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BIPAR PRESS No 5 - December 2007Editor:BIPAR Secretariat Av. Albert-Elisabeth, 40 B-1200 Brussels Tel: +32-2-735 60 48 Fax: +32-2-732 14 18 bipar@skynet.be www.bipar.org BIPAR Press is also available on poi.compuvista.com Whilst this information is gathered with suitable care, it is only published as a matter of documentation. Given that "BIPAR Press" only mirrors the articles as published in the specialised press, BIPAR cannot assume any responsibility as to the overall accuracy of its contents. Contents Europe
EU - European Commission's work programme for 2008 On 23 October 2007, the European Commission adopted its work programme for 2008. Five main priorities emerge from this document: growth and employment, sustainable Europe, managing migration, putting the citizen first and Europe as a world partner. The Commission will focus on making markets work better, in the area of retail financial services and in areas where policies can achieve a maximum impact so as to allow consumers and companies alike, and in particular, SMEs, to benefit fully from the internal market. By the end of 2008, the Commission intends to draft a Small Business Act (SBA), aimed at cutting red tape, increasing SMEs' access to European programmes and public procurement, and reducing barriers to cross-border activity through the creation of a European small company statute. The Commission will seek the views of small businesses and their representatives on the possible content of an SBA. The Commission will also examine how taxation policies affect SMEs' growth. The Commission's work programme was developed following detailed discussions with the other institutions, and picks up many of the themes discussed in the globalisation debate at the informal European Council in Lisbon. The Commission's work programme is available in all EU languages on: http://ec.europa.eu/atwork/programmes/index_en.htm EU - ECOFIN ministers adopt conclusions on Lamfalussy On 4 December, the ECOFIN Council (EU finance ministers) adopted a report on the review of the Lamfalussy framework - the four-level regulatory approach which deals with the adoption, implementation and enforcement of legislation and implementing measures with regard to the insurance, securities and banking sectors - which follows those published in past weeks by the European Commission, the Inter-Institutional Monitoring Group and the Level III Committees. These reports all seek to explore the progress made through the Lamfalussy Process towards its stated objectives. The recent crisis in financial markets has led to calls for an urgent examination of the effectiveness of prudential supervision in Europe. Discussions focused on Level III of the procedure, which deals with the role of national supervisors in order to intensify convergence and cooperation. Ministers agreed to limit so-called "goldplating", whereby additional provisions other than those necessary for the transposition of EU directives are added to the legislation at national level. An Italian proposal to establish a European financial supervisor was rejected by the UK and Germany, which host Europe's largest banks. The Council has asked the European Commission to clarify the role and strengthen the working of the Level III Committees by April 2008. The European Commission's report on the review on the Lamfalussy process suggests improving the timetables for the adoption and transposition of legislative and implementing measures, as well as to bring more transparency in consultation procedures. With regard to supervisory cooperation and convergence, the Commission suggests that the legal status of the 3 Level III Committees should be reinforced, as well as the political pressure for them to deliver results. The Commission also believes that the decision-making process within the 3 Level III Committees should be amended, introducing the qualified majority voting, instead of the basis of consensus. In respect of implementation at national level, the Commission seeks for a compliance with Level III measures by Member States regulators and supervisors in the basis of non-binding instruments. EU - Remedies Directive adopted formally by the Council Following an agreement reached in first reading with the European Parliament in June 2007, the Council adopted on 15 November the European Commission's proposal for a Directive reviewing EU rules on remedies in the area of public procurement. According to the Commission, this new Directive improves the national review procedures that businesses can use when they consider that a public authority has awarded a contract unfairly. Contracting authorities will have to wait for at least 10 days after deciding who has won the public contract before the contract can actually be signed. This "standstill period" is designed to give bidders time to examine the decision and to instigate a review procedure if necessary. National courts may also nullify a contract deemed to have been illegally awarded in a non-transparent manner and without prior competitive tendering. The Directive will be published shortly in the EU's Official Journal. EU Member States will then have 24 months to implement it in their national laws. EU - EU begins crackdown on unfair sales practices Only 14 Member States have met the 12 December 2007 deadline to implement the Unfair Commercial Practices Directive, which was officially adopted by the European Commission in May 2005. The Directive will apply where there are no specific provisions regulating unfair commercial practices in EU sector specific legislation. Where such specific provisions do exist, they will take precedence over the Directive. Infringement proceedings have already been launched against those States that have not yet implemented the Directive into national law. The Directive includes a general ban on unfair and aggressive practices. It outlines a black list that includes over 30 banned actions, as for example: "Requiring a consumer who wishes to claim on an insurance policy to produce documents which could not reasonably be considered relevant as to whether the claim was valid, or failing systematically to respond to pertinent correspondence, in order to dissuade a consumer from exercising