Printer Friendly

COMPETITION : COURT ORDERS BELGIUM TO OBLIGE MUTUAL COMPANIES TO COMPETE.

On 28 October, the EU Court of Justice censured Belgium for its failure to apply EU competition rules to the legal framework that governs mutual companies(1). Belgium did not contest the Commission's action for failure to fulfil obligations since it had not met the deadline for transposition of Council Directive 73/239/EEC of 24 July 1973 on access to the activity of direct insurance other than life insurance and Council Directive 92/49/EEC of 18 June 1992, which amends it.

The case originated in a complaint lodged by Assuralia, the professional association of insurance companies operating on the Belgian market. The association maintained that Belgian rules gave an advantage to mutual companies over insurers, even though in some cases they offer very close services. The Commission found that Belgian mutual companies were exempted from certain obligations imposed on insurers, in particular a tax of 9.25% as well as guarantee fund and solvency margin criteria, in particular where the annual amount of contributions does not exceed 5 million. The EU executive argued that these conditions were not being met in Belgium.

The Court of Justice sided with the Commission and ordered Belgium to comply with EU law. It held that Belgian mutual companies practice economic activities when they provide supplementary sickness insurance: the principle of solidarity cannot be invoked and mutual companies compete on this market with commercial insurers, such as banks and insurance companies.

Belgium must consequently require mutual firms, like insurance companies, to obtain prior official authorisation and to present a scheme of operations for access to the activity of direct insurance. Mutual firms must also be included among the legal forms required for insurance companies in Belgium. The court also ordered the Belgian authorities to oblige mutual firms to hold a minimum guarantee fund and to comply with rules on sufficient technical reserves and solvency ratios.

EUROPEAN STATUTE

Meanwhile, the Belgian transposition law was passed at the end of April and some of the implementing measures have since been introduced. Only a few still have to be organised, according to the cabinet of Belgian Social Affairs and Health Minister Laurette Onkelinx. Belgian mutual companies have teamed up with their counterparts from across Europe to demand a European statute, noting that no policy action has been taken in this area since the withdrawal of the Commission proposal, in September 2005.

(1) Case C-41/10

COPYRIGHT 2010 Europolitics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2010 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:European Report
Geographic Code:4EUBL
Date:Nov 10, 2010
Words:399
Previous Article:INDUSTRIAL POLLUTION : COUNCIL PUTS SEAL OF APPROVAL ON REVISED IPPC DIRECTIVE.
Next Article:AGRICULTURAL EXPENDITURE : ECJ: TRANSPARENCY DOES NOT OUTWEIGH PROTECTION OF PERSONAL DATA.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters