undertaking intends to amend the information provided in accordance with sub-article (1) of Article 50 of these Regulations, it shall be subject to the procedures laid down in accordance with sub-articles (1), (2), (3), (4) and (5) of Article 50 of these Regulations. The insurance undertaking shall also be subject to the procedures laid down in accordance with Article 51 of these Regulations.

53 General conditions related to services and branch insurance business.

53.

53. (1) The Minister may require the information required to be furnished in respect of an insurance undertaking which carries on business in the State by way of a branch or by way of provision of services to be supplied in the Irish or the English language.

• (2) The Minister shall not make 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 reserves, forms and other printed documents which an insurance undertaking with a branch established in the State or providing services into the State intends to use in its dealings with policyholders.

• (3) The Minister may require the non-systematic notification of the general and special policy conditions and other documents necessary for the purposes of verifying compliance with the law (including relevant provisions of these Regulations) concerning insurance contracts. This notification shall not constitute a prior condition for an insurance undertaking to carry on insurance business by way of branch establishment or by way of services into the State.

54 Prevention of irregularities.

54.

54. (1) Where an insurance undertaking is carrying on insurance business by way of branch establishment or by way of services into the State, it shall submit to the Minister, on request, all documents which the Minister considers necessary for the purposes of implementing this Article insofar as an insurance undertaking with a head office established in the State is also required to do so.

• (2) Where an insurance undertaking carrying on insurance business by way of branch establishment or by way of services into the State does not comply with the Insurance Acts and Regulations, the Minister shall by direction require the insurance undertaking to do so.

• (3) Where an insurance undertaking fails to comply with a direction referred to in sub-article (2) of this Article, the Minister shall inform the supervisory authorities of the home Member State so that they may take all appropriate measures in accordance with Article 40 (4) of the Directive.

• (4) If, after invoking the procedures of sub-article (3) of this Article, the measures taken against the insurance undertaking carrying on insurance business by way of services into the State or by way of branch establishment are, in the opinion of the Minister, not adequate and the insurance undertaking continues to contravene the Insurance Acts and Regulations, the Minister may, after informing the supervisory authorities of the home Member State, apply to the Court for such order as to the Court may seem fit, in order to prevent further infringements of the Insurance Acts and Regulations, including insofar as is necessary and in accordance with the Insurance Acts and Regulations, the prevention of that undertaking from continuing to conclude new insurance contracts within the State.

• (5) Nothing in this Article shall affect any other powers of the State to proceed against insurance undertakings transacting business in the State for failing to comply with the laws of the State, including the possibility of preventing insurance undertakings from continuing to conclude new insurance contracts within the State.

• (6) Any order of the Court under sub-article (4) or measure adopted by the Minister pursuant to this Article shall be communicated to the insurance undertaking and shall be supported by the precise grounds for the adoption of the measure.

• (7) Where the supervisory authorities of another Member State request the Minister to take appropriate measures in accordance with Article 40 (4) of the Directive in relation to failure to comply with the laws of that State by an insurance undertaking established in the State and which is carrying on insurance business by way of services into the former Member State or by way of a branch establishment, the Minister may apply to the Court for an order enforcing such compliance and shall communicate accordingly to the supervisory authorities of the Member State of provision of services or the Member State of the branch.

PART 7 Advertising, Winding-up, Statistical Requirements

55 Advertising.

55.

55. An insurance undertaking may advertise its services, through all available means of communication, in the State subject to any rules governing the form and content of such advertising adopted in the interest of the general good.

56 Winding-up.

56.

56. In the event of an insurance undertaking being wound up, commitments arising from contracts underwritten in the course of carrying on insurance business by way of services or through a branch establishment shall be met in the same way as those arising under that insurance undertaking's other insurance contracts, without distinction of nationality, as far as the insured and the beneficiaries are concerned.

57 Statistical information.

57.

57. (1) An insurance undertaking with its head office in the State shall inform the Minister separately in respect of those transactions effected by it by way of establishment and those effected by it by way of services of the amount of the premiums without deduction of reinsurance, and shall so inform the Minister in respect of each Member State where such transactions are effected and in respect of each of Classes I to VII as defined in Annex I to these Regulations.

• (2) The Minister shall forward the information provided in accordance with sub-article (1) of this Article within a reasonable period of time and in aggregate form to the supervisory authorities of each of the Member States which so requests.

58 Statistical requirement regarding services and branch insurance business.

58.

58. The Minister may request the supervisory authority of the home Member State of an insurance undertaking which carries on insurance in the State by way of services or by way of branch establishment, to submit the appropriate information referred to in sub-article (1) of Article 57 and other appropriate information in order that the statistical needs of the State may be fulfilled.

59 Statistical information in the general good.

59.

59. The Minister may, in addition, in the interest of the general good, require an insurance undertaking which has its head office in the territory of another Member State and is transacting insurance business in the State to supply such statistical information in such form and manner as the Minister may specify from time to time.

PART 8 Fiscal Arrangements, Acquired Rights, Right of Appeal.

60 Fiscal arrangements.

60.

60. (1) Every insurance contract for which the commitment is situated in the State shall be subject to the indirect taxes and parafiscal charges on insurance premiums payable under the law of the State.

• (2) The law applicable to the contract under the provisions of Article 42 shall not affect sub-article (1) of this Article.

61 Acquired rights.

61.

61. (1) An insurance undertaking which has commenced business by way of a branch establishment in the State before the coming into operation of provisions adopted in implementing these Regulations shall be presumed to have been subject to the procedure laid down in accordance with Article 10 (1) to (5) of the First Directive.

• (2) A branch referred to in sub-article (1) of this Article shall, from the date of entry into force of provisions adopted in implementing these Regulations be subject to the relevant provisions laid down in accordance with these Regulations.

62 Right of appeal to Court.

62.

62. Any decision, direction, requirement or request given or made by the Minister under these Regulations may, within twenty-one days from the day on which it was notified to the person concerned be appealed to the Court.

PART 9 Provisions Related to Branches of Third Country Insurance Undertakings, Rules Applicable to the Assignment of Third Country Branch Policies, Penalties, Fees

63 Third country branch provisions.

63.

63. Articles 63 to 72 of these Regulations apply to a life assurance undertaking whose head office is not in a Member State (a "third country undertaking").

64 Application for authorisation.

64.

64. (1) An application for an authorisation may be made to the Minister by a third country undertaking which proposes to establish a branch in the State.

• (2) No insurance undertaking to which Articles 63 to 72 apply may carry on both the business of life assurance and the business of non-life insurance of a class referred to in Annex I to the European Communities (Non-Life Insurance) Framework Regulations, 1994.

• (3) A branch of a third country undertaking authorised to undertake life assurance in the State may apply to extend its business to any class of life assurance for which it is not authorised.

65 Conditions of admission.

65.

65. An insurance undertaking having its head office situated outside the territories of the Member States applying for an authorisation to establish a branch in the State shall fulfil at least the following conditions:

( a ) it is entitled to undertake insurance business under the law of the State where its head office is situated;

( b ) it establishes a branch in the State;

( c ) it undertakes to maintain at the place of management of the branch in the State accounts specific to the business which it undertakes in the State and to keep at that place all the records relating to the business transacted in the State;

( d ) it designates an authorised agent for such purposes as the Minister may require and is approved by the Minister;

( e ) it possesses in the State assets of an amount equal to at least one-half of the minimum amount required by Article (3) of Part B of Annex II to these Regulations in respect of an undertaking to which that Article applies and deposits with the Court one-fourth of that minimum amount as security;

( f ) it undertakes to keep a margin of solvency in accordance with Article 67,

( g ) it submits a scheme of operations in accordance with, insofar as is applicable, Article 7 (2) (b) as if it were an insurance undertaking to which that Article applies.

66 Technical reserves including mathematical reserves.

66.

66. An insurance undertaking authorised under Article 65 of these Regulations shall establish and maintain technical reserves, including mathematical reserves, adequate to cover the underwriting liabilities assumed in the State in accordance with Article 12 of these Regulations.

67 Solvency margin.

67.

67. (1) Subject to sub-article (2) of this Article, Annex II and Article 36 (2) shall apply to an insurance undertaking to which this Article applies.

