Royal Decree of 22 December 2020 implementing Article 20(1) of the Law of 3 April 2019 on the withdrawal of the United Kingdom from the European Union for insurance undertakings and intermediaries

FEDERAL PUBLIC SERVICE ECONOMY, SMES, SELF-EMPLOYED AND ENERGY * [C − 2020/16465] 22 DECEMBER 2020. — Royal Decree implementing, for what concerns insurance undertakings, insurance, ancillary insurance and reinsurance intermediaries, Article 20, first paragraph of the Law of 3 April 2019 concerning the withdrawal of the United Kingdom from the European Union Report to the King

Sire,

This draft Royal Decree provides for the implementation, for what concerns insurance undertakings, of Article 20, first paragraph of the Law of 3 April 2019 concerning the withdrawal of the United Kingdom from the European Union, better known as the Brexit Law. It is specifically intended to organize appropriate supervision of insurance undertakings subject to the law of the United Kingdom or of Gibraltar that will cease their activities in Belgium from the date of the expiration of the transition period granted to the United Kingdom in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.

For convenience, this date is referred to in this Decree as the “date of the withdrawal of the United Kingdom from the European Union”.

On that date, the United Kingdom will no longer enjoy the benefits of the internal market and insurance undertakings will no longer enjoy a European passport.

This Decree allows these undertakings to continue managing existing Belgian contracts until their expiry date.

In the European Union, an authorization obtained in one of the Member States for the exercise of insurance activities is valid for the entire territory of the Union (see Art. 15, paragraph 1 of the Solvency II Directive). If undertakings wish to exercise activities on the territory of another Member State via a branch or in the framework of the free provision of services, they must only notify their intention to their supervisor, who will forward this information to the supervisor of the host Member State. This concerns the application of the principle of a single license and the resulting principle of the European passport.

Undertakings subject to the law of a country that is not a Member of the European Union, on the other hand, cannot exercise activity in Belgium unless they establish a branch for which a license has been previously granted by the National Bank of Belgium (Art. 584 of the Law of 13 March 2016). From the withdrawal of the United Kingdom from the European Union and in the absence of an agreement between the European Union and the United Kingdom, British undertakings will no longer have the right to the European passport. Consequently, the undertakings concerned will no longer be able to exercise activities in Belgium unless they meet this condition.

Certain British undertakings have already decided to cease their activities in Belgium. These undertakings will, however, continue to manage their ongoing insurance contracts until the final expiry date of all their obligations. This management – and in particular the management of claims – must be considered as an insurance activity for which a branch in Belgium must in principle hold a license.

SERVICE PUBLIC FEDERAL ECONOMIE, P.M.E., CLASSES MOYENNES ET ENERGIE [C − 2020/16465] 22 DECEMBER 2020. — Royal Decree implementing, for what concerns insurance undertakings, insurance intermediaries, ancillary insurance intermediaries and reinsurance intermediaries, Article 20, paragraph 1 of the Law of 3 April 2019 concerning the withdrawal of the United Kingdom from the European Union Report to the King

Sire,

The present draft Royal Decree implements, for what concerns insurance undertakings, Article 20, paragraph 1 of the Law of 3 April 2019 concerning the withdrawal of the United Kingdom from the European Union, more commonly known as the Brexit Law. More specifically, it aims to organize appropriate supervision over insurance undertakings, subject to the law of the United Kingdom or of Gibraltar, which will cease their activities in Belgium from the date of the expiration of the transitional period granted to the United Kingdom in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.

For convenience, this date is named, in the present Decree, “the date of the withdrawal of the United Kingdom from the European Union”.

At that date, the United Kingdom will no longer benefit from the advantages of the single market and insurance undertakings will no longer benefit from a European passport.

The present Decree allows these undertakings to continue managing the existing Belgian contracts, up to their expiry date.

In the European Union, the approval obtained in one of the Member States to practice insurance activities is valid on the entire territory of the Union (cf. Art. 15, paragraph 1 of the Solvency II Directive). If the undertakings wish to practice activities on the territory of another Member State, whether via a branch or in free provision of services, they must only notify their intention to their supervisory authority, which will transmit the information to the supervisory authority of the host Member State. This is the application of the principle of the single license and the European passport resulting from it.

On the other hand, undertakings subject to the law of a country that is not a Member of the European Union cannot exercise activity in Belgium unless they establish a branch, which must previously be approved by the National Bank of Belgium (Art. 584 of the Law of 13 March 2016). From the withdrawal of the United Kingdom from the European Union and in the absence of an agreement between the European Union and the United Kingdom, British undertakings will lose the benefit of the European passport. Therefore, the undertakings concerned will therefore no longer be able to exercise activities in Belgium unless they respect this condition.

