EU insurance: Recast Solvency II Directive

With the publication of the Solvency II Directive, major regulatory reform of the European insurance sector becomes official:



DIRECTIVE 2009/138/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast). This text with EEA relevance was published in the Official Journal of the European Union (OJEU) 17.12.2009 L 335/1.


In principle, Directive 2009/138 applies to the following activities:

Article 1
Subject matter

This Directive lays down rules concerning the following:

(1) the taking-up and pursuit, within the Community, of the self-employed activities of direct insurance and reinsurance;

(2) the supervision of insurance and reinsurance groups;

(3) the reorganisation and winding-up of direct insurance undertakings.

The EU member states have until 31 October 2012 to transpose the main provisions of Directive 2009/138 into national law (Article 309).



Recast?


The first recital of Directive 2009/138 says:



A number of substantial changes are to be made to First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance; Council Directive 78/473/EEC of 30 May 1978 on the coordination of laws, regulations and administrative provisions relating to Community co-insurance …[and a number of others]. In the interests of clarity those Directives should be recast.




The Legal Service of the Commission has a web page called Recasting, which explains the meaning of the term. I quote only the first sentence:

Recasting is like codification in that is brings together in a single new act a legislative act and all the amendments made to it. The new act passes through the full legislative process and repeals all the acts being recast. But unlike codification, recasting involves new substantive changes, as amendments are made to the original act during preparation of the recast text.


In other words, recasting is like walking and chewing gum at the same time: Real changes and simpler legislation go together.




Ralf Grahn



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