Inadvertent freedom to provide services operations

At the time they were published, the Directives on the Coordination of Insurance aimed for the service insurer receiving a single administrative authorisation, granted by the authorities of the Member State in which the insurance company has its registered office. This authorisation would enable the company to operate throughout the European Union. However in practice, the insurance regulators in each Member State have required that the notifications made to the supervisory authority of the home Member State to apply to operate must identify the State or States where such an operation is to be carried out with precision.

This can lead to an inconsistency, when an insurer may be insuring risks in jurisdictions that it never had in mind, due to policyholders changing residence or temporarily relocating without notifying their insurer of the change. In this way, although it has a licence which seemingly extends to the whole of the European Union, the insurer may be in breach of the obligation to make the mandatory notification of all its operations under the freedom to provide services on a country-by-country basis, simply because it is not aware of them.

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