A number of British undertakings have already decided to end their activities in Belgium. Nevertheless, these undertakings will continue to manage the ongoing insurance contracts until the final expiry of all their commitments. This management – and particularly that of claims – must be considered as an insurance activity for which the approval of a branch in Belgium is, in principle, required.

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An insurance undertaking subject to Belgian law may waive its license when it decides to cease its activities. The Bank may take note of this even if the undertaking still has obligations (Art. 538 of the Law of 13 March 2016). Article 543 of the Law of 13 March 2016 stipulates that for an undertaking waiving its license, it is prohibited to conclude new contracts, and Article 545 clarifies that the undertaking remains subject to the supervision of the Bank until all its insurance contracts and all related obligations are settled. The Bank may, however, exempt such an undertaking from certain provisions of the Law of 13 March 2016. It should be noted that the aforementioned articles apply to branches of third countries based on Article 599 of the Law of 13 March 2016.

Applying these principles, a British insurance undertaking that would waive the conclusion of new contracts in Belgium after the date of Brexit would therefore need to apply for a license for a branch based on Article 584, but could at the same time waive that license based on Articles 538 and 599 on the grounds that it will not conclude new contracts in Belgium, whereby the aforementioned provisions would apply to it.

To avoid such a complication, the draft Decree provides a regime for British insurance undertakings that will no longer conclude contracts in Belgium after the date of the withdrawal of the United Kingdom from the European Union, which is comparable to the regime established in Article 545 of the Law of 13 March 2016 for Belgian undertakings. Unless the British undertakings have chosen another option, for example a portfolio transfer or obtaining a license for a branch or subsidiary in Belgium, the regime provided for in the draft Decree is, in principle, the only regime that offers British undertakings the possibility to manage ongoing contracts after Brexit without being subject to the sanctions applicable in case of illegal exercise of the insurance business in Belgium.

In this regard, it is specified that the loss of a license as a result of the withdrawal of the United Kingdom from the European Union is not in itself a valid reason to unilaterally terminate or modify insurance contracts regulated by the Law of 4 April 2014 concerning insurance; British undertakings are therefore obliged to continue the execution of these contracts.

Insurance undertakings making use of such an exceptional regime remain subject to all information requirements and conduct rules applicable in Belgium to their activities, in accordance with Chapter 5 of the Law of 4 April 2014 concerning insurance.

This Decree provides for the implementation, for what concerns insurance, ancillary insurance and reinsurance intermediaries, of Article 20, first paragraph of the Law of 3 April 2019 concerning the withdrawal of the United Kingdom from the European Union, better known as the Brexit Law. It is specifically intended to allow insurance, ancillary insurance and reinsurance intermediaries subject to the law of the United Kingdom or of Gibraltar to temporarily continue managing existing contracts concluded before the date of the withdrawal of the United Kingdom from the European Union.

In the European Union, registration for the exercise of (re)insurance distribution activities is valid for the entire territory of the Union (see Articles 4 and 6 of the IDD Directive 2016/97). If these intermediaries wish to exercise insurance distribution activities on the territory of another Member State via a branch or in the framework of the free provision of services, they must only notify their intention to the supervisor of the home Member State, who will forward this information to the supervisor of the host Member State. This concerns the application of the principle of a single registration and the resulting principle of the European passport.

Insurance, ancillary insurance and reinsurance intermediaries subject to the law of a country that is not a Member of the European Union, on the other hand, cannot exercise activity in Belgium unless they have previously been registered in the register of insurance and ancillary insurance intermediaries or the register of reinsurance intermediaries kept by the FSMA. Article 259, § 1, 3rd paragraph of the Law of 4 April 2014 concerning insurance).

Une entreprise d’assurance de droit belge peut renoncer à son agrément lorsqu’elle décide de mettre fin à ses activités. Cette renonciation peut être actée par la Banque même si l’entreprise a encore des engagements (art. 538 de la loi du 13 mars 2016). L’article 543 de la loi du 13 mars 2016 prévoit que la renonciation emporte l’interdiction de souscrire de nouveaux contrats et l’article 545 précise que l’entreprise reste soumise au contrôle de la Banque « jusqu’à ce que soient liquidés tous ses contrats d’assurance (...), ainsi que tous les engagements y afférents ». La Banque peut toutefois dispenser une telle entreprise de certaines des dispositions de la loi du 13 mars 2016. On notera que les articles précités sont applicables aux succursales de pays tiers sur la base de l’article 599 de la loi du 13 mars 2016.

En application de ces principes, une entreprise d’assurance britannique qui renoncerait à souscrire de nouveaux contrats en Belgique après la date du Brexit devoirait donc faire agréer une succursale sur la base de l’article 584 mais pourrait, dans le même temps, renoncer à cet agrément sur la base des articles 538 et 599 au motif qu’elle ne souscrira plus de nouveaux contrats en Belgique et se voir appliquer les dispositions précitées.

