Proposition 51K1993

Projet de loi modifiant la loi du 25 juin 1992 sur le contrat d'assurance terrestre et la loi du 27 mars 1995 relative à l'intermédiation en assurances et à la distribution d'assurances.

General information ¶

Submitted by

PS | SP MR Open Vld Vooruit Purple Ⅰ

Submission date

Sept. 8, 2005

Official page

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Status

Adopted

Requirement

Simple

Subjects

EC Directive consumer protection insurance insurance occupation insurance company insurance contract

Voting ¶

Voted to adopt

CD&V Vooruit Ecolo LE PS | SP Open Vld N-VA MR FN VB

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Discussion ¶

Jan. 12, 2006 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, I will be brief. I want to offer my best wishes to those I have not seen yet.

This is the transposition of a European Directive on insurance intermediation. That Directive defines the status of the insurance intermediary. Its main purpose is to promote the exercise of the right of establishment and the freedom to provide services. In fact, it thus implements the classic principle of home country control, namely a European passport.

Subsequently, the Directive requires insurance intermediaries to provide certain information to their clients, who are future customers and insurers. It also provides for certain sanctions and adapts the Act of 27 March 1995.

I would like to emphasize that the bill came after delicate negotiations in the sector between the insurers, the brokers and the agents, and that the minister succeeded in submitting a balanced bill to the committee, which, as I said earlier, was unanimously approved. Colleagues, I advise you to read the speeches of Mrs. Véronique Ghenne, Mrs. Simonne Creyf, your servant, Mrs. Magda De Meyer and Mrs. Karine Lalieux.

All articles have been approved and the bill has been adopted unanimously.

Does this apply to both bills?

This applies to both.

Mr. Speaker, Mr. Minister, colleagues, this bill is about insurance intermediaries, insurance brokers, agents and sub-agents. It is a transposition of a European directive, though with a year delay. As a result, the European Commission has drawn us on the fingers and has sent a reasoned opinion to Belgium, which is the final step in an EU infringement procedure. Until then this brief introduction. Their

The insurance intermediation sector was actually regulated in several steps. An important and ⁇ even the most important step in the whole organization of insurance intermediation is the Act of 27 March 1995 on insurance intermediation and distribution. This law came after an initiative and legislative proposal from then-CVP colleague Frans Cauwenberghs. There are such a number of laws that continue to bear the name of their applicant, even though they are amended and amended. This is ⁇ the case with the Cauwenberghs Act of 27 March 1995. Their

Cauwenberghs law was very deeply discussed in 1993, 1994 and 1995 in the House and Senate. I was a member of the Senate at that time and actively participated in parliamentary discussions at that time. The law of Cauwenbergh was important and in fact even groundbreaking. For the first time, real activities of insurance brokers and agents were regulated. Competence requirements such as training, knowledge and practice were established, as well as the solvency requirement. Since then, not everyone can just sell insurance. A statute of insurance intermediary was established and the control was organized. Their

Both draft laws that are now available are actually moving in the same direction as regards the statute for the insurance intermediary, for the broker and the agent, and are also a step further in the protection of consumers. One of the key provisions in the draft directive was already in the directive, but is now being transposed into Belgian law: insurance intermediaries who are recognised in a certain Member State of the European Union can now also offer their services in a Member State other than their home State. It is intended that this would have a beneficial effect on the pricing of insurance products. We can agree to this. We can only hope that, in the first place, the consumer will indeed experience that beneficial effect on pricing, that, in the second place, our own insurance intermediaries will not be competed out of the market by the foreign intermediaries, and, in the third place, that the consumer who concludes an insurance contract with a foreign company will continue to be able to rely on the same protection as is currently the case. Their

Mr. Minister, on a certain point, which I have already discussed in the committee, I would like to come back again.