his contractual rights." The Directive aims at boosting consumer and business confidence in the Single Market so citizens can fully benefit from shopping cross-border. The new rules should also make it easier for businesses (especially SMEs) to carry out cross-border trading. A 32-page brochure, published by the Health & Consumer Protection DG, introduces the Directive and gives concrete examples. It is available in all EU languages on: http://ec.europa.eu/consumers/rights/index_en.htm EU - Common principles on flexicurity approved by European Council On 14 December, the European Council endorsed the agreement reached during the Council of Employment Ministers of 5 December on the common principles on flexicurity (see BIPAR Press no 4/October2007). These common principles are based on effective labour market policies, flexible and reliable contractual arrangements, comprehensive lifelong learning strategies, modern and adequate social protection systems. Member States are invited to take these principles into good account when developing and implementing national flexicurity-orientated policies. Vladimir Spidla, European Commissioner for Employment, Social Affairs and Equal Opportunities, welcomed the agreement on flexicurity but expressed his disappointment that Member States were unable to reach a deal on working time and temporary agency workers. Germany (supported by Luxembourg) wants to establish a minimal age of 25 and a waiting time of five years before benefiting from any additional pension in another Member State. The UK (supported by Ireland and Germany) demands only to apply the equal treatment of temporary workers after six months of a contract, which is almost never since most temporary assignments are very short. EU - Portability of supplementary pension rights At the Council meeting of 5 December, the EU employment and social policy ministers discussed once again the Commission's proposal for a directive on improving the portability of supplementary pension rights. The right to transfer the equivalent of pension rights acquired under one scheme to another has been dropped, due namely to resistance from Germany and a Parliament vote which deleted all provisions with respect to transferability in June 2007. From which age can workers acquire rights to supplementary pensions, and after how long an employment period? The Commission's proposal for a minimum age of 21 and a two-year vesting period met with fierce resistance from Germany, where the minimum age is 25 and the vesting period was only recently reduced from ten to five years. A compromise proposal by the Portuguese Presidency, which foresees a minimum age of 25 and a two-year vesting period, did not find the necessary unanimity at the Council meeting. Work on this file should continue under the forthcoming presidencies. The European Commission stressed that transferability of pension rights, even if not present in the proposal, was still what the Commission was aiming at. The proposal contains a provision (Article 9.2) according to which the transferability issue will be re-examined five years after the Directive's adoption. EU - Latest development regarding SEPA On 15 October 2007, the Council of Ministers adopted the Payment Services Directive. This Directive provides the necessary legal framework for the Single European Payments Area (SEPA) as well as for better payments in all EU countries. SEPA calls for the removal of all technical, legal and commercial barriers between the current national payment markets so that these become a single "domestic" payments market for the whole euro area. Banks will start to upgrade their systems and bank accounts to create SEPA as of 1 January 2008. All banks are planning to have completed the upgrade process, making SEPA a reality for everyone, by the end of 2010. SEPA will impact euro payments made within its entire geographic area. There is a priority implementation focus on the euro area, currently 13 countries. As new countries join the euro they will go through a similar process. However, all non-euro countries will be able to participate in SEPA when dealing with euro payments, and may also choose SEPA standards for their own domestic currency payment instruments.
EU - New IASB chief pushes for single global set of accounting standards The recently newly appointed Chairman of the International Accounting Standards Board (IASB), Mr Gerrit Zalm, is determined to push for a single global set of accounting standards, i.e. the International Financial Reporting Standards (IFRS), which were adopted by the EU in 2005. So far, the EU has insisted on its right to "carve out" particular standards, modifying them to be more flexible. Many countries across the world, like China, India and Canada, are adopting the IFRS and Mr Zalm warned that Europe could not continue to undermine the international effort towards convergence by modifying standards to suit itself. The IFRS is principle-based whereas the US Generally Accepted Accounting Principles (GAAP) is rules-based. In July 2007, the US Securities and Exchange Committee (SEC) made an important step by opening a public consultation on whether to accept the full IFRS standards. However, big international companies want to use the European version of IFRS, not the "full" one and are therefore not interested in the SEC's offer. A further proposal from the US authorities to allow American companies to use IFRS did not really get off as a recent survey shows that only 9% of US companies are ready to take up the offer. EU - Formal investigation into French tax aid to insurers At the end of 2006, the French authorities notified a series of aid measures to encourage the development of special insurance policies ("contrats solidaires" and "contrats responsables") based on solidarity and a sense of responsibility. The first measure consists of an exemption from corporation tax and business tax for management operations connected with certain sickness insurance policies. The second allows a tax deduction for equalisation provisions relating to certain collective supplementary insurance policies covering the risks of death, invalidity and incapacity. A third measure - gradually bringing mutual societies under the ordinary tax rules - will be dealt with in