Royal Decree of 21 February 2014 on the application modalities to the insurance sector of Articles 27 to 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services

can be retained, by 1 May 2015 at the latest, in conformity with Article 11, § 1, 1°, A, f), of that same law, as amended by Article 3 of this decree.

Art. 12. The Minister responsible for Economy and Consumers and the Minister responsible for Finance are, each insofar as it concerns him, charged with the implementation of this decree.

Given at Brussels, 21 February 2014.

FILIP

By the King:

The Deputy Prime Minister and Minister of Economy and Consumers, J. VANDE LANOTTE

The Minister of Finance,
K. GEENS

FEDERAL PUBLIC SERVICE FINANCE
FEDERAL PUBLIC SERVICE ECONOMY,
SMEs, MIDDLE CLASSES AND ENERGY

[C − 2014/11142]

21 FEBRUARY 2014. — Royal Decree on the rules for the application of Articles 27 to 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and the financial services to the insurance sector

REPORT TO THE KING

Sire,

The Royal Decree submitted for Your signature gives effect to Article 26, paragraphs 3 and 4, of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services, as amended by Article 19 of the Law of 30 July 2013 strengthening the protection of users of financial products and services as well as the powers of the Financial Services and Markets Authority and containing various provisions (I). Furthermore, it also gives effect to Article 12sexies, § 1, second paragraph, of the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance, as inserted by Article 7 of the aforementioned Law of 30 July 2013.

I. General Considerations

The Law of 30 July 2013 strengthening the protection of users of financial products and services as well as the powers of the Financial Services and Markets Authority and containing various provisions (I) follows on from the reform of the supervisory architecture of the Belgian financial sector, whereby a shift was made from an integrated to a bipolar supervisory model, the so-called "Twin Peaks" model. The changes that this law makes to existing legislation primarily pursue two objectives. The first is the improvement of the existing legal framework with a view to greater efficiency of supervision and better protection of users of financial products and services. The second objective of this law is greater transversal coherence between the rules aimed at ensuring the protection of users of financial products and services.

Within the framework of that second objective, the aforementioned law introduces various provisions amending existing legislation, in particular amending the Law of 2 August 2002 concerning the supervision of the financial sector and financial services. Thus, Article 19 of the Law of 30 July 2013 - between the first and second paragraphs of Article 26 of the Law of 2 August 2002 - inserts a new paragraph on the basis of which insurance companies, as of 30 April 2014 and with regard to their transactions carried out on Belgian territory, are subject to the conduct rules determined by and pursuant to Articles 27, 28 and 28bis of the Law of 2 August 2002.

The amended Article 26, third paragraph, of the Law of 2 August 2002 provides that the King, by a decree deliberated in the Council of Ministers, taken on the advice of the FSMA, may stipulate that the conduct rules determined by and pursuant to Articles 27, 28 and 28bis are not applicable at all or only partially to insurance companies, so that those rules only apply to the types of insurance determined by the King or, more generally, so that account is taken of the fact that insurance contracts are offered to clients. Furthermore, it is for the King, pursuant to the fourth paragraph of that same article, under the same conditions, to provide for an adapted version of certain of those conduct rules for insurance companies, with the intention of clarifying their scope and reach for insurance companies and, more generally, to take into account the fact that insurance contracts are offered to clients. It is clarified that the decrees taken in implementation of those powers are automatically repealed if they are not confirmed by law within twelve months of their publication in the Belgian State Gazette, with the exception however of derogations from the conduct rules which are not prescribed by Articles 27, 28 and 28bis of the law, but pursuant to other articles.

Within the framework of the approach proposed in this draft decree, the concept of "service provider" covers both an insurance company sensu lato and another insurance intermediary than a linked insurance agent. It must however be noted that, within the framework of this decree, linked insurance agents (i.e. insurance agents who, pursuant to one or more agreements or powers of attorney, can only act in the name and on behalf of one or more insurance companies, insofar as the contracts offered in this framework are not mutually competing contracts, and they act under the responsibility of these insurance companies with regard to the insurance contracts concerning them respectively) are equated with the insurance company in whose name and on whose behalf they act. That logic is also followed for insurance sub-agents in the context of their relationship with the insurance intermediaries on whose behalf they act: those sub-agents are equated with the insurance intermediary in whose name and on whose behalf they act (both with regard to the insurance sub-agents of linked insurance agents and with regard to the insurance sub-agents of other types of insurance intermediaries). This does not mean, however, that linked insurance agents and/or insurance sub-agents would not have to apply the conduct rules to which this decree relates, nor that they may not, for example, provide advice on a savings or investment insurance. The approach followed means that those linked insurance agents and those insurance sub-agents, in applying the conduct rules, must comply with the procedures and policies defined by respectively the insurance company or the insurance intermediary on whose behalf they act, and must use the documentation issued by those insurance companies or insurance intermediaries, who remain fully and unconditionally responsible for their actions.

To the extent that, pursuant to the combined reading of Articles 26, second paragraph, of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services, and 12sexies of the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance, the rules determined by and pursuant to Articles 27, 28 and 28bis of the aforementioned Law of 2 August 2002 are declared applicable to insurance companies and insurance intermediaries as of 30 April 2014, this draft decree, using the aforementioned powers, clarifies the manner in which those provisions must be applied to insurance companies and insurance intermediaries, and/or which provisions are not applicable to them.

The Royal Decree submitted for Your signature therefore aims to give effect to the powers referred to in Article 26, third and fourth paragraphs, of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services, by, for the benefit of insurance companies, clarifying the scope and reach of the conduct rules referred to in Articles 27, 28 and 28bis of the Law of 2 August 2002.

The rules set out in the Royal Decree submitted for Your signature are also applicable to insurance intermediaries, insofar as they, pursuant to Article 12sexies, § 1, of the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance, must comply with the conduct rules applicable to insurance companies.

l’article 11, § 1er,1°, A, f), de la même loi, tel que modifié par l’article 3 du présent arrêté, au plus tard en date du 1er mai 2015.

Art. 12. Le ministre qui a l’Economie et les Consommateurs dans ses attributions et le ministre qui a les Finances dans ses attributions sont chargés, chacun en ce qui le concerne, de l’exécution du présent arrêté.

Donné à Bruxelles, le 21 février 2014.

PHILIPPE

Par le Roi :

Le Vice-Premier Ministre et Ministre de l’Economie et des Consommateurs, J. VANDE LANOTTE

Le Ministre des Finances,
K. GEENS

SERVICE PUBLIC FEDERAL ECONOMIE,
P.M.E., CLASSES MOYENNES ET ENERGIE
ET SERVICE PUBLIC FEDERAL FINANCES

[C − 2014/11142]

21 FEVRIER 2014. — Arrêté royal relatif aux modalités d’application au secteur des assurances des articles 27 à 28bis de la loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers

RAPPORT AU ROI

Sire,

L’arrêté royal soumis à Votre signature porte exécution de l’article 26, alinéas 3 et 4, de la loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers, tel que modifié par l’article 19 de la loi du 30 juillet 2013 visant à renforcer la protection des utilisateurs de produits et services financiers ainsi que les compétences de l’Autorité des services et marchés financiers, et portant des dispositions diverses (I). Il porte également exécution de l’article 12sexies, § 1er, alinéa 2, de la loi du 27 mars 1995 relative à l’intermédiation en assurances et en réassurances et à la distribution d’assurances, tel qu’inséré par l’article 7 de la loi du 30 juillet 2013 précitée.

I. Considérations générales

La loi du 30 juillet 2013 visant à renforcer la protection des utilisateurs de produits et services financiers ainsi que les compétences de l’Autorité des services et marchés financiers, et portant des dispositions diverses (I) s’inscrit dans le prolongement de la réforme dont l’architecture de contrôle du secteur financier belge a fait l’objet, passant d’un modèle de contrôle intégré vers un modèle bipolaire, dit "Twin Peaks". Les modifications que cette loi apporte à la législation existante poursuivent principalement deux objectifs. Le premier consiste à améliorer le cadre juridique existant afin d’accroître l’efficacité du contrôle et de permettre une meilleure protection des utilisateurs de produits et services financiers. Le second objectif poursuivi par cette loi tend à accroître la cohérence transversale des règles visant à assurer la protection des utilisateurs de produits et de services financiers.