• (2) In calculating a solvency margin for the purposes of this Article, account shall be taken only of the premiums or contributions and claims pertaining to the business effected by the insurance undertaking in the State or in another Member State, as appropriate.

• (3) The assets representing the solvency margin shall be retained in the State up to the amount of the guarantee fund required by Article 68 and any excess shall be retained either in the State or in another Member State.

68 Guarantee Fund.

68.

68. (1) Subject to sub-article (2) of this Article, Part B of Annex II shall apply to an undertaking to which this Article applies.

• (2) The amount of a minimum guarantee fund shall not be less than one-half of the minimum required under Article (3) of Part B of Annex II and the deposit lodged under Article 65 (e) shall be reckoned in calculating the amount of a guarantee fund for the purposes of this Article.

69 Annual returns.

69.

69. Save as provided in Article 71, Article 13 shall, insofar as is applicable, apply to an undertaking to which this Article applies as if the insurance undertaking was one whose head office is situated in the State.

70 Advances under Article 30 of the First Directive.

70.

70. (1) An undertaking which obtains an authorisation from a Member State and subsequently obtains an authorisation from one or more Member States in respect of a branch may apply to the Minister for the advantages specified in Article 30 of the First Directive which may be granted only jointly.

• (2) Article 30 (2) and (3) and (4) of the First Directive shall apply in such a case.

71 Application of Articles 36 and 37.

71.

71. (1) Articles 36 and 37 shall apply to an insurance undertaking to which this Article applies.

• (2) In the case of an undertaking which has, in accordance with Article 70, availed itself of the advantages specified in Article 30 of the First Directive, the references in Articles 35, 36 and 37 of these Regulations to another Member State shall be construed as references to the Member State in which the undertaking in question first commenced to carry on business.

72 Assignment of third country branch insurance policies.

72.

72. (1) Subject to the provisions of section 13 of the Assurance Companies Act, 1909, section 36 of the Insurance Act, 1989 , and these Regulations and following consultation with the Minister, an insurance undertaking to which Part 8 of these Regulations applies may assign all or part of its portfolio of insurance policies in accordance with the following sub-articles of this Article.

• (2) Where a branch established in the State, of an insurance undertaking whose head office is not situated in the territory of a Member State, proposes to assign all or part of its portfolio of insurance policies covering insurance business to an assignee established in the State, the assignment shall not be effected unless the assignee possesses the necessary solvency margin after taking the assignment into account or, where appropriate, the supervisory authorities of the Member State referred to in Article 30 of the First Directive certify that the assignee possesses the necessary solvency margin after taking the assignment into account.

• (3) Where a branch established in the State, of an insurance undertaking whose head office is not situated in the territory of a Member State, proposes to assign all or part of its portfolio of insurance policies covering insurance business to an assignee with a head office in another Member State, the assignment shall not be effected unless the supervisory authorities of the head office of the Member State certify that the assignee possesses the necessary solvency margin after taking the assignment into account.

• (4) A branch established in the State of an insurance undertaking whose head office is not situated in the territory of a member State may not assign all or part of its portfolio of insurance policies covering insurance business to an undertaking, established in another Member State, whose head office is not situated in the territory of a Member State.

• (5) In the cases referred to in sub-articles (2) and (3) of this Article, the assignment shall not be affected without the agreement of the supervisory authorities of the Member States in which the commitments are situated if different from the Member State where the branch is established.

• (6) Where the supervisory authorities of the Member States in which the commitments are situated have not given a response indicating consent to or an opinion on the proposed assignment to the Minister within three months of receiving notification of the assignment, the assignment shall be deemed to be agreed.

• (7) Where the Minister is consulted in accordance with Article 49 (4) and (5) of the Directive, the Minister shall have a period of three months from the date of consultations by the supervisory authorities of the home Member State within which to issue an opinion on or consent to the proposed assignment.

• (8) Where the Minister has not given a response indicating an opinion on or consent to the proposed assignment at the expiry of the period referred to in sub-article (7) of this Article, the assignment shall be deemed to be agreed.

• (9) An assignment effected in accordance with this Article shall be published by advertisement once in Iris Oifigiúil and once in each of two daily newspapers published in the State and published in the Member State where the commitment is situated in accordance with the law of that Member State.

