HL Deb 27 June 1994 vol 556 cc595-6

7.5 p.m.

Viscount Goschen rose to move, That the draft regulations laid before the House on 24th May be approved [20th Report from the Joint Committee].

The noble Viscount said: My Lords, I beg to move the Motion standing in my name on the Order Paper.

The regulations before the House today amend primarily the Insurance Companies Act 1982. Consequential amendments are also made to numerous other pieces of legislation, including the Financial Services Act 1986.

The third directives complete the single European market for insurance by establishing the principle of the "single passport" for insurance companies. By this I mean the principle that an insurance company should be able to offer its products throughout the single market on the basis of the authorisation it receives from the member state in which its head office is situated. The regulations implement the single passport by removing EC insurance companies from the requirement to apply for authorisation before selling insurance products in the United Kingdom. In its place a system of recognition for EC companies is introduced.

The system of supervision established by the directives is largely based on the UK approach to the regulation of insurance companies, summarised as "freedom with disclosure". Many other member states currently operate more restrictive regimes. The removal of such restrictions will significantly increase the ease with which UK insurers can access markets in other member states. Insurers also stand to benefit because they will only need to meet the supervisory requirements of one supervisory authority and file one set of regulatory returns annually. Consumers within the European Union will in turn benefit from increased choice and greater competition between insurers.

These regulations represent a valuable contribution to the completion of the single European market for all goods and services. The UK has a strong and innovative insurance industry which has much to gain from the freedoms that these insurance directives provide. I commend the regulations to the House.

Moved, That the draft regulations laid before the House on 24th May be approved [20th Report from the Joint Committee].—(Viscount Goschen.)

Lord Graham of Edmonton

My Lords, my noble friend Lord Peston has asked me to say that he and the Labour Front Bench are content with the order that has been submitted to the House tonight.

On Question, Motion agreed to.