Dans le cadre de ce second objectif, la loi susvisée introduit plusieurs dispositions modificatives de la législation existante, notamment de la loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers. En particulier, l’article 19 de la loi du 30 juillet 2013 insère un nouvel alinéa, entre les alinéas 1er et 2 de l’article 26 de la loi du 2 août 2002 en vertu duquel les entreprises d’assurances sont, à dater du 30 avril 2014, et pour ce qui est de leurs transactions effectuées sur le territoire belge, soumises aux règles de conduite prévues par et en vertu des articles 27, 28 et 28bis de la loi du 2 août 2002 précitée.

L’article 26, alinéa 3, de la loi du 2 août 2002 telle que modifiée prévoit que le Roi peut, par arrêté délibéré en Conseil des Ministres, pris sur avis de la FSMA, déclarer les règles de conduite prévues par et en vertu des articles 27, 28 et 28bis en tout ou en partie non applicables aux entreprises d’assurances, afin de faire en sorte que seuls les types d’assurances que le Roi détermine soient soumis à ces règles ou, de manière plus générale, de prendre en considération le fait que des contrats d’assurance sont proposés aux clients. En outre, l’alinéa 4 du 20144 BELGISCH STAATSBLAD — 07.03.2014 − Ed. 2 — MONITEUR BELGE

même article autorise le Roi, dans les mêmes conditions, à prévoir pour les entreprises d’assurances une version adaptée de certaines de ces règles de conduite, afin d’en préciser le champ d’application et la portée pour les entreprises d’assurances et, plus généralement, de prendre en considération le fait que des contrats d’assurance sont proposés aux clients. Il est précisé que les arrêtés pris en exécution de ces habilitations sont abrogés de plein droit s’ils ne sont pas confirmés par une loi dans les douze mois qui suivent leur publication au Moniteur belge, à l’exception toutefois des dérogations aux règles de conduite qui ne sont pas prévues par les articles 27, 28 et 28bis de la loi, mais en vertu de ces articles.

L’approche proposée dans le présent projet d’arrêté définit le vocable "prestataire de services" comme visant à la fois une entreprise d’assurances sensu lato et un intermédiaire d’assurances autre qu’un agent d’assurances lié. A noter que pour les besoins du présent arrêté, les agents d’assurances liés (c’est-à-dire les agents d’assurances qui, en vertu d’une ou plusieurs convention(s) ou procuration(s), ne peuvent agir au nom et pour le compte que d’une ou de plusieurs entreprise(s) d’assurances, si les contrats proposés dans ce cadre n’entrent pas en concurrence entre eux, et sous la responsabilité de celle(s)-ci pour les contrats d’assurance qui les concernent respectivement) sont assimilés à l’entreprise d’assurances au nom et pour compte de laquelle ils agissent. La même logique est suivie en ce qui concerne les sous-agents d’assurances dans le cadre de leurs rapports avec les intermédiaires d’assurances pour compte desquels ils agissent : ces sous-agents sont assimilés à l’intermédiaire d’assurances au nom et pour le compte duquel ils agissent (et ceci tant en ce qui concerne les sous-agents d’assurances d’agents d’assurances liés que les sous-agents d’assurances d’autres types d’intermédiaires d’assurances). Ceci ne signifie nullement que les agents d’assurances liés et/ou les sous-agents d’assurances ne sont pas tenus d’appliquer les règles de conduite visées par le présent arrêté, ni qu’ils ne peuvent, par exemple, fournir du conseil portant sur une assurance d’épargne ou d’investissement. L’approche suivie entend préciser que, dans le cadre de l’application des règles de conduite, ces agents d’assurances liés et ces sous-agents d’assurances devront appliquer les procédures et politiques définies respectivement par l’entreprise d’assurances ou l’intermédiaire d’assurances pour le compte de laquelle/duquel ils agissent et faire usage de la documentation émise par ces entreprises ou intermédiaires d’assurances, qui restent entièrement et inconditionnellement responsables de leurs actes.

Dans la mesure où, en vertu de la lecture combinée des articles 26, alinea 2, de la loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers et 12sexies de la loi du 27 mars 1995 relative à l’intermédiation en assurances et en réassurances et à la distribution d’assurances, les règles visées par et en vertu des articles 27, 28 et 28bis de la loi du 2 août 2002 précitée sont rendus applicables aux entreprises d’assurances et aux intermédiaires d’assurances à dater du 30 avril 2014, le présent projet, faisant usage des habilitations précitées, apporte des précisions concernant la manière dont ces dispositions doivent être appliquées aux entreprises d’assurances et aux intermédiaires d’assurances et/ou précise quelles dispositions ne leur sont pas applicables.

L’arrêté royal soumis à Votre signature vise donc à mettre en œuvre les habilitations figurant à l’article 26, alinéas 3 et 4, de la loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers en précisant le champ d’application et la portée des règles de conduite visées aux articles 27, 28 et 28bis de la loi du 2 août 2002 pour les entreprises d’assurances.

Les règles énoncées par l’arrêté royal soumis à Votre signature sont également applicables aux intermédiaires d’assurances dans la mesure où ces derniers doivent, en vertu de l’article 12sexies, § 1er, de la loi du 27 mars 1995 relative à l’intermédiation en assurances et en réassurances et à la distribution d’assurances, respecter les règles de conduite applicables aux entreprises d’assurances.

BELGISCH STAATSBLAD — 07.03.2014 − Ed. 2 — MONITEUR BELGE 20145

II. Commentary on the Articles

Article 1

Article 1 of the draft decree contains a number of definitions proposed for the application of this decree. These include in particular the definitions of:

"insurance intermediation service": this concept covers all activities covered by the definition of insurance intermediation within the meaning of Article 1, 1°, of the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance, regardless of whether those activities are carried out by an insurance intermediary or by an insurance company without the intervention of an insurance intermediary;
"insurance undertaking sensu lato": this concept refers both to insurance undertakings and to their linked insurance agents and to the sub-agents of those linked insurance agents. In this regard, it must be emphasized that these different persons (the insurance undertaking, its linked insurance agents, and the sub-agents of those linked insurance agents) must, when providing insurance intermediation services to a client, naturally comply with all obligations laid down in this draft decree;
"advice on savings or investment insurance": the definition of this concept is based on the definition of "investment advice" within the meaning of Article 46, 9°, of the Law of 6 April 1995 on the status and supervision of investment firms. However, in that definition, the concept of "financial instrument" is replaced by the concept of "savings or investment insurance". This definition, which is based on the definition of "investment service", can be explained by the fact that savings or investment insurance contracts are contracts that resemble financial instruments;
"savings insurance": this concept covers any life insurance contract which either (i) relates to branches 21, 22 or 26 within the meaning of the Royal Decree of 22 February 1991 on the general regulation concerning the supervision of insurance undertakings, and which includes a savings component (either an insurance contract as referred to in points I, II or VI of Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or of Annex II to 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) which includes a savings component), or (ii) forms a combination of several of the contracts referred to in (i). Within the framework of this definition, the savings component is a decisive element for the qualification of a contract as savings insurance. Life insurance contracts which, although they relate to branches 21, 22 or 26, do not include a savings component, such as for example credit balance insurance or funeral insurance, which are treated as insurance other than savings or investment insurance, are therefore excluded from the scope of the definition;
"investment insurance": this concept covers life insurance contracts (i) which relate to branch 23 (or an insurance contract as referred to in point III of Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or of Annex II to 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)) or (ii) form a combination of insurance contracts relating to that branch and/or savings insurance.

Regarding the concept of "linked insurance agent", and more particularly the issue of liability for the activities carried out by this agent, reference should also be made to the new Article 12quater of the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance, as referred to in Article 10 of the Royal Decree amending that law. This article indeed concerns the liability regime of insurance undertakings towards their linked insurance agents.