• (10) An assignment effected in accordance with this Article shall be valid against the policyholders, the insured persons and any other persons having rights or obligations arising out of the insurance policies assigned.

73 Penalties.

73.

73. (1) Insurance undertakings and all persons concerned shall comply with these Regulations, including any applicable decision, direction, requirement or request of the Minister thereunder.

• (2) A person who fails to comply with any provision of these Regulations shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,500.

• (3) If, after conviction of an offence, a person continues to contravene the provision, that person shall be guilty of an offence on each day on which the contravention continues and shall be liable on summary conviction to a fine not exceeding £1,500 for each such offence.

• (4) Where an offence under these Regulations is committed by a body corporate and is proved to have been so committed with the consent or connivance of or to be attributable to any neglect on the part of a director, manager, secretary or other officer of the body corporate, the director, manager, secretary or other officer or any person purporting to act in such capacity shall, as well as the body corporate, be guilty of an offence and shall be liable to be proceeded against and punished accordingly.

• (5) A prosecution for an offence under these Regulations may be brought by the Minister.

74 Fees.

74.

74. (1) An application to the Minister for an authorisation under these Regulations shall be in writing and shall, when filled in and completed by or on behalf of the applicant for such authorisation, be sent by post to or left with the Secretary of the Department of Enterprise and Employment and shall be accompanied by—

( a ) if the application is by an undertaking mentioned in Article 6 (8) (a) of these Regulations, a fee of £4,000;

( b ) if the application is by an insurance undertaking mentioned in Article 6 (8) (b) of these Regulations, a fee of £1,000;

( c ) if the application is by an insurance undertaking mentioned in Article 6 (8) (a) of these Regulations which proposes to establish a branch outside the State, a fee of £2,000;

( d ) if the application is by an undertaking mentioned in Article 64 (1) of these Regulations, a fee of £2,000;

( e ) if the application is by an undertaking mentioned in Article 64 (3) of these Regulations, a fee of £1,000;

• (2) The Minister may, by order, amend any amounts specified in paragraphs (a) to (e) of sub-article 1 of this Article.

PART 10 Reciprocity Provisions, Interpretation of Sections 93 and 94 of the Insurance Act, 1936

75 Application of articles 75 to 79 to third country undertakings and acquisitions by such undertakings.

75.

75. Articles 75 to 79 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.

76 Definitions.

76.

76. For the purposes of this Part—

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

"parent undertaking" and "subsidiary" have the meanings assigned to them in Article 40 (9).

77 Notification to the Commission of authorisations and acquisitions of undertakings governed by the laws of a third country.

77.

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

( a ) of any authorisation of a 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 European Communities insurance undertaking which is authorised by the Minister such that the latter would become a subsidiary of the former.

• (2) When authorisation is granted to the 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.

78 Notification to the Commission of difficulties encountered in establishing or carrying on business in a third country.

78.

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

79 Reciprocity measures.

79.

79. (1) The Minister shall comply with decisions made in accordance with sub-article 4 of Article 32b of Council Directive 79/267/EEC as inserted by Article 9 of the Second Directive, to limit or suspend decisions:

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

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

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

• (3) The measures referred to in sub-article (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 sub-article (2) of this Article that such measures shall be continued.

• (4) The limitations or suspension referred to in sub-article (1) of this Article shall not apply to the setting up of subsidiaries by insurance undertakings or their subsidiaries duly authorised in the European Communities or to the acquisition of holdings in European Communities' undertakings by such undertakings or subsidiaries.

• (5) Whenever it appears to the Commission that one of the situations as described in paragraphs 3 and 4 of Article 32b of Council directive 79/267/EEC as inserted by Article 9 of the Second Directive has arisen, the Minister shall inform the Commission, at its request—

( a ) of any request for the authorisation of a 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 European Communities' insurance undertaking such that the latter would become the subsidiary of the former.

• (6) The obligation to provide the information referred to in sub-article (5) of this Article shall lapse once an agreement is concluded with the third country referred to in paragraph 3 or 4 of Article 32b of Council Directive 79/267/EEC as inserted by Article 9 of the Second Directive when the measures referred to in the second or third subparagraph of paragraph 4 of the said Article 32b cease to apply.

