Order on Cross-Border Co-Insurance Activities within the European Union or Countries with Which the Union Has Agreements in the Financial Sector

Order on Cross-Border Co-Insurance Activities within the European Union or Countries with Which the Union Has Agreements in the Financial Sector 1)

Pursuant to Section 7 and Section 316, subsection 1, of Act No. 718 of 13 June 2023 on Insurance Business, the following is enacted:

Scope of Application and Definitions

Section 1. This Order applies to group 1 insurance companies that conduct co-insurance activities with one or more of the risks listed under insurance classes 3-16 in Annex 1 to the Act on Insurance Business, and which meet the following conditions:

1. The risk is a large risk, cf. Section 2.
2. The risk is covered under a single agreement with a total premium and for the same period by several insurance companies, which as co-insurers are liable for their respective shares, one of which is the leading insurance company.
3. The risk is located within the European Union or in countries with which the Union has concluded an agreement in the financial sector.
4. To be able to cover the risk, the leading insurance company is treated as an insurance company that could itself cover the entire risk.
5. At least one of the co-insurers participates in the agreement through its head office or a branch established in another Member State than where the leading insurance company is established.
6. The leading insurance company fully performs the role assigned to it according to practice within co-insurance activities and determines, in particular, the insurance terms and tariffs.

Subsection 2. Section 50, subsection 1, Section 52, subsections 1 and 2, items 2 and 4, Section 53, subsection 1, Section 54, Sections 61 and 62, Section 63, subsections 1, 2, 3, third sentence, and subsection 5, of the Act on Insurance Business, and Section 105 of the Road Traffic Act, apply only to the leading insurance company.

Subsection 3. Co-insurance activities that do not meet the conditions mentioned in subsection 1 remain subject to the provisions of the Act on Insurance Business, with the exception of Sections 3-5 of this Order.

Section 2. In this Order, large risks are understood as:

1. Risks under insurance classes 4-7, 11, and 12 in Annex 1 to the Act on Insurance Business.
2. Risks under insurance classes 14 and 15 in Annex 1 to the Act on Insurance Business, when the policyholder conducts industrial, commercial, or liberal professional activities, and the risks relate to this business.
3. Risks under insurance classes 3, 8-10, 13, and 16 in Annex 1 to the Act on Insurance Business, when the policyholder meets at least two of the following conditions: a) The policyholder has a balance sheet total of at least EUR 6.2 million. b) The policyholder has an annual net turnover of at least EUR 12.8 million. c) The policyholder had 250 or more full-time employees in the most recent financial year.

Insurance Technical Provisions

Section 3. The size of the insurance technical provisions is determined by the various co-insurers in accordance with the rules established by their home countries, or in the absence thereof, in accordance with the practice applicable in the home country. However, the insurance technical provisions must be at least as large as the provisions determined by the leading insurance company in accordance with the rules of the company's home country.

Statistical Information

Section 4. Each co-insurer must possess statistical information showing the extent of the co-insurance activities within the European Union or the countries with which the Union has concluded an agreement in the financial sector, in which the co-insurer participates, including in which Member States the risk for the co-insurance activities is located.

Penal Provisions

Section 5. Violation of Sections 3-4 is punishable by a fine.

Subsection 2. Companies etc. (legal persons) may be subject to criminal liability according to the rules in Chapter 5 of the Criminal Code.

Entry into Force

Section 6. This Order enters into force on 1 January 2025.

Subsection 2. Order No. 1166 of 31 October 2017 on cross-border co-insurance activities within the European Union or countries with which the Union has concluded an agreement in the financial sector is repealed.

The Danish Financial Supervisory Authority, 5 December 2024

Louise Mogensen / Line Bergmann

5 December 2024. 2 No. 1404.

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1. The Order contains provisions implementing parts of 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), OJ 2009, No. L 335, p. 1, and Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 as regards the powers conferred on the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority), OJ 2014, No. L 153, p. 1.

Danish Law Journal A 2024 Published on 7 December 2024 5 December 2024. No. 1404. Ministry of Industry, Business and Financial Affairs, Danish Financial Supervisory Authority, Case No. 24-019472 CQ003084