Finally, several of the definitions used in this draft Royal Decree (such as the definition of "linked insurance agent") originate in the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance. For further clarification on those definitions, reference is therefore made to the Report to the King on the Royal Decree amending that law.

Article 2

This provision states that the conduct rules determined by Articles 27, 28 and 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services do not apply to transactions carried out by service providers which relate to one or more life insurance contracts concluded within the framework of the 1st or 2nd pension pillar. This exclusion is provided for in order to allow for parallelism with the relevant work at European level (IMD II and PRIPs), on the basis of which priority is given in a first phase to other types of insurance contracts (in particular those directly replaceable by financial instruments, namely savings or investment insurance). In a subsequent phase, an extension of the conduct rules determined by and pursuant to Articles 27, 28 and 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services could be considered, within the framework of a general exercise dedicated to those products. This extension could be implemented on the basis of the authorization granted to You by the third and fourth paragraphs of Article 26 of the Law of 2 August 2002. Reference could indeed be made to those provisions to declare the aforementioned conduct rules applicable in whole or in part to life insurance contracts falling under the 2nd pillar, as well as, where appropriate, to clarify the scope and extent of those rules when such contracts are offered to clients. It is assumed that this exercise can be started shortly after the entry into force of this decree.

Article 3

For reasons of coherence, this provision specifies that the conduct rules determined by Articles 27, 28 and 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services do not apply to activities carried out by service providers who are otherwise excluded from the scope of the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance by its Article 2, § 2.

Article 4

Article 4 - which does not apply to service providers in the cases referred to in Articles 2 and 3 of this draft Royal Decree - defines the limits within which Article 27 of the Law of 2 August 2002 applies to service providers.

The provision under 1° clarifies how paragraph 1 of Article 27 should be read with a view to its application to service providers. It also indicates which paragraphs of Article 27 of the Law of 2 August 2002 apply to insurance undertakings and insurance intermediaries, i.e. paragraphs 2 to 5, 7 and 8, 11 and 12.

The provision under 2° clarifies that paragraph 2bis of Article 27 does not apply to insurance undertakings and insurance intermediaries.

The provision under 3° clarifies the manner in which paragraphs 3, 4 and 5 of Article 27 should be read in light of their application to insurance undertakings and insurance intermediaries.

The changes made in paragraph 3 are essentially of a terminological nature. The intention of the second dash of paragraph 3 is to cover insurance contracts other than savings or investment insurance. In Articles 11 to 13 of the Royal Decree of 3 June 2007 laying down detailed rules for the transposition of the directive concerning markets for financial instruments, as further specified by the Royal Decree of 21 February 2014 on the conduct rules and rules on the management of conflicts of interest established by law, as far as the insurance sector is concerned, it is indicated what is precisely meant by "appropriate" information within the meaning of the present paragraph.

The changes made in paragraphs 4 and 5 are also essentially of a terminological nature. Furthermore, the reference made in those paragraphs to both savings or investment insurance and insurance intermediation services aims to create parallelism with the similar provisions in the draft revision of the insurance intermediation directive (IMD II). Furthermore, those paragraphs, which respectively deal with the service provider's examination of the suitability of the service offered or contract recommended to a specific client ("suitability test") and the examination of the appropriateness of the service or contract offered to or requested by a specific client ("appropriateness test"),

II. Commentary on the Articles

Article 1

Article 1 of the draft decree sets out a number of definitions proposed for the application of this decree. In this context, the following concepts are defined in particular:

"insurance intermediation service": this concept covers any activity covered by the definition of insurance intermediation within the meaning of Article 1, 1°, of the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance, and whether the activity is carried out by an insurance intermediary or by an insurance company without the intervention of an insurance intermediary;
the concept of "insurance undertaking sensu lato" covers both insurance undertakings and their linked insurance agents and the sub-agents of those linked insurance agents. It should be emphasized in this regard that these different persons (the insurance undertaking, its linked insurance agents and the sub-agents of its linked insurance agents) must, in the context of providing insurance intermediation services to a client, naturally comply with all the obligations set out in this draft decree;
the definition of "advice on savings or investment insurance" is inspired by that of "investment advice" within the meaning of Article 46, 9°, of the Law of 6 April 1995 on the status and supervision of investment firms. The notion of financial instrument is however replaced by that of savings or investment insurance. This definition is retained because savings or investment insurance contracts are contracts that present similarities with financial instruments;
the concept of "savings insurance" covers any life insurance contract which (i) either falls under branches 21, 22 or 26 within the meaning of the Royal Decree of 22 February 1991 on the general regulation concerning the supervision of insurance undertakings and which includes a savings component (either constitutes an insurance contract referred to in points I, II or VI of Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or of Annex II to Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the access to the activity of insurance and reinsurance and their exercise (solvency II) which includes a savings component) or (ii) constitutes a combination of several contracts referred to in (i). Within the framework of this definition, the savings component constitutes a decisive element for the qualification of a contract as savings insurance. Life insurance contracts which, although they fall under branches 21, 22 or 26, do not include a savings component, such as for example remaining balance insurance or funeral expense insurance, which are treated as insurance other than savings or investment insurance, are therefore excluded from this definition;
the concept of "investment insurance" covers (i) life insurance contracts falling under branch 23 (or an insurance contract referred to in point III of Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or of Annex II to Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the access to the activity of insurance and reinsurance and their exercise (solvency II)) or (ii) a combination of insurance contracts falling under this branch and/or savings insurance.

Furthermore, regarding the concept of "linked insurance agent" and more particularly the question of liability for the activity carried out by this agent, reference must be made to the new Article 12quater of the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance as referred to in Article 10 of the Royal Decree amending that law. This article indeed concerns the liability regime of insurance undertakings towards their linked insurance agents.

Finally, several of the definitions appearing in this draft Royal Decree (such as that of "linked insurance agent") find their origin in the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance. Reference is therefore made to the Report to the King on the Royal Decree amending that law for more explanations regarding these definitions.

Article 2

This provision states that the conduct rules referred to in Articles 27, 28 and 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services are not applicable to transactions carried out by service providers when they concern one or more life insurance contract(s) concluded within the framework of the 1st or 2nd pension pillar. This exclusion is provided for to allow parallelism with European work in this area (IMD II and PRIPs), pursuant to which priority is given in a first phase to other types of insurance contracts (in particular those directly replaceable by financial instruments, namely savings or investment insurance). An extension of the conduct rules referred to in and pursuant to Articles 27, 28 and 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services could be envisaged in a second phase, within the framework of a global reflection on these products. This extension could be carried out on the basis of the authorization conferred upon You by paragraphs 3 and 4 of Article 26 of the Law of 2 August 2002. These provisions could in particular be invoked to declare, in whole or in part, the aforementioned conduct rules applicable to life insurance contracts falling under the 2nd pension pillar as well as to clarify, where appropriate, the scope and extent of these rules when such contracts are offered to clients. It is planned that this reflection be carried out shortly after the entry into force of this decree.

Article 3

This provision specifies, for reasons of coherence, that the conduct rules referred to in Articles 27, 28 and 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services are not applicable to activities carried out by service providers who are otherwise excluded from the scope of the Law of 27 March 1995 on insurance and reinsurance intermediation and the distribution of insurance by its Article 2, § 2.

Article 4

Article 4 - which does not apply to service providers in the cases referred to in Articles 2 and 3 of this draft Royal Decree - intends to specify the limits within which Article 27 of the Law of 2 August 2002 applies to service providers.

Point 1 clarifies how paragraph 1 of Article 27 should be read for its application to service providers. It also indicates the paragraphs of Article 27 of the Law of 2 August 2002 which are made applicable to insurance undertakings and insurance intermediaries, namely paragraphs 2 to 5, 7 and 8, 11 and 12.

Point 2 specifies that paragraph 2bis of Article 27 is not made applicable to insurance undertakings and insurance intermediaries.

