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Market Issues Lecture The Insurance
Institute of London Thursday 9 January
Is there a genuine European Market ?
Pierre FLORIN
The Insurance Institute of London
Thursday 9 January 2003
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Genuine means authentic, sincere, serious.
1- Yes, European Market belongs today to our
everyday authentic business life. 2- No,
this market is not actually sincere at the
present time. 3- Yes, a serious and inevitable
aspect of our common future.
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(No Transcript)
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INSURANCE AND RELATED AREAS
Winding-up Personal data 3rd Non-life
directive 3rd Life directive Intermediation Com
petition Financial Services Prudential
Supervision Investment services Environmental
Liability Insurance Group Financial Services
Action plan Pensions 4th Motor
Directive Electronic commerce General Good
Product Liability Solvency I Distance
marketing Codification of life insurance Product
Safety E-commerce and financial
services Financial Conglomerates European
contract law International Accounting Standards
EU / IASB Consumer protection Taxation of cross
border provision of occupational
pensions Alternative dispute resolution
(ADR) 5th Motor Directive Electronic Commerce
and insurance Air transport / terrorism Annual
and consolidated accounts
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What is a real and genuine Single Market ?
The Single Insurance Market must be understood as
a market in which . insurance can be transacted
freely from one Member State to another, either
by way of freedom of services (FOS)
(cross-border business) or freedom of
establishment (FOE) through agencies or branches,
. insurance companies can work and be organised
on a genuine European basis, in an homogeneous
fiscal, accounting and administrative
environment (borderless business)
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commercial and legislative realities
Ø lack of consumer confidence (proximity factor)
Ø need to meet customer high-quality service
expectations, often in their own
language Ø need to comply with various host
country legislative provisions due to
insufficient harmonisation of contract law,
marketing law (for private consumers) and tax
regimes Ø diversity of insurance practices
including need to comply with local pricing
practices and rules (e.g. compensation rules in
liability insurance) and fulfil local best
practice Ø complications of settling non-life
insurance claims in the best interests of
consumers without a permanent presence Ø
difference in languages and culture
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the Genuine Single Market would allow the
possibility
Ø of concluding pan-European alliances,
partnerships, and affinity schemes
which will have to be rolled out locally, with or
without a presence in all markets
concerned Ø of serving the entire European
market from a unique product
centre, designing products, pricing or covers for
all countries Ø more generally of pooling the
support activities and centralising the
management of insurance companies contracts Ø of
a complete flexibility and freedom in the choice
of distribution channel without any
explicit legislative bias towards any
specific channel (e.g. internet)
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How to create a real genuine European Market ?
Ø clarify the scheme applicable to insurance
transactions Ø guarantee the consistency and
efficiency of measures already
adopted and those under discussion Ø
rationalise, clarify and simplify existing
conditions of exercise of
insurance Ø ensure that existing rules are
properly and homogeneously
enforced and applied on all national markets
Ø encourage greater co-ordination between
supervisory authorities Ø envisage the
possibility/opportunity to revise the conflict of
law rules which designate
the law applicable to the contract embodied in
the Second and Third
Insurance directives, for Rome Convention
(1980) principles consider
choice of law option
clarify the scope of rules on consumer
protection
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Internal Market Commissionner Frits Bolkestein
said, the 2nd of december 2002
Benefits from further integrating financial
market in the EU are huge. It will increase
confidence, create more economic growth, more
jobs and sustained prosperity. It will make the
EU economy more competitive, efficient,
innovative and thus improve prospects of the EU
meeting its target of becoming the most dynamic
and competitive economy in the world by 2010.
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But
Performance is Reality.