For us, the next big question remains open. If an insurer steps to an agent or broker for an insurance, what guarantees does the insurer-client have other than that he actually gets the best product and the product that is most tailored to his situation? With a car insurance or with a fire insurance, that may not all play so badly or that is less problematic. But with the conclusion of a life insurance or investment products, there are also serious commission wages involved. So it is really important that whoever is looking for a life insurance, an investment, indeed gets the product that is the best and most suitable for the insurer, and not the product that generates the most commission pay for the intermediary, the insurance agent or the broker.

In my view, Article 19 of the draft is a special article in this regard. I even think that Article 19 is almost the most important article in the entire draft law. In fact, that article states that an insurance intermediary who concludes an insurance contract with a client must do so after an impartial analysis. Therefore, he must first examine the various products present on the market. He should motivate his advice to the client, which is important. But I think it is even more important, before the conclusion of the insurance contract, that the insurance intermediary should identify the desires and needs of his client. This is stated in Article 19, § 3. The provision in Article 19, §3 is modest, but it is substantial.

How will this important provision in Article 19, §3 be applied in practice? How will the desires and needs of the insurer be mapped? Should this be done verbally or should it be done in writing? Should a written advice be provided to the client? Is it a document? Can the client eventually still step to a third party, to another insurer or broker, to compare?

Mr. Minister, I would like to hear from you what this means in practice and how this important Article 19, paragraph 3, which is to protect the consumer, will be implemented in practice.

Another crucial point concerning consumer protection is the consumer who enters into an insurance contract with a non-Belgian intermediary or with a foreign company. The response of the representative of the Commission for Banking, Finance and Insurance to our questions on consumer protection in this case shows that the underlying philosophy of the directive is that within the European Union the regulation is harmonised. This means that equivalent or equivalent legislation is in force in all Member States. In this regard, in my opinion, a form of protection is provided.

However, we must hope that this is effectively the case and that all supervisory bodies in the various Member States of the European Union observe a sufficiently high level of protection and vigilance. However, in this context, the representative of the Commission for Banking, Finance and Insurance points out that cooperation between Member States on the control of insurance intermediaries is a new feature for which there is still little expertise. In this regard, there is still a lot of work to be done and the necessary vigilance will continue to be required in order to timely detect malicious intermediaries from outside Belgium with a so-called European passport and to prevent them from abusing the consumer.

As regards the protection of consumers with regard to the complaint settlement, I would like to remind you, Mr. Minister, first of all that it would be good to come up with a single Ombudsman’s “insurance” service, if possible, rather than the three currently existing services. You have already announced this several times, including during the discussion of this draft. We hope that this can be achieved in the short term with a view to the clarity for the consumer and the improvement of the efficiency of the work of the Ombudsman’s office itself. In this context, CD&V requests that the Royal Decrees necessary for the out-of-court complaint regime as provided for in the draft be published with the utmost urgency in order thus to better guarantee the protection of consumers.

Mr. Minister, Mr. President, colleagues, we have approved this bill in the committee. We will vote in favour of both bills. Mr. Minister, can you explain again how Article 19 paragraph 3 will be developed in practice?

The draft law on intermediation and aiming to amend the 1992 Act on the Land Insurance Contract, as well as the 1995 Act on Insurance Intermediation, aims to transpose into Belgian law the European Parliament and Council Directive 2002/92 of 9 December 2002 on insurance intermediation.

This Directive provides for provisions aimed at better protecting the rights of insurers. We can therefore only welcome the transposition thus made, even though we know that our national legislation goes beyond the guarantees that the directive imposes as a strict minimum.

As regards the handling of complaints and the establishment of an extrajudicial body, the Directive provides, I cite, "that Member States shall ensure that procedures are established to enable customers and other interested parties, in particular consumer associations, to file a complaint against insurance and reinsurance intermediaries". Consumer protection is at the heart of the European regulation on insurance intermediation. As a reminder, an opinion of the Consumer Council on the handling of insurance complaints and disputes was issued in October 2005. He thus welcomed the willingness to entrust the handling of complaints and insurance disputes to a single body, in an effort to ensure the transparency and efficiency of the system.