Point 3 specifies the manner in which paragraphs 3, 4 and 5 of Article 27 should be read for their application to insurance undertakings and insurance intermediaries.

The modifications made to paragraph 3 are essentially of a terminological nature. The second dash of paragraph 3 is proposed to cover insurance contracts other than savings or investment insurance. Articles 11 to 13 of the Royal Decree of 3 June 2007 laying down the rules and procedures aimed at transposing the directive concerning markets for financial instruments, as specified by the Royal Decree of 21 February 2014 on conduct rules and rules on the management of conflicts of interest established by law, as far as the insurance sector is concerned, specify what constitutes "appropriate" information within the meaning of the present paragraph.

The modifications made to paragraphs 4 and 5 are essentially of a terminological nature. In this regard, the reference made in these paragraphs not only to savings or investment insurance but also to insurance intermediation services aims to ensure parallelism with the equivalent provisions appearing in the draft revision of the directive on insurance intermediation (IMD II). Furthermore, these paragraphs, which concern respectively the examination by the service provider of the adequacy of the service proposed or the contract recommended to a specific client ("suitability test") and the examination of the appropriateness of the service or contract proposed to or requested by a specific client ("appropriateness test"),

BELGISCH STAATSBLAD — 07.03.2014 − Ed. 2 — MONITEUR BELGE

requested service or agreement ("appropriateness test"), exclusively applicable to savings or investment insurance policies, taking into account the fact that only these types of insurance agreements resemble financial instruments. Consequently, when an insurance company or insurance intermediary provides advice regarding such an agreement, a "suitability test" must be performed beforehand in accordance with paragraph 4 of the aforementioned Article 27. When the insurance mediation service provided by an insurance company or insurance intermediary regarding such an agreement does not imply that advice is provided, the insurance company or insurance intermediary must perform an "appropriateness test" beforehand in accordance with paragraph 5 of the aforementioned Article 27. Both the "suitability test" and the "appropriateness test" require the service provider to gather various information about the client in question. Each company is free to organize itself as it sees fit for the collection of this information. Thus, this information may be collected in a standardized manner, for example by using standard questionnaires for all clients (questionnaires that may, if necessary, be drawn up by the relevant professional associations). However, this standardization of collecting information about the client must not result in the "suitability test" or the "appropriateness test" no longer taking into account the specific characteristics of a client. The service provider must in any case offer the client a savings or investment insurance policy that is suitable (in the case of advice) or appropriate for them. If the service provided concerns an insurance agreement other than a savings or investment insurance policy, the insurance company or insurance intermediary must comply not with paragraphs 4 or 5 of the aforementioned Article 27, but solely with the requirements of Article 12bis, § 3, of the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance, as amended by the Royal Decree of 21 February 2014 amending the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance.

The provision under 4° clarifies that paragraph 6 of Article 27 is not applicable to insurance companies and insurance intermediaries.

The provision under 5° clarifies how paragraph 7, first paragraph, should be read in view of its application to insurance companies and insurance intermediaries. In this regard, it is pointed out that the composition of the file (as referred to in this paragraph 7) regarding the rights and obligations of the parties and other conditions for the provision of insurance mediation services does not necessarily imply the obligation to conclude a specific agreement for the provision of an insurance mediation service. The rights and obligations of the parties may be incorporated by reference to other documents or legal texts.

The provision under 6° states that the second and third paragraphs of paragraph 7 of the aforementioned Article 27 are not applicable to insurance companies and insurance intermediaries.

The provision under 7° clarifies how the fourth paragraph of paragraph 7 of Article 27 should be read in light of its application to insurance companies and insurance intermediaries.

The provision under 8° clarifies how paragraph 8 of Article 27 regarding the delivery of reports to clients applies to insurance companies and insurance intermediaries. This provision authorizes the FSMA to determine by regulation what constitutes a "proper" report within the meaning of this provision.

The provision under 9° clarifies that paragraphs 9 and 10 of Article 27 are not applicable to insurance companies and insurance intermediaries.

The provision under 10° clarifies the scope of the authorization to the King mentioned in paragraph 11 of the aforementioned Article 27 in the context of the application of the so-called "MiFID" conduct rules to insurance companies and insurance intermediaries.

Article 5.
Article 5 of the draft decree - which is not applicable to service providers in the cases referred to in Articles 2 and 3 of this draft Royal Decree - clarifies that Articles 28 and 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services are not applicable to insurance companies and insurance intermediaries.
Article 28 deals with the principle of best execution of client orders. It would make no sense to extend this set of rules to the insurance sector, which is why the draft decree proposes to declare this article inapplicable to insurance companies and insurance intermediaries.
Article 28bis, § 1, in turn, provides for the obligation for regulated companies to act in a loyal, fair, and professional manner and in a way that promotes market integrity. This obligation must be distinguished from the obligation referred to in Article 26, second paragraph, of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services, which applies to insurance companies and insurance intermediaries, and under which insurance companies and insurance intermediaries must act in a loyal, fair, and professional manner in the interests of their clients. The obligation referred to in Article 28bis, § 1, concerns market integrity, a concept whose extension to insurance companies and insurance intermediaries seems to make no sense.
The application of paragraph 2 of Article 28bis of the Law of 2 August 2002 to insurance companies and, indirectly, to insurance intermediaries is inconceivable in that the relevant provision obliges regulated companies to settle their transactions in fungible financial instruments admitted to trading on a Belgian regulated market through book-entry transfer.

Article 6.
This article regulates the entry into force of this decree. It also states that the obligations arising from the draft decree are applicable solely to transactions performed or occurring from 30 April 2014. In this regard, "transactions" means all operations related to an insurance agreement, such as, for example, subscribing to such an agreement, making a change to the coverage provided by such an agreement, or changing the constituent elements of such an agreement that have an influence on the needs and requirements of the client. An indexation of an insurance premium, on the other hand, is not considered a "transaction". This, Your Majesty, is the scope of the decree submitted to you. We have the honor to be, Your Majesty, Your Majesty's most respectful and faithful servants, The Deputy Prime Minister and Minister of Economy and Consumers, J. VANDE LANOTTE The Minister of Finance, K. GEENS

COUNCIL OF STATE
Legislation Section
Opinion 54.373/1 of 17 January 2014 on a draft Royal Decree 'on the rules for the application of Articles 27 to 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services to the insurance sector'

On 25 October 2013, the Council of State, Legislation Section, was requested by the Minister of Economy and Consumers to provide an opinion within a period of thirty days, extended to 17 January 2014, on a draft Royal Decree 'on the rules for the application of Articles 27 to 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services to the insurance sector'.

Article 5.
Article 5 of the draft - which does not apply to service providers in the cases referred to in Articles 2 and 3 of this draft Royal Decree - clarifies that Articles 28 and 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services are not made applicable to insurance companies and insurance intermediaries.
Article 28 relates to the principle of best execution when executing client orders. The extension of this body of rules to the insurance sector would make no sense, which is why the draft proposes to declare this article inapplicable to insurance companies and insurance intermediaries.
Article 28bis, § 1, for its part, provides for the obligation for regulated companies to exercise their activity in an honest, fair, and professional manner and to act in a way promoting market integrity. This obligation is distinguished from that stated in Article 26, paragraph 2, of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services, which is made applicable to insurance companies and insurance intermediaries and states that insurance companies and insurance intermediaries must act in an honest, fair, and professional manner serving the interests of their clients. The obligation stated in Article 28bis, § 1, concerns market integrity, a concept whose extension to insurance companies and insurance intermediaries does not appear to make sense.
The application of paragraph 2 of Article 28bis of the Law of 2 August 2002 to insurance companies and, indirectly, to insurance intermediaries is not conceivable in that this provision constrains regulated companies to settle between themselves by book-entry transfer their transactions involving fungible financial instruments admitted to trading on a Belgian regulated market.

Article 6.
This article regulates the entry into force of this decree. It also clarifies that the obligations arising from the draft decree are applicable only to transactions performed or occurring as of 30 April 2014. In this regard, "transactions" refers to all operations related to an insurance contract, such as, for example, the subscription of such a contract, a modification made to the coverage provided by such a contract, or concerning constituent elements of such a contract that have an influence on the needs and requirements of the client. An indexation of an insurance premium, on the other hand, does not constitute a transaction. Such is, Your Majesty, the scope of the decree submitted to you. We have the honor to be, Your Majesty, Your Majesty's most respectful and most faithful servants, The Deputy Prime Minister and Minister of Economy and Consumers, J. VANDE LANOTTE The Minister of Finance, K. GEENS

COUNCIL OF STATE
Legislation Section
Opinion 54.373/1 of 17 January 2014 on a draft Royal Decree 'on the application modalities to the insurance sector of Articles 27 to 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services'

On 25 October 2013, the Council of State, Legislation Section, was invited by the Minister of Economy and Consumers to communicate an opinion, within a period of thirty days, extended to 17 January 2014, on a draft Royal Decree 'on the application modalities to the insurance sector of Articles 27 to 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services'.

The draft was examined by the First Chamber on 9 January 2014.
The Chamber was composed of Marnix VAN DAMME, Chamber President, Wilfried VAN VAERENBERGH and Wouter PAS, State Councillors, Marc RIGAUX and Michel TISON, Assessors, and Marleen VERSCHRAEGHEN, Acting Clerk.
The report was presented by Paul DEPUYDT, First Auditor Section Head.
The concordance between the French and Dutch versions of the opinion was verified under the supervision of Marnix VAN DAMME, Chamber President.
The opinion, the text of which follows, was given on 17 January 2014.

In accordance with Article 84, § 3, first paragraph, of the coordinated laws on the Council of State, the Legislation Section has essentially limited itself to examining the competence of the author of the act, the legal basis, as well as whether the prescribed formal requirements have been met.

SCOPE AND LEGAL BASIS OF THE DRAFT

The draft Royal Decree submitted for opinion aims to clarify the scope and extent of the code of conduct rules referred to in Articles 27, 28 and 28bis of the Law of 2 August 2002 'on the supervision of the financial sector and financial services', as regards insurance undertakings. This clarification implies that the aforementioned code of conduct rules are declared wholly or partially inapplicable or that their wording is adapted to insurance undertakings. To the extent that insurance intermediaries are required to comply with the code of conduct rules applicable to insurance undertakings, the proposed regulation also applies to them.

3.1. Regarding the clarification of the relevant code of conduct rules with regard to insurance undertakings, the draft can be considered to find its legal basis in Article 26, third and fourth paragraphs, of the aforementioned Law of 2 August 2002, which reads:
"The King may, by a decree deliberated in the Council of Ministers and taken on the advice of the FSMA, declare the code of conduct rules determined by and pursuant to Articles 27, 28 and 28bis wholly or partially inapplicable to insurance undertakings, to ensure that only the types of insurance determined by Him are subject to these rules or more generally to take into account the fact that insurance contracts are offered. The King may furthermore, by a decree established after deliberation in the Council of Ministers and taken on the advice of the FSMA, provide for insurance undertakings with an adapted version of certain of these code of conduct rules, to further determine the scope and extent of these rules for insurance undertakings and more generally to take into account the fact that insurance contracts are offered. Decrees taken under these powers are automatically repealed if they are not ratified by law within twelve months of their publication in the Belgian State Gazette. The preceding sentence does not apply to deviations from the code of conduct rules not determined by but pursuant to Articles 27, 28 and 28bis."

3.2. Regarding the application of the proposed regulation to insurance intermediaries, a legal basis can be found in Article 12sexies, § 1, second paragraph, of the Law of 27 March 1995 'on insurance and reinsurance intermediation and the distribution of insurance', which reads:
"Insurance intermediaries must, in their intermediation activity, comply with the code of conduct rules applicable to insurance undertakings. The King may, by a decree established after deliberation in the Council of Ministers and taken on the advice of the FSMA, provide for all or certain categories of insurance intermediaries with an adapted version of these code of conduct rules or declare certain of these rules wholly or partially inapplicable, to take into account the specificity of their role."

GENERAL OBSERVATIONS

The draft Royal Decree submitted for opinion regulates the application of code of conduct rules determined by law, more specifically those contained in Articles 27 to 28bis of the aforementioned Law of 2 August 2002, or provides for an adapted wording thereof, as regards insurance undertakings. The draft must be read in conjunction with the draft Royal Decree 'on code of conduct rules and rules on the management of conflicts of interest', regarding which the Council of State, Legislation Section, issues opinion 54.374/1. The latter draft Royal Decree aims to regulate, for insurance undertakings and insurance intermediaries, the application of the code of conduct rules which, "pursuant to" Articles 27 to 28bis of the Law of 2 August 2002, were established for investment firms and credit institutions in the Royal Decree of 3 June 2007 'determining further rules for the implementation of the directive concerning markets for financial instruments', for insurance undertakings and insurance intermediaries.

It is recommended to carry through this distinction in a consistent manner for the sake of legal certainty, especially since only the adaptation of the code of conduct rules "determined" by law for insurance undertakings must subsequently be the subject of legal ratification. This distinction has not been carried through for Articles 2 and 3 of the present draft Royal Decree. The non-applicability contained in these provisions should therefore be limited to code of conduct rules determined "by" Articles 27, 28 and 28bis of the Law of 2 August 2002. The regulation concerning the (non-)applicability of the code of conduct rules established "pursuant to" these articles of law can then be integrated into the aforementioned draft Royal Decree regarding which opinion 54.374/1 is issued.

Article 4 of the draft describes what is understood by certain terms for the application of the proposed Royal Decree. Some of these terms are already described or used in the law that serves as the legal basis for the proposed regulation, albeit in a different meaning. This is the case, for example, for the notion of "regulated undertaking" (Article 4, 5°, of the draft), which is already described in Article 26, sixth paragraph, of the Law of 2 August 2002. Likewise, the definition of "insurance undertaking" in Article 4, 8°, of the draft, includes affiliated insurance agents and sub-agents, whereas this is not the case for the notion of "insurance undertaking" within the meaning of Article 26 of the Law of 2 August 2002.
The use of identical terms with different meanings in the law and in decrees taken to implement the law is of a nature to cause uncertainty regarding the precise scope of the legal regulation and its implementing decrees, and should therefore be avoided for the sake of legal certainty.

EXAMINATION OF THE TEXT

PREAMBLE

Taking into account what was noted under 3.1 regarding the legal basis, one should write at the end of the first paragraph of the preamble of the draft: "... and financial services, Article 26, third and fourth paragraphs, inserted by the Law of 30 July 2013;".
The Law of 30 July 2013 does not serve as the legal basis for the proposed regulation. The second paragraph of the preamble of the draft, which refers to Articles 7 and 19 of that law, should therefore be omitted.
The third paragraph of the preamble refers to Article 12sexies, § 1, of the Law of 27 March 1995. That paragraph should, taking into account the date of the law in question, precede the paragraph of the preamble which refers to Article 26, third and fourth paragraphs, of the Law of 2 August 2002. At the end of the first-mentioned paragraph of the preamble, it must also be written "... of insurance, Article 12sexies, § 1, second paragraph, inserted by the Law of 30 July 2013;".
In order to show that the formal requirement referred to in Article 19/1, § 1, of the Law of 5 May 1997 'on the coordination of federal policy on sustainable development' has been complied with, a new paragraph should be inserted in the preamble after the paragraph referring to the agreement of the Minister of Budget, reading:
"Having regard to the prior examination regarding the necessity to carry out a sustainable development impact assessment, concluding that an impact assessment is not required;".

DISPOSITION

Article 1

In the disposition of a normative text, only legal rules belong. Article 1 of the draft does not meet this requirement because that article only mentions which legal provisions the proposed Royal Decree intends to implement. Those legal provisions are, however, already referred to in the preamble of the draft. Article 1 should therefore be omitted from the disposition.

