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February 20 2018
EU member states may avail themselves of the concept of general good in order to demand compliance with national laws from an insurer wishing to pursue business in its territory under the freedom of establishment or freedom to provide services. Under Article 146(3) of the EU Solvency II Directive (2009/138/EC), before an insurer enters the market in a host member state, the host member's supervisory authority must inform the home member's supervisory authority of the conditions under which, in the interest of the general good, business must be pursued in the host member state. The home member's supervisory authority then conveys such information to the relevant insurer.
The EU Solvency II Directive was transposed into Portuguese law via Law 147/2015 of September 9, which approved the Insurance Supervision Act. In the second half of 2017, the Portuguese Insurance Supervisory Authority (ASF) published Consultation Paper 7/2017, requesting comments on the draft regulatory norm, which sets out the general good provisions applicable to insurers acting in Portugal under the freedom of establishment or freedom to provide services. The ASF has yet to publish this regulatory norm. The draft sets out a number of general good provisions which would be applicable to the distribution of all types of insurance, as well as some additional provisions which would apply to the distribution of mandatory insurance and life insurance products.
Under the draft regulatory norm, the following general good provisions would apply to the distribution of insurance products:
The following general good provisions would apply to mandatory insurance:
Under the draft regulatory norm, insurers that distribute life insurance products for housing loans would have to comply with the applicable specific consumer protection rules, as set out in Decree-Law 222/2009 of September 11.
Specific provisions would also apply to unit-linked insurance products. However, they are under review by the Securities Market Commission together with the ASF due to EU Regulation 1286/2014's entry into force on January 1 2018.
For further information on this topic please contact Margarida Lima Rego or Nuno Sobreira at Morais Leitão Galvão Teles Soares da Silva & Associados by telephone (+351 21 381 74 00) or email (firstname.lastname@example.org or email@example.com). The Morais Leitão Galvão Teles Soares da Silva & Associados website can be accessed at www.mlgts.pt.
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