The Council of State (CTE) of Greece, by its decision No 3783/2014, held that the ‘victims’ of the insurance company Aspis Welfare AEGA will automatically receive 70% of the amounts they claim as compensation after the insurance liquidation procedure has been completed, through the guarantee facility (guarantee fund). It also held that victims of Aspis cannot claim compensation from the Greek State.
This mechanism covers cases of insolvency of insurance undertakings, whether the licence was revoked due to deliberate wrongful acts or mistakes or acts of omission by the State, or ‘unforeseen major economic or financial crises’.
In view of the above, will the Commission say:
(a) Is this arrangement consistent with the jurisprudence of the Court of Justice and European legislation?
(b) Would it not be more appropriate to establish a single regulatory framework for the insurance market, and therefore a single approach to compensation for insurance holders?
(c) In accordance with the decision of the CTE, insurance holders will receive compensation after the completion of the liquidation of Aspis and Commercial, which is expected to last up to 12 years, of which five have already passed. Is this delay compatible with Community law and the Charter of Fundamental Rights?
Answer given by Lord Hill on behalf of the Commission
Starting on 1 January 2016, Directive 2009/138/EC (Solvency II)(1) will introduce a single rulebook for insurance undertakings, setting out a modern, risk-based prudential regime across the EU. Title IV of this directive is a recast of the provisions of Directive 2001/17/EC on reorganisation measures and winding-up proceedings of insurance undertakings. This framework provides insurance claims with a preferential treatment in liquidation, therefore contributing to the protection of policyholders and beneficiaries. In addition, it aims to ensure efficiency and legal certainty in winding-up proceedings, particularly in cross-border situations, so that all creditors are duly informed and treated without discrimination regardless of the Member State in which they reside. The Commission has no specific evidence in the ASPIS case of any breach of Title IV of Directive 2009/138/EC by Greece.
However, Directive 2009/138/EC does not regulate guarantee schemes providing compensation to policyholders and beneficiaries of insurance undertakings in winding-up. Member States are free to set up such arrangements and to define their features, including how much compensation is provided and at which stage in the liquidation, provided such arrangements comply with general principles (e.g. non-discrimination) and rules such as the fundamental freedoms laid down in the EU treaties.
The Commission is also following closely the international debate on recovery and resolution for insurance undertakings organised under the aegis of the Financial Stability Board.
(1) Directive 2009/138/EC of the European Parliament and of the Council of 25.11.2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), OJ L 335, 17.12.2009, p. 1‐155.