• (7) Measures taken under this Article shall comply with the obligations of the European Communities under any international agreement, bilateral or multilateral, governing the taking-up and pursuit of the business of insurance undertakings.

80 Interpretation of Sections 93 and 94 of the Insurance Act, 1936 .

80.

80. For the purposes of sections 93 and 94 of the Insurance Act, 1936 , and whenever the context so requires, every insurance policy, bond, certificate or other instrument of insurance issued by an insurance undertaking or syndicate carrying on business either by way of services or by way of establishment in respect of risks situated in the State shall be deemed to be issued in the State, and all moneys which become or may become due and payable by such insurance undertaking or syndicate under such insurance policy shall be payable and paid in the State, unless the policy otherwise provides.

ANNEX I

A. Classes of insurance

Class	Description
I	Life assurance and contracts to pay annuities on human life as described in Article 1 (1) (a), (b) and (c) of the First Directive, but excluding contracts within Classes II and III below.
II	Contracts of insurance to provide a sum on marriage or on the birth of a child, being contracts expressed to be in effect for a period of more than one year.
III	The assurances referred to in Article 1 (1) (a) and (b) of the First Directive which are linked to investment funds.
IV	Permanent health insurance as defined in Article 2 of these Regulations.
V	Tontines as described in Article 1 (2) (a) of the First Directive where these are carried on by an undertaking holding an authorisation.
VI	Capital redemption operations as described in Article 1 (2) (b) of the First Directive where these are carried on by an insurance undertaking holding an authorisation.
VII	Management of group pension funds as described in Articles 1 (2) (c) and 1 (2) (d) of the First Directive where these are carried on by an undertaking holding an authorisation.

B. Correspondence between classes of life assurance licensed under the Insurance Act, 1936 , and the classes set out in this Annex to these Regulations.

(1)	(2)
Classes of business licensed under the Insurance Act, 1936 .	Equivalent classes of insurance business specified in Schedule I to these Regulations.
Life Assurance	I, II, III, IV, V, VI, VII.
Industrial Assurance	I, II and III insofar as they relate to Industrial Assurance as defined in the Insurance Act, 1936 .

ANNEX II

PART A

SOLVENCY MARGIN

( a ) the paid up share capital or, in the case of a mutual insurance undertaking, the effective initial fund plus any members' accounts which meet all the following criteria:

• (i) the memorandum and articles of association must stipulate that payments may be made from these accounts to members only insofar as this does not cause the solvency margin to fall below the required level, or, after the dissolution of the insurance undertaking, if all the insurance undertaking's other debts have been settled;

• (ii) the memorandum and articles of association must stipulate, with respect to any such payments for reasons other than the individual termination of membership, that the competent authorities must be notified at least one month in advance and can prohibit the payment within that period and

• (iii) the relevant provisions of the memorandum and articles of association may be amended only after the competent authorities have declared that they have no objection to the amendment, without prejudice to the criteria stated in (a) and (b);

( b ) one-half of the unpaid share capital or the initial fund, once the paid-up part reaches 25 per cent. of that share capital or fund,

( c ) reserves (including both statutory reserves and free reserves) not corresponding to underwriting liabilities,

( d ) any carry-forward of profits,

( e ) with the consent of the Minister, cumulative preferential share capital and subordinated loan capital up to 50 per cent. of the margin, no more than 25 per cent. of which shall consist of subordinated loans with a fixed maturity, or fixed term cumulative preferential share capital, and provided the following minimum criteria are met:

• (i) in the event of the bankruptcy or liquidation of the insurance undertaking, binding agreements must exist under which the subordinated loan capital or preferential share capital ranks after the claims of all other debts outstanding at the time have been settled.