In application of Article 84, § 3, first paragraph, of the coordinated laws on the Council of State, the Legislation Section has essentially limited itself to examining the competence of the author of the act, the legal basis and the fulfillment of the prescribed formalities.

SCOPE AND LEGAL BASIS OF THE PROJECT

The draft Royal Decree submitted for opinion has as its object to clarify the scope and extent of the code of conduct rules referred to in Articles 27, 28 and 28bis of the Law of 2 August 2002 'on the supervision of the financial sector and financial services', as regards insurance companies. These clarifications imply that the aforementioned code of conduct rules are declared wholly or partially inapplicable or that their wording is adapted according to insurance companies. To the extent that insurance intermediaries are required to respect the code of conduct rules applicable to insurance companies, the regulation in project also applies to them.

3.1. Regarding the clarification of said code of conduct rules towards insurance companies, the project can be deemed to find a legal basis in Article 26, paragraphs 3 and 4, of the aforementioned Law of 2 August 2002, which states as follows:
"The King may, by a decree deliberated in the Council of Ministers, taken on the advice of the FSMA, declare the code of conduct rules provided by and pursuant to Articles 27, 28 and 28bis wholly or partially inapplicable to insurance companies, in order to ensure that only the types of insurance that He determines are subject to these rules or, more generally, to take into account the fact that insurance contracts are offered to clients. The King may furthermore, by a decree deliberated in the Council of Ministers, taken on the advice of the FSMA, provide for insurance companies an adapted version of certain of these code of conduct rules, in order to clarify the scope and extent of these rules for insurance companies and, more generally, to take into account the fact that insurance contracts are offered to clients. The decrees taken under these authorizations are repealed by operation of law if they have not been confirmed by law within twelve months following their publication in the Belgian State Gazette. The previous sentence does not apply to the derogations from the code of conduct rules which are not provided by Articles 27, 28 and 28bis, but pursuant to these articles."

3.2. Regarding the application of the regulation in project to insurance intermediaries, a legal basis can be found in Article 12sexies, § 1, first paragraph, second paragraph, of the Law of 27 March 1995 'on insurance and reinsurance intermediation and the distribution of insurance', which states as follows:
"Insurance intermediaries must, in their intermediation activity, respect the code of conduct rules applicable to insurance companies. By a decree deliberated in the Council of Ministers, taken on the advice of the FSMA, the King may, for all categories of insurance intermediaries or certain of them, provide an adapted version of these code of conduct rules or declare certain of these rules wholly or partially inapplicable, in order to take into account the particularities of their role."

GENERAL OBSERVATIONS

The draft Royal Decree submitted for opinion regulates the application of code of conduct rules fixed by law, in particular those inscribed in Articles 27 to 28bis of the aforementioned Law of 2 August 2002, or adapts their wording, towards insurance companies. The project must be read jointly with the draft Royal Decree 'on code of conduct rules and rules on the management of conflicts of interest', on which the Council of State, Legislation Section, issues opinion 54.374/1. This latter draft Royal Decree aims to regulate, for insurance companies and insurance intermediaries, the application of the code of conduct rules which, "pursuant to" Articles 27 to 28bis of the Law of 2 August 2002, were fixed for investment companies and credit institutions in the Royal Decree of 3 June 2007 'carrying the rules and modalities aiming to transpose the directive concerning markets for financial instruments', for insurance companies and insurance intermediaries.

For the sake of legal certainty, it is recommended to apply this distinction in a consistent manner, all the more so since only the adaptation of the code of conduct rules fixed "by" the law towards insurance companies must subsequently be the object of legal confirmation. This distinction has not been made for Articles 2 and 3 of the draft Royal Decree under examination. It would therefore be better to limit the non-applicability provided by these provisions to the code of conduct rules fixed "by" Articles 27, 28 and 28bis of the Law of 2 August 2002. One can therefore integrate the device relating to the (non-)applicability of the code of conduct rules fixed "pursuant to" these articles of law into the aforementioned draft Royal Decree on which opinion 54.374/1 is issued.

Article 4 of the draft defines what is understood by certain notions for the application of the draft Royal Decree. Some of these notions are already defined or used, albeit in another sense, in the law that also provides a legal basis for the regulation in project. This is notably the case for the notion of "regulated undertaking" (Article 4, 5°, of the draft), already defined in Article 26, paragraph 6, of the Law of 2 August 2002. Similarly, the definition of "insurance company" inscribed in Article 4, 8°, of the draft, includes affiliated insurance agents and sub-agents of insurance, whereas this is not the case for the notion of "insurance company" within the meaning of Article 26 of the Law of 2 August 2002.
The use of identical notions having a different scope in the law and in decrees taken in execution of it is of a nature to sow confusion concerning the precise scope of the legal regulation and its implementing decrees, and must therefore be avoided in the interest of legal certainty.

EXAMINATION OF THE TEXT

PREAMBLE

Taking into account the observation formulated in point 3.1 regarding the legal basis, one will write at the end of the first paragraph of the preamble of the draft: "... and to financial services, Article 26, paragraphs 3 and 4, inserted by the Law of 30 July 2013 ;".
The Law of 30 July 2013 does not provide a legal basis for the regulation in project. Consequently, it is appropriate to omit the second paragraph of the preamble of the draft, referring to Articles 7 and 19 of this law.
The third paragraph of the preamble aims at Article 12sexies, § 1, of the Law of 27 March 1995. Given the date of the law concerned, this paragraph must precede the paragraph of the preamble referring to Article 26, paragraphs 3 and 4, of the Law of 2 August 2002. Furthermore, it is appropriate to write at the end of the first cited paragraph of the preamble "... of insurance, Article 12sexies, § 1, paragraph 2, inserted by the Law of 30 July 2013 ;".
In order to show that the formality referred to in Article 19/1, § 1, of the Law of 5 May 1997 'on the coordination of federal policy on sustainable development' has been respected, it is necessary to insert in the preamble, after the paragraph aiming at the agreement of the Minister of Budget, a new paragraph written as follows:
"Having regard to the prior examination of the necessity to carry out an impact assessment on sustainable development, concluding that an impact assessment is not required ;".

DISPOSITION

Article 1

Only norms have their place in the disposition of a normative text. Article 1 of the draft does not meet this requirement given that it only mentions the legal provisions that the draft Royal Decree aims to implement. The preamble of the draft does, however, already refer to these legal provisions. It would therefore be better to omit Article 1 of the disposition.

Article 2
11. The intention underlying the enabling provision in Article 2, second paragraph, of the draft is clarified in the report to the King. This intention can, however, be realized on the basis of the powers already contained in Article 26, third and fourth paragraphs, of the Law of 2 August 2002. It is therefore superfluous – and indeed not recommended – to repeat the relevant statutory enabling provisions in the draft royal decree submitted for advice. However, the clarification provided in the report to the King regarding this matter can be retained as an indication to the King to make use of the existing statutory enabling provisions with a specific purpose in mind.

Article 4
12. Subject to the general observation in point 5, for the sake of readability and intelligibility of the draft, it is recommended to integrate the definitions contained in Article 4 into a new Article 16. Articles 2 and 3 of the draft must then be adapted to the relevant definitions as necessary. For example, it suffices to refer to the “law” in the relevant articles rather than repeatedly stating “the Law of 2 August 2002 concerning the supervision of the financial sector and financial services”.

The proposed restructuring can also be used to re-examine the division of the draft into titles. For example, there is Title I, “Introductory provisions”, which, however, consists of Articles 1 to 3.

In the French text of the definition of the concept “linked insurance agent”, the words “entre eux” must be added at the end of the second dash of Article 4, 9°, first paragraph.
In Article 4, 14°, b), of the draft, the words “as referred to in sub a) of Article 4, first paragraph, 13°, of this decree” must be replaced by the words “as referred to in 13°, sub a)”.

Article 5
15. The question arises as to whether Article 5 intends to cover all regulated enterprises, including those referred to in Articles 2 and 3 of the draft. The relationship between Article 5 and Articles 2 and 3 of the draft should be made clearer. The same observation must be made regarding Articles 6 and 7 of the draft.