Afin d’éviter une telle complication, l’arrêté en projet prévoit, pour les entreprises d’assurance britanniques qui ne souscriront plus de contrats en Belgique à partir de la date du retrait du Royaume-Uni de l’Union européenne, un régime analogue à celui prévu par l’article 545 de la loi du 13 mars 2016 pour les entreprises belges. À moins que les entreprises britanniques n’aient choisi une autre option, par exemple un transfert du portefeuille ou l’agrément d’une succursale ou d’une filiale en Belgique, le régime prévu par l’arrêté en projet est, en principe, le seul qui offre aux entreprises britanniques la possibilité de gérer les contrats en cours après le Brexit sans s’exposer aux sanctions prévues dans le cas de l’exercice illégal de l’activité d’assurance en Belgique.

À cet égard, il est précisé que la perte d’agrément consécutive au retrait du Royaume-Uni de l’Union européenne ne constitue pas per se un motif valable de résiliation ou de modification unilatérale des contrats d’assurance régis par la loi du 4 avril 2014 relative aux assurances de sorte que les entreprises britanniques sont tenues de poursuivre l’exécution desdits contrats.

Les entreprises d’assurance qui bénéficieront d’un tel régime dérogatoire resteront soumises à l’ensemble des obligations en matière d’information et aux règles de conduite applicables, en Belgique, à leurs activités, conformément au Chapitre 5 de la loi du 4 avril 2014 relative aux assurances.

Le présent arrêté exécute également l’article 20, alinéa 1er de la loi du 3 avril 2019 relative au retrait du Royaume-Uni de l’Union européenne, plus communément appelé loi Brexit, en ce qui concerne les intermédiaires d’assurance, les intermédiaires d’assurance à titre accessoire et les intermédiaires de réassurance. Il vise plus précisément à autoriser les intermédiaires d’assurance, intermédiaires d’assurance à titre accessoire et intermédiaires de réassurance relevant du droit du Royaume-Uni ou de Gibraltar à continuer à gérer temporairement les contrats conclus avant la date du retrait du Royaume-Uni de l’Union européenne.

Une inscription obtenue dans un État membre de l’Union européenne pour l’exercice d’activités de distribution d’assurances ou de réassurances est valable sur tout le territoire de l’Union (articles 4 et 6 de la directive IDD 2016/97).

Si des intermédiaires inscrits souhaitent exercer des activités de distribution d’assurances ou de réassurances sur le territoire d’un autre État membre, que ce soit par le biais d’une succursale ou sous le régime de la libre prestation de services, ils doivent uniquement notifier leur intention à l’autorité de contrôle de leur État membre d’origine, laquelle transmettra cette information à l’autorité de contrôle de l’État membre d’accueil. Il s’agit de l’application du principe de l’inscription unique et du principe du passeport européen qui en découle.

En revanche, les intermédiaires d’assurance, intermédiaires d’assurance à titre accessoire et intermédiaires de réassurance relevant du droit d’un État non membre de l’Union européenne ne peuvent exercer d’activités en Belgique qu’à la condition d’être préalablement inscrits au registre des intermédiaires d’assurance et des intermédiaires d’assurance à titre accessoire ou au registre des intermédiaires de réassurance, tenus par la FSMA (article 259, § 1er, alinéa 3, de la loi du 4 avril 2014 relative aux assurances).

BELGIAN OFFICIAL GAZETTE — 31.12.2020 — MONITEUR BELGE 98167

From the date of the withdrawal of the United Kingdom from the European Union and in the absence of an agreement between the European Union and the United Kingdom, British intermediaries will no longer have the right to the European passport. Consequently, the intermediaries concerned will no longer be able to exercise activities in Belgium unless they meet the above-mentioned conditions. This can create legal uncertainty regarding the further settlement of contracts concluded before the date of the withdrawal of the United Kingdom from the European Union and managed by British insurance, ancillary insurance and reinsurance intermediaries.

Certain British insurance, ancillary insurance and reinsurance intermediaries have already decided to cease their activities in Belgium. These intermediaries wish, however, to continue managing the ongoing insurance contracts managed by them until the final expiry date of the policy or until the management can be transferred to an EU-registered insurance, ancillary insurance or reinsurance intermediary or to an insurance undertaking (insofar as this has a license in the EU or is temporarily authorized under this Royal Decree).

This management constitutes an insurance distribution activity.

To handle these policies properly and safeguard the rights of policyholders and beneficiaries, it is necessary to provide for a special regime. The draft Decree provides for a temporary regime that allows insurance, ancillary insurance and reinsurance intermediaries established in the United Kingdom or Gibraltar and authorized to operate in Belgium prior to the date of the withdrawal of the United Kingdom from the European Union to remain temporarily active with respect to contracts concluded prior to that date, without having to register in the register kept by the FSMA.