Subordinated loan capital must also fulfil the following additional conditions:

• (ii) only fully paid-up funds may be taken into account;

• (iii) for loans with a fixed maturity, the original maturity must be at least five years. No later than one year before the repayment date the insurance undertaking must submit to the Minister for approval a plan showing how the solvency margin will be kept at or brought to the required level at maturity, unless the extent to which the loan may rank as a component of the solvency margin is gradually reduced during at least the last five years before the repayment date. The Minister may authorize the early repayment of such loans provided application is made by the issuing insurance undertaking and its solvency margin will not fall below the required level;

• (iv) loans the maturity of which is not fixed must be repayable only subject to five years' notice unless the loans are no longer considered a component of the solvency margin;

• (v) the loan agreement must not include any clause providing that in specified circumstances, other than the winding-up of the insurance undertaking, the debt will become repayable before the agreed repayment dates;

• (vi) the loan agreement may be amended only after the Minister has raised no objection to the amendment;

( f ) with the consent of the Minister securities with no specified maturity date and other instruments that fulfil the following conditions, including cumulative preferential shares other than those mentioned in the preceding indent, up to 50 per cent. of the margin for the total of such securities and the subordinated loan capital referred to in the preceding indent:

• (i) they may not be repaid on the initiative of the bearer or without the prior consent of the Minister;

• (ii) the contract of issue must enable the insurance undertaking to defer the payment of interest on the loan;

• (iii) the lender's claim on the insurance undertaking must rank entirely after those of all non-subordinated creditors;

• (iv) the documents governing the issue of the securities must provide for the loss-absorption capacity of the debt and unpaid interest, while enabling the insurance undertaking to continue its business;

• (v) only fully paid-up amounts may be taken into account.

( g ) on application, with supporting evidence, to the Minister and with the Minister's consent:

• (i) an amount equal to 50 per cent. of the insurance undertaking's future profits; the amount of the future profits shall be obtained by multiplying the estimated annual profit by a factor which represents the average period left to run on policies; the factor used may not exceed 10; the estimated annual profit shall be the arithmetical average of the profits made over the last five years in the activities specified in Article 1 of the Directive.

• (ii) where zillmerizing is not practised or where, if practised, it is less than the loading for acquisition costs included in the premium, the difference between a non-zillmerized or partially zillmerized mathematical reserve and a mathematical reserve zillmerized at a rate equal to the loading for acquisition costs included in the premium; this figure may not, however, exceed 3.5 per cent. of the sum of the differences between the relevant capital sums of life assurance activities and the mathematical reserves for all policies for which zillmerizing is possible; the difference shall be reduced by the amount of any undepreciated acquisition costs entered as an asset;

• (iii) where approval is given by the supervisory authorities of the Member States concerned in which the undertaking is carrying on its activities, any hidden reserves resulting from the under-estimation of assets and over-estimation of liabilities other than mathematical reserves insofar as such hidden reserves are not of an exceptional nature.

• (iv) Rules in relation to an application to the Minister in accordance with Article 2 (g) of this Annex are contained in Annex VI to these Regulations.

( a ) for the kinds of insurance referred to in Article (1) (a) and (b) of the First Directive, other than assurance linked to investment funds, and for the operations referred to in Article 1 (3) of the First Directive, the solvency margin must be equal to the sum of the following two results:

— first result:

a 4 per cent. fraction of the mathematical reserves relating to direct business gross of reinsurance cessions and to reinsurance acceptances shall be multiplied by the ratio, for the last financial year, of the total mathematical reserves net of reinsurance cessions to the gross total mathematical reserves as specified above; that ratio may in no case be less than 85 per cent.;

— second result:

• (i) for policies on which the capital at risk is not a negative figure, a 0.3 per cent fraction of such capital underwritten by the undertaking shall be multiplied by the ratio, for the last financial year, of the total capital at risk retained as the undertaking's liability after reinsurance cessions and retrocessions to the total capital at risk gross of reinsurance; that ratio may in no case be less than 50 per cent.

• (ii) for temporary assurance on death of a maximum term of three years, the above fraction shall be 0.1 per cent.

• (iii) for temporary assurance on death of a term of more than three years but not more than five years, the above fraction shall be 0.15 per cent.