a separate procedure relating to the phasing-out of the special tax arrangements currently applied to such bodies. France sees the aid as a social measure which is purely of benefit to the final consumer, involves no discrimination between insurance providers and is hence compatible with the common market. However, the European Commission wonders whether these state aid measures are compatible with the rules on state aid in the EC Treaty. This is why it opened a formal investigation on 14 November. France - AGEA's White Paper on the role of insurance agents In November 2007, the French Association of insurance agents (AGEA, member of BIPAR) published a White Paper called "Insurance agent - A profession that commits itself" which focuses on the role of insurance agents (13,000 in France) and on the place of insurance in our society. Based on the concerns of the French people, insurance agents have identified four main challenges which also represent true commitments of the profession: to protect consumers' and entrepreneurs' goods on a daily basis, to provide an ideal and personalized protection, to prepare for the future and to anticipate tomorrow's difficulties as well as to protect in a world of risks. This initiative follows and completes AGEA's publicity campaign launched in September 2007, with the message "No to anonymity - Insurance agent - One insures better when one knows better". AGEA's paper is available in French only upon request at the BIPAR Secretariat. Italy - Liability insurance sold in tobacco shops For the first time, Italians will have the possibility to buy their liability insurance in a tobacco shop. Eurizon Tutela, a non-life insurance company owned by Intesa Sanpaolo, Italy's largest banking group, has launched a liability insurance that costs between €49 and €67 and that can be bought in tobacco shops. Eurizon Tutela has signed a contract with Sisal, one of the main operators authorised to sell this kind of insurance. A study has shown that Italians are ready to take out an insurance policy through an alternative distribution channel, such as the tobacco shop, the chemist's or the car dealer. Eurizon Tutela chose tobacco shops because they are spread over a wider territory of the country. As Sisal is authorised to transfer money, procedures have been simplified. The customer can pay for his policy at the tobacco shop and he will be insured on the same day from midnight onwards. He just has to send his reply coupon to the insurer. He will then receive a detailed contract and will have fourteen days to sign it or terminate it. The product has been tested in four towns and will be launched on the whole network in February 2008. It is however not clear whether the whole operation is legal (tobacco shops are not yet registered in the intermediaries' register), an answer is expected shortly from ISVAP, the Italian insurance supervisory authority. Russia - Report on the Russian insurance market According to a Lloyd's report entitled "Russia 2010: A Lloyd's View" and published in October 2007, the value of the Russian insurance market is set to double to €28.9 billion by 2010. Russia is a major emerging market with dramatic GDP growth but faces significant challenges in both its economic and insurance environment that need to be tackled in the medium term in order to achieve sustainable growth. The factors driving a 16% per annum growth rate are market consolidation, an improved regulatory regime, increased broker involvement, the development of the Russian reinsurance market and the introduction of compulsory business classes. However, low capitalisation, lack of transparency and qualified insurance professionals, in conjunction with a general lack of public understanding and distrust in financial services, continue to plague the industry. The Lloyd's report can be downloaded free of charge on the Lloyd's website: http://www.lloyds.com/Lloyds_Worldwide/WMID/ Spain - Agreement between the Association of Insurance Intermediaries and the consumers association José Manuel Valdés, President of the "Consejo General de Colegios de Mediadores" (Spanish Association of Insurance Intermediaries, member of BIPAR), and José Ma Roncero, President of "UCE" (Spanish Association of Consumers), signed a collaboration agreement on 10 October 2007 to cooperate in the protection of insurance consumers' rights and interests. The main reason for the adoption of this agreement has been the role recently played by bancassurance in Spain. The practices carried out by bancassurance operators have, in some cases, damaged consumers and insurance intermediaries. In this regard, 6% of consumers' complaints are related to insurance and to some kind of coercion imposed by banks. Some of the practices denounced by "Consejo" and UCE are the following: - Having to subscribe to a complementary loan to pay the unique premium of a life insurance product required in the subscription of a mortgage. - Selling life and home insurance with an excess of capital in the cover. This increases the price of insurance premiums and it doesn't give a bigger compensation. - Offering insurance products linked to loans with higher premiums than those offered in the market. Through this agreement, the signatories aim to have more force to denounce to the Spanish public administration the irregular activities carried out by banks and contribute to a more transparent insurance market. They will try to convince the Spanish public administration to take official action against these kinds of practices. Switzerland - Swiss insurance supervisory authority recognises French certificate Ofap, the Swiss insurance supervisory authority, now recognises the certificate delivered by Enass, a French insurance school, as a training that allows an insurance broker to work in Switzerland. Since 2006, all brokers must be accredited and listed in the federal register of insurance intermediaries. Employees who have not completed a course recognised by Ofap will no longer be authorised to work in Switzerland from 1 January 2008 onwards. Enass's certificate is the only French training for which Ofap does not require additional professional experience of 5 years to work as a broker in Switzerland.  |
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