Nevertheless, the consumer representatives expressed their concerns about how to ensure the independence and impartiality of an out-of-court dispute resolution body. Our group is of the opinion that an out-of-court complaint handling system must, for consumers, present guarantees of credibility and impartiality. For us, entrusting only representatives of professional interests to resolve insurance disputes does not offer such guarantees.

A sufficient presence of consumer representatives contributes to the credibility and effectiveness of the institution. We would also like to emphasize, Mr. Minister, that the representation of consumers would not result in additional costs for the sector. The financing of the system of equal representation of consumers would be part of the overall financing of the extrajudicial complaint handling system. The current budget, consisting of annual contributions paid by insurance undertakings, pension funds, capitalization companies, mortgage undertakings and insurance intermediaries, also provides for an allocation to cover auditing and consumer protection costs.

The financing of the system ensuring equal representation of consumers is thus provided for by these various allocations and, I repeat, ⁇ does not constitute a barrier to the implementation of that system.

The response of Mr. The minister for the financing of the system discussed here did not convince us, so our group decided to transform the amendment that we had withdrawn into a commission into a bill. This will be submitted soon, in order to affirm our position on the importance of the equal participation of consumer representatives in the complaint management service.

In conclusion, we generally support the project, which is why we will vote positively.

There is no dispute on the substance of the case.

I would like to return, however, to Mrs. Creyf’s observation concerning Article 19, § 3. I have already answered in the committee that there is a very strong competition among insurance intermediaries and there is a possibility of shopping.

This obliges those persons, if they exercise some caution, to explain and explain, as far as possible, the product they offer. If it turns out that their civil liability is compromised as a result of an incident in which underinsurance or insufficient information was communicated to the insurer, the burden of proof shall be that of the insurance intermediary. He bears the burden of proof and it is his civil liability that is at risk at that moment. He provides a service and must therefore take all possible precautions to effectively guarantee the service he offers to the customers and therefore have fully informed them.

In this regard, I think there is sufficient guarantee within the Civil Code. In any case, I have noticed that in the conversations I have held with the sector, one has a very good idea of it and is aware of the problems that arise.

Mrs. Ghenne, I took note that you were going to submit a bill, which I think is a good augury. You must know that nothing has yet been decided and that, as I have already said in the committee, it is of course that we will look at your proposal, when the time comes.

Mr. Minister, in Article 19, 3°, it is also stated that the insurance intermediary must identify the desires and needs of his client before concluding an insurance contract. It is that provision that I find ⁇ important because, if it is properly carried out, it implies a guarantee that the product sold to the insurer is indeed the product that best meets his needs. There are various life insurance and investment funds. What does someone need in their situation? What does one need as a single, as a home father with children?

With regard to investment products and life insurance, very serious commission wages are affected. So the temptation can be present with a broker to sell that product that earns him the most. Therefore, there must be guarantees for consumer protection. In Article 19, I find a means, a cutting-edge to realize this.

I would like to know, Mr. Minister, how can this be concretized? Identifying needs and desires, in what material way will this be done?

Mr. Speaker, I compare the situation of the insurance intermediary with other freelance professions such as the lawyer. When seeking advice from a lawyer, he must, of course, also take into account the situation of his client and explain the best possible situation for him. If he does not do so, his civil liability may be compromised. It should also be noted that this Article 19 must be read together with Article 1.384 of the Civil Code.

In this regard, a second aspect is also important, in particular that the insurance intermediaries have been united in the meantime. They are subject to deontological standards. In any case, there will therefore be exercised control from the sector in order to avoid that the rotten apples that may arise and that are only out of profit and offer a product of an insurance company because one knows that one will receive the highest possible compensation without concerning with the content of the customer’s dossier, can be counted.