( b ) For the supplementary insurance referred to in Article 1 (1) (c) of the First Directive, the solvency margin shall be equal to the result of the following calculation:

— the premiums or contributions (inclusive of charges ancillary to premiums or contributions) due in respect of direct business in the last financial year in respect of all financial years shall be aggregated;

— to this aggregate there shall be added the amount of premiums accepted for all reinsurance in the latest financial year;

— from this sum shall then be deducted the total amount of premiums or contributions cancelled in the last financial year as well as the total amount of taxes and levies pertaining to the premiums or contributions entering into the aggregate;

— the amount so obtained shall be divided into two portions, the first extending up to 10 million units of account and the second comprising the excess; 18 per cent. and 16 per cent. of these portions respectively shall be calculated and added together; the result shall be obtained by multiplying the sum so calculated by the ratio existing in respect of the last financial year between the amount of claims remaining to be borne by the undertaking after deduction of transfers for reinsurance and the gross amount of claims; this ratio may in no case be less than 50 per cent.

( c ) For permanent health insurance not subject to cancellation and as defined at Article 2 of these Regulations and for capital redemption operations referred to in Article 1 (2) (b) of the First Directive, the solvency margin shall be equal to a 4 per cent. fraction of the mathematical reserves, calculated in compliance with the conditions set out in the first result in (a) of this Article.

( d ) For tontines referred to in Article 1 (2) (a) of the First Directive the solvency margin shall be equal to 1 per cent. of their assets.

( e ) For assurances covered by Article 1 (1) (a) and (b) of the First Directive, linked to investment funds, and for the operations referred to in Article 1 (2) (c), (d) and (e) of the First Directive, the solvency margin shall be equal to:—

— a 4 per cent. fraction of the mathematical reserves, calculated in compliance with the conditions set out in the first result in Article 3 (a) of this Annex insofar as the undertaking bears an investment risk, and a 1 per cent. fraction of the reserves calculated in the same fashion, insofar as the undertaking bears no investment risks provided that the term of the contract exceeds five years and the allocation to cover management expenses set out in the contract is fixed for a period exceeding five years

plus

— a 0.3 per cent. fraction of the capital at risk calculated in compliance with the conditions set out in (i) of the second result in (a) of this Article.

PART B

GUARANTEE FUND

ANNEX III

INFORMATION TO BE SUPPLIED TO THE POLICYHOLDER

Information about the insurance undertaking

Information about the commitment

Information to be supplied to the policy holder during the term of the insurance contract

ANNEX IV

DETERMINATION OF LIABILITIES

Application

Actuarial principles applicable to the calculation of life assurance business liabilities

( a ) Proper provision shall be made for all liabilities on prudent assumptions having regard to the relevant factors and using a sufficiently prudent prospective actuarial valuation and taking account of the liabilities as determined by the policy conditions for each existing contract, including:

— all guaranteed benefits, including guaranteed surrender values,

— bonuses to which policyholders are already either collectively or individually entitled, however those bonuses are described

— vested, declared or allotted,

— all options available to the policyholder under the terms of the contract,

— expenses, including commissions,

taking credit for future premiums due. The amount so calculated shall in the aggregate not in any case be less than the amount calculated in accordance with paragraphs 3 to 12 of this Annex.

( b ) The use of a retrospective method is allowed, if it can be shown that the resulting technical reserves are not lower than would be required under a sufficiently prudent prospective calculation or if a prospective method cannot be used for the type of contract involved.

( c ) Liabilities shall be calculated separately for each contract. The use of appropriate approximations or generalisations is allowed, however, where they are likely to give approximately the same result as individual calculations. The principle of separate calculation shall in no way prevent the establishment of additional provisions which are not individualised.

( d ) In the case of participating contracts, the method of calculation shall take into account, either implicitly or explicitly, future bonuses of all kinds, in a manner consistent with the other assumptions on future experience and with the current method of distribution of bonuses.

( e ) The method of calculation shall not be subject to discontinuities from year to year arising from arbitrary changes to the method or the bases of calculation and shall be such as to recognise the distribution of profits in an appropriate way over the duration of each policy.

( f ) A prudent valuation is not a "best estimate" valuation but shall include an appropriate margin for adverse deviation of the relevant factors.

( g ) The statistical elements of the valuation and the allowance for expenses used shall be chosen prudently, having regard to the Member State of the commitment, the type of policy and the administrative costs and commissions expected to be incurred.

Nature and term of assets3

Avoidance of future valuation strain