The proposed regime aims to ensure the continuity of service for existing contracts after the withdrawal of the United Kingdom from the European Union, in the interest of all contracting parties and for a limited period. Such a regime is necessary to ensure the proper handling of the insurance policy and thus safeguard the interests of policyholders.

Article-by-article discussion CHAPTER I. — General provisions Article 1 This article contains the definitions that are important for the correct application and interpretation of the Decree.

CHAPTER II. — Provisions applicable to insurance undertakings Article 2 Paragraph 1 of the draft article determines the ratione personae scope of the article. This article applies exclusively to insurance undertakings subject to the law of the United Kingdom or of Gibraltar that were able to carry out an insurance activity in Belgium via a Belgian branch (Art. 550 to 555 of the Law of 13 March 2016) or in the framework of the free provision of services (Art. 556 to 561 of the Law of 13 March 2016), and more specifically those among them that cease their activities in Belgium and limit themselves to managing the contracts ongoing on the date of the withdrawal of the United Kingdom from the European Union.

The regime provided for in the draft Decree does not apply to activities that an undertaking subject to the law of the United Kingdom or of Gibraltar wishes to develop in Belgium after the date of the withdrawal of the United Kingdom from the European Union. For those activities, the undertakings concerned must submit a file to the Bank to obtain a license for a Belgian branch (Art. 584 et seq. of the Law of 13 March 2016). As confirmed by draft Article 5 (cf. infra), these undertakings can benefit from the regime of this Chapter during the period prior to the examination of the license application.

It goes without saying that the draft article also does not apply to undertakings that currently have no ongoing contracts in Belgium.

The draft article thus meets the authorization criteria of Article 20, first paragraph of the aforementioned Law of 3 April 2019.

À partir du retrait du Royaume-Uni de l’Union européenne et en l’absence d’accord entre l’Union européenne et le Royaume-Uni, les intermédiaires britanniques perdront le bénéfice du passeport européen. Les intermédiaires concernés ne pourront donc plus exercer d’activités en Belgique que moyennant le respect de la condition évoquée ci-dessus. Cette situation est susceptible de créer une insécurité juridique quant à la liquidation future des contrats conclus avant la date du retrait du Royaume-Uni de l’Union européenne, qui sont gérés par des intermédiaires d’assurance, intermédiaires d’assurance à titre accessoire et intermédiaires de réassurance britanniques.

Certains intermédiaires d’assurance, intermédiaires d’assurance à titre accessoire et intermédiaires de réassurance britanniques ont d’ores et déjà décidé de mettre fin à leurs activités en Belgique. Ces intermédiaires souhaitent néanmoins continuer à gérer les contrats d’assurance en cours dont ils assument actuellement la gestion, et ce jusqu’à l’échéance finale de la police ou jusqu’à ce que cette gestion puisse être transférée à un intermédiaire d’assurance, intermédiaire d’assurance à titre accessoire ou intermédiaire de réassurance inscrit dans un État membre de l’Union européenne ou à une entreprise d’assurance (pour autant que celle-ci soit agréée dans un État membre de l’Union européenne ou bénéficie d’une autorisation provisoire en vertu du présent arrêté). Cette gestion constitue une activité de distribution d’assurances.

Pour permettre le traitement ordonné de ces polices d’assurance et sauvegarder les droits des preneurs d’assurance et des bénéficiaires, il est nécessaire de prévoir un régime particulier. L’arrêté en projet met en place un régime transitoire en vertu duquel les intermédiaires d’assurance, intermédiaires d’assurance à titre accessoire et intermédiaires de réassurance établis au Royaume-Uni ou à Gibraltar qui, avant la date du retrait du Royaume-Uni de l’Union européenne étaient autorisés à opérer en Belgique, pourront poursuivre temporairement l’exercice de leurs activités liées à des contrats conclus avant cette date, sans pour autant devoir être inscrits au registre tenu par la FSMA.

Le régime proposé a pour but de garantir la continuité, après le retrait du Royaume-Uni de l’Union européenne, des services fournis pour les contrats existants, dans l’intérêt de toutes les parties au contrat et ce, pendant une période limitée. Un tel régime est nécessaire pour assurer la liquidation correcte des polices d’assurance et préserver ainsi les intérêts des preneurs d’assurance.

Commentaire des articles CHAPITRE Ier. — Dispositions générales Article 1er Cet article reprend les définitions qui sont importantes pour une correcte application et interprétation de l’arrêté.

CHAPITRE II. — Dispositions applicables aux entreprises d’assurance Article 2 Le paragraphe 1er de l’ar