In the introductory sentence of Article 5 of the draft, it should be mentioned that Article 27 of the Law applies to the intended regulated enterprises in the following wording.
In the proposed provision under Article 5, 1°, of the draft, it is better to write “when offering or concluding insurance contracts or when offering or providing insurance mediation services...” instead of “when offering or providing insurance contracts or insurance mediation services...”.
The recommendation to the client or potential client may, pursuant to the proposed Article 27, § 4, first paragraph, of the Law of 2 August 2002 (Article 5, 3°, of the draft), concern “the savings or investment insurance policies suitable for him”, but apparently also “insurance mediation services”. The question is what such a recommendation of a “suitable insurance mediation service” precisely entails and which data must be taken into account, given that formulating recommendations is precisely part of the essence of insurance mediation itself. It is recommended to provide some further explanation in this regard in the report to the King.

Articles 6 and 7
19. Subject to the observation in point 15, it is preferable to merge Articles 6 and 7 of the draft into a single provision stating that Articles 28 and 28bis of the Law of 2 August 2002 are not applicable to the intended regulated enterprises.

The Clerk, The President,
Marleen VERSCHRAEGHEN Marnix VAN DAMME

Notes
(1) The question arises as to whether both conduct rules established “by” or “under” the law are intended. The fact that the requirement for statutory confirmation, which Article 26, fourth paragraph, of the Law of 2 August 2002 provides for with regard to insurance companies, is not explicitly provided for, seems to indicate that only conduct rules established “under” the law are intended. This does not change the fact that the power granted to the King, as contained in the second sentence of Article 12sexies, § 1, second paragraph, of the Law of 27 March 1995, is unclear on this point and may lead to uncertainty regarding its exact scope and the possible applicability of the requirement for statutory confirmation of its implementing decrees. The legislator would therefore be well advised to more clearly define the enabling provision in the second sentence of Article 12sexies, § 1, second paragraph, of the Law of 27 March 1995.

(2) Law of 30 July 2013 ‘strengthening the protection of users of financial products and services as well as the powers of the Financial Services and Markets Authority and containing various provisions (I)’.

(3) This paragraph must precede the paragraph of the preamble referring to the opinion of the Council of State.

(4) Since 1 January 2014, the sustainability impact assessment has been subject to the regulatory impact analysis referred to in Article 5 of the Law of 15 December 2013 ‘containing various provisions concerning administrative simplification’. From Article 6, § 1, of that Law, read in conjunction with Article 3, § 1, of the Royal Decree of 21 December 2013 ‘implementing Title 2, Chapter 2 of the Law of 15 December 2013 containing various provisions concerning administrative simplification’, it can be deduced that the standard form to be completed for this purpose must be attached to the files submitted for approval to the Council of Ministers from 1 January 2014.

(5) According to the delegate, Article 2, second paragraph, of the draft effectively only serves “to recall the power contained in Article 26, third paragraph, of the Law of 2 August 2002, under which the King may declare conduct rules in whole or in part inapplicable to insurance companies (which is the case here for pension products)”.

(6) Taking into account the suggestion made in point 10 to delete the current Article 1.

(7) See also the definition of the concept “entering into competition with each other” in Article 4, 9°, second paragraph, of the draft.

(8) See in particular the second paragraph of the proposed provision.

21 FEBRUARY 2014. — Royal Decree on the rules for the application of Articles 27 to 28bis of the Law of 2 August 2002 concerning the supervision of the financial sector and financial services to the insurance sector

PHILIPPE, King of the Belgians,
To all, present and future, Greeting.

Having regard to the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance, Article 12sexies, § 1, inserted by the Law of 30 July 2013;

Having regard to the Law of 2 August 2002 concerning the supervision of the financial sector and financial services, Article 26, third and fourth paragraphs, inserted by the Law of 30 July 2013;

Having regard to the opinion of the Inspector of Finances, given on 18 September 2013;

Having regard to the opinion of the Financial Services and Markets Authority, given on 19 September 2013;

Having regard to the agreement of the Minister of the Budget, dated 25 September 2013;

Having regard to the preliminary examination regarding the necessity to carry out a sustainability impact assessment, concluding that a sustainability impact assessment is not required;

Having regard to Opinion 54.373/1 of the Council of State, given on 17 January 2014, in application of Article 84, § 1, first paragraph, 1°, of the Laws on the Council of State, coordinated on 12 January 1973;

On the proposal of the Minister of the Economy and Consumers and the Minister of Finance and on the advice of the Ministers meeting in Council,

Have decided and decide:

TITLE I - Introductory provisions

Article 1. For the purposes of this Decree, the following shall be understood:

1° “law”: the Law of 2 August 2002 concerning the supervision of the financial sector and financial services;

2° “Law of 27 March 1995”: the Law of 27 March 1995 concerning insurance and reinsurance mediation and the distribution of insurance;

BELGIAN STATE GAZETTE — 07.03.2014 − Ed. 2 — MONITEUR BELGE 20153

3° "insurance control law": the Law of 9 July 1975 concerning the control of insurance undertakings;

4° "insurance undertaking": an insurance undertaking within the meaning of Article 91bis, 1° and 2°, of the insurance control law;

5° "insurance intermediary": any legal entity or any natural person acting as an independent worker within the meaning of social legislation, whose Member State of origin is Belgium or who carries out activities in Belgium, and who exercises insurance mediation activities, even occasionally, or has access to such activities;

6° "insurance mediation service": the activities carried out by an insurance intermediary or by an insurance undertaking without the intervention of an insurance intermediary, consisting of advising on, presenting or offering, or carrying out preparatory work for the conclusion of insurance contracts, or assisting in their management and execution. The following activities are not considered as insurance mediation: occasional information provision within the framework of another professional activity, provided that the purpose of these activities is not to assist the client in concluding or executing an insurance contract, the professional management of claims for an insurance undertaking, or claims settlement and claims expertise;

7° "insurance sub-agent": an insurance sub-agent as defined in Article 1, 8°, of the Law of 27 March 1995;

8° "linked insurance agent": the insurance agent who, by virtue of one or more agreements or powers of attorney, may only carry out insurance mediation activities in the name and on behalf of:

a single insurance undertaking; or
several insurance undertakings insofar as the insurance contracts of those undertakings are not mutually competing insurance contracts;
and acts under the full responsibility of that undertaking(s) for the insurance contracts concerning them respectively.

For the purposes of this Article, the following insurance contracts are considered as "mutually competing insurance contracts":

the insurance contracts that form part of the group of activities "life" as defined in Annex I to the Royal Decree of 22 February 1991 laying down the general regulation concerning the control of insurance undertakings, as well as the insurance contracts that form part of the life insurance branches as defined in Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or in Annex II to 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), which meet the definition of savings or investment insurance as referred to in 14° and 15° of this Article;
the other insurance contracts that form part of the group of activities "life" as defined in Annex I to the Royal Decree of 22 February 1991 laying down the general regulation concerning the control of insurance undertakings, as well as the insurance contracts that form part of the life insurance branches as defined in Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or in Annex II to 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), other than those meeting the definition of savings or investment insurance as referred to in 14° and 15° of this Article; as well as,
the insurance contracts that form part of the group of activities "non-life", when they belong to the same branch within the meaning of Annex I to the Royal Decree of 22 February 1991 laying down the general regulation concerning the control of insurance undertakings, of Annex, point A, to Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance, or of Annex I, Part A, to 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);

9° "other insurance intermediary than a linked insurance agent": the insurance intermediary who, by virtue of several agreements or powers of attorney, carries out insurance mediation activities in the name and on behalf of several insurance undertakings without being linked to those insurance undertakings, as well as the insurance sub-agents acting under the responsibility of that intermediary, and the insurance broker as referred to in Article 1, 6°, of the Law of 27 March 1995, as well as the insurance sub-agents acting under the responsibility of that broker;

10° "insurance undertaking sensu lato": an insurance undertaking as well as its linked insurance agents and the insurance sub-agents acting under the responsibility of those linked insurance agents;

