Circular D1/1707: Article 43ter of the Law of 6 August 1990 on Mutualities and National Unions of Mutualities

COMMISSION BANCAIRE ET FINANCIERE Prudential supervision of credit institutions avenue Louise 99, B-1050 Brussels telephone +32(2)535.22.11 - fax +32(2)535.24.96 (0) VPG/UYN* Brussels, 9 June 1998 D1/ 1707 LETTER-CIRCULAR TO CREDIT INSTITUTIONS

Madam, Sir,

Subject: Article 43ter of the Law of 6 August 1990 on mutualities and national unions of mutualities

I draw your attention to Article 131 of the Law of 22 February 1998 containing social provisions, published in the Belgian Monitor on 3 March 1998, which introduces an Article 43ter, the text of which is attached as an annex, into the Law of 6 August 1990 on mutualities and national unions of mutualities.

This Article 43ter, which entered into force on 13 March 1998, also concerns the credit institution sector in that it prohibits, in particular, any written or tacit agreement aimed at the promotion, distribution, and sale by mutualities and national unions of mutualities of a banking product as defined in the Law of 22 March 1993 on the status and supervision of credit institutions. Any written or tacit agreement aimed at the promotion, distribution, and sale of a service organized by mutualities or national unions of mutualities within the framework of professional activities falling under the banking activity as defined in the aforementioned Law of 22 March 1993 is also prohibited.

I ask you to pay particular attention to the third paragraph of Article 43ter, which presumes, irrebuttably, that the promotion, distribution, and sale of the aforementioned products are carried out pursuant to a written or tacit agreement.

I am sending a copy of this letter to your (your) reviewer(s).

Please accept, Madam, Sir, the expression of my distinguished sentiments.

The President, J.-L. Duplat.

Annex: one

Q 3. The establishment of the Society of Mutual Assistance following the grouping of services of sickness funds enters into force from 1 January of the calendar year following the approval of the statutes by the Control Service. The grouping of services of sickness funds must also be approved by the general meeting of the national union to which they belong. b.

§ 3. The creation of a mutual society following the grouping of mutual services enters into force from 1 January of the civil year following the approval of the statutes by the Control Office. The grouping of mutual services must also be approved by the general assembly of the national union of which they are part. l.

: Art. 131 An Article 43ter, worded as follows, is inserted in the same law:

Art. 43ter. - Any agreement with a national union or a sickness fund that has as its object the promotion, distribution, or sale of an insurance product, as defined in the Law of 25 June 1992 on the insurance contract, as well as of a banking product, as defined in the Law of 22 March 1993 on the status and supervision of credit institutions, is prohibited, even if these products were specially designed for or reserved for members of a sickness fund or a national union.

It is also prohibited, any agreement that has as its object the promotion, distribution, or sale of a service, organized by a national union or a sickness fund as defined in articles 3 and 7, § 4, of the applicable law, within the framework of professional activities that fall entirely or partially within the scope of the Law of 27 March 1995 concerning insurance intermediation and the distribution of insurance or that fall under the activities of the banking sector as defined in the Law of 22 March 1993 concerning the status and supervision of credit institutions.

The promotion, distribution, or sale of the products or services referred to in the first and second paragraphs is irrebuttably presumed to be the consequence of a written or tacit agreement.

Art. 131 An Article 43ter, worded as follows, is inserted in the same law:

Art. 43ter. - Any agreement with a national union or a mutual society that has as its object the promotion, distribution, or sale of an insurance product as defined in the Law of 25 June 1992 on non-life insurance or of a banking product as defined in the Law of 22 March 1993 on the status and supervision of credit institutions is prohibited, even if these products have been specially designed for members of a mutual society or a national union or reserved for them.

Any agreement having as its object the promotion, distribution, or sale of a service organized by a national union or a mutual society, as defined in articles 3 and 7, § 4, of this law, within the framework of professional activities that fall entirely or partially within the scope of the Law of 27 March 1995 concerning insurance intermediation and the distribution of insurance or that fall under the banking activity as defined in the Law of 22 March 1993 on the status and supervision of credit institutions, is also prohibited.

The promotion, distribution, or sale of the products and services referred to in paragraphs 1 and 2 is presumed irrebuttably to be carried out pursuant to a written or tacit agreement.

Existing agreements referred to in the first and second paragraphs cease to produce effects from the first day of the fourth month following the entry into force of this article.

Art. 132 Article 70, § 2, of the same law, is supplemented with the following paragraph:

• Also acquires the status of mutual assistance society - the entity that, pursuant to Article 43bis of this law, has arisen from the grouping of services and organizes at least one service as referred to in article 3, b.

• Also obtains the status of mutual society - the entity constituted pursuant to Article 43bis of this law following the grouping of services and which organizes at least one of the services referred to in article 3, b.

Section II Art. 133 On the turnover tax on pharmaceutical products

Art. 133 Article 191, 15°, of the Law concerning compulsory health care and benefit insurance, coordinated on 14 July 1994, modified by the Royal Decree of .