11° "service provider": an insurance undertaking sensu lato or another insurance intermediary than a linked insurance agent;

12° "advice on a savings or investment insurance": the provision of personalized recommendations to a client, either at his request or at the initiative of the service provider, regarding one or more savings or investment insurances;

13° "personalized recommendation": a recommendation regarding one or more savings or investment insurances, which is presented as suitable for the person in question, or is based on an assessment of his personal circumstances.
A recommendation is not a personalized recommendation if it is made exclusively via distribution channels within the meaning of Article 2, first paragraph, 26°, of the Law;

14° "savings insurance": an insurance contract that:
a) relates to branches 21, 22 or 26 of the group of activities "life" in Annex I to the Royal Decree of 22 February 1991 laying down the general regulation concerning the control of insurance undertakings, and which includes a savings component, as well as an insurance contract as referred to in points I, II or VI of Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or of Annex II to 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) which includes a savings component; or b) forms a combination of several of the contracts referred to in sub a);

15° "investment insurance": an insurance contract that:
a) relates to branch 23 of the group of activities "life" in Annex I to the Royal Decree of 22 February 1991 laying down the general regulation concerning the control of insurance undertakings, as well as an insurance contract as referred to in point III of Annex I to Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance or of Annex II to 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); or b) forms a combination of one or more insurance contracts as referred to in 14°, sub a), and one or more insurance contracts as referred to in sub a), or a combination of several insurance contracts as referred to in sub a).

Art. 2. The conduct rules determined by Articles 27, 28 and 28bis of the Law are not applicable to transactions carried out by service providers when they relate to contracts concluded:
1° by public authorities and public bodies in the context of statutory pensions; or 2° in one of the following cases:
a) in the context of the Law of 28 April 2003 concerning supplementary pensions and the tax system of those pensions and of certain supplementary benefits concerning social security; b) in the context of Title II, Chapter I, Section 4, of the Programme Law (I) of 24 December 2002; c) in execution of another commitment of a supplementary pension in the context of the professional activity other than those referred to in a) and b).

Art. 3. The conduct rules determined by Articles 27, 28 and 28bis of the Law are not applicable to service providers in the following cases:

1° when the service providers carry out their activities exclusively with a view to insuring the risks of their own undertaking or of the group of undertakings to which they belong;

2° when the insurance intermediation service relates to insurance contracts for which all the following conditions are met:

a) the contract requires only knowledge of the insurance coverage offered;

b) the contract is not a life insurance contract;

c) the contract does not cover any risk relating to civil liability;

d) the insurance intermediation service does not constitute the main professional activity of the persons concerned;

e) the insurance is a supplement to the supply of a product or the provision of a service by any supplier, and covers:

the risk of defect, loss or damage to goods supplied by that supplier, or
the risk of damage or loss of baggage and other risks associated with a trip booked with that supplier, even if this insurance covers life insurance risks or civil liability risks, but only on condition that the coverage is additional to the main coverage of the risks associated with the trip;

f) the amount of the annual premium is not higher than 500 euros and the total duration of the contract, including any renewals, does not exceed five years.

TITLE II. — Rules for the application of Articles 27, 28 and 28bis of the Act on service providers

Art. 4. Article 27 of the Act applicable to service providers in the following wording:

1° paragraph 1 must be read as follows: "When offering or concluding insurance contracts or when offering or providing insurance intermediation services, service providers ensure to act in a loyal, fair and professional manner in the interests of their clients. When offering or providing insurance intermediation services, service providers in particular comply with the rules of conduct set out in paragraphs 2, 3 to 5, 7 and 8, 11 and 12";

2° paragraph 2bis is not applicable to service providers;

3° paragraphs 3, 4 and 5 must be read as follows:

"§ 3. When a service provider provides an insurance intermediation service, appropriate information is provided to clients or potential clients in a form understandable to them regarding:

the service provider and its services;
the types of insurance contracts offered, and the relevant coverages and conditions;
savings or investment insurance and the proposed savings or investment strategies; this includes appropriate explanations and warnings about the risks associated with saving or investing in these products or with certain savings or investment strategies;
the costs and related charges,

so that they are reasonably able to understand the nature of the offered insurance intermediation service and of the specifically offered insurance contract, and, with regard to savings or investment insurance, the risks associated with it, and therefore to make an informed decision as to whether or not to conclude an insurance contract. This information may be provided in a standardized form.

§ 4. When providing advice on savings or investment insurance, the service provider obtains from the client or potential client the necessary information regarding their knowledge and experience concerning the specific type of savings or investment insurance, their financial situation and their savings or investment objectives, in order to be able to recommend to the client or potential client the savings or investment insurance or insurance intermediation services suitable for them.

When a service provider providing advice on savings or investment insurance cannot obtain the information required under the first paragraph, it does not recommend savings or investment insurance or insurance intermediation services to the client or potential client.

§ 5. When the service provider provides an insurance intermediation service relating to savings or investment insurance without providing advice on such insurance, it obtains information from the client or potential client regarding their experience and knowledge in the field of savings or investment with regard to the specific type of savings or investment insurance they intend to offer or that is requested, so that it can assess whether the intended savings or investment insurance or the intended insurance intermediation service is suitable for the client.

When the service provider, on the basis of the information received under the first paragraph, considers that the savings or investment insurance or the insurance intermediation service is not suitable for the client or potential client, it warns them. This warning may be provided in a standardized form.

When the client or potential client chooses not to provide the information referred to in the first paragraph regarding their experience and knowledge, or provides insufficient information on this matter, the service provider warns the client or potential client that it cannot determine whether the offered savings or investment insurance or the offered insurance intermediation service is suitable for them as a result of that decision. This warning may be provided in a standardized form.";

4° paragraph 6 is not applicable to service providers;

5° paragraph 7, first paragraph, must be read as follows:

"§ 7. The service provider keeps a file with one or more documents, such as the contract it has, if applicable, concluded with the client, in which the rights and obligations of both parties are described, as well as the other conditions under which it will provide services to the client.";

6° paragraph 7, second and third paragraphs, are not applicable to service providers;

7° paragraph 7, fourth paragraph, must be read as follows:

"§ 7. The King may, on the advice of the FSMA, determine further rules regarding the content of the agreements to be concluded with clients.";

8° paragraph 8 must be read as follows:

"§ 8. The client must receive adequate reports from the service provider on, as the case may be, the insurance intermediation service it offers him, or the insurance contracts he has concluded with him. Where appropriate, these reports include the costs of the insurance intermediation services provided to clients or the insurance contracts concluded by clients. The FSMA may, by regulation taken in implementation of Articles 49, § 3, and 64, of the Act, clarify the content and form of these reports, as well as the modalities for their submission.";

9° paragraphs 9 and 10 are not applicable to service providers;

10° paragraph 11 must be read as follows:

"§ 11. The King determines, on the advice of the FSMA, further rules for the implementation of the rules of conduct set out in §§ 1, 2, 3 to 5, 7, first paragraph, and 8.".

Art. 5. Articles 28 and 28bis of the Act are not applicable to service providers.

TITLE III — Transitional and final provisions

Art. 6. § 1. This Decree enters into force on 30 April 2014.

§ 2. This Decree applies to transactions carried out or taking place on Belgian territory from 30 April 2014.

Art. 7. The Minister responsible for Economy and Consumers and the Minister responsible for Finance are, each insofar as he is concerned, charged with the implementation of this Decree.

Given at Brussels, 21 February 2014.

PHILIP

By the King:

The Deputy Prime Minister and Minister of Economy and Consumers, J. VANDE LANOTTE

The Minister of Finance,
K. GEENS

Royal Decree of 21 February 2014 on the application modalities to the insurance sector of Articles 27 to 28bis of the Law of 2 August 2002 on the supervision of the financial sector and financial services

II. Commentary on the Articles

Article 1

Article 2

Article 3

Article 4

II. Commentary on the Articles

Article 1

Article 2

Article 3

Article 4

Lineage: In force