§ 80. Mr. Teddy TaylorTo ask the Secretary of State for Trade and Industry if, under the relevant European Community directives, British insurance companies will be able to canvas for life insurance and for the insuring of cars, houses and other items of individual property insurance within the European Economic Community after 1992; and if he will make a statement.
§ Mr. RedwoodThere is already freedom of establishment for insurance within the European Community, and United Kingdom insurers established in other member states may advertise there on the same basis as local insurers. The Commission's aim which we strongly support, is also to achieve full freedom for companies to sell insurance on a service basis. The Commission have therefore announced their intention of proposing two further directives, one for life and one for non-life insurance, which will allow insurers to advertise and sell their products anywhere in the Community either on a services basis or from a local branch, on the basis of a single authorisation from their home state supervisor. These directives are however unlikely to come into force until after 1992.
§ 125. Mr. ButterfillTo ask the Secretary of State for Trade and Industry what progress he is making towards the establishment of a free market for the sale by British companies of(a) general insurance and (b) life assurance products within the European Community.
§ Mr. RedwoodAs regards general insurance, three single market directives came into force on 1 July and a638W common position on a fourth (on motor insurance services) was agreed at the internal Market Council on 20 June. The most important of these directives, on Non-Life Insurance Services, established freedom to sell most forms of commercial insurance across frontiers in the Community.
As regards life assurance, a common position was adopted on 29 June on the draft life assurance services directive, which will allow the sale of life insurance across frontiers in cases where the policyholder has taken the initiative in seeking insurance, either directly or through a broker, from a company in another member state.
These directives are important steps towards a free market, but many restrictions remain. I therefore strongly support the announced intention of the Commission to produce two further directives, one each on general insurance and life assurance. These will allow insurers to advertise and sell their products anywhere in the Community, either on a services basis or from a local branch, on the basis of a single authorisation from their home state supervisor.
Mr. Robert G. HughesTo ask the Secretary of State for Trade and Industry whether he intends to publish the names of the companies that have notified him of their intention to take control of insurance companies; when he expects to announce the decision he reaches on whether they are fit and proper to take such control; and if he will make a statement.
§ Mr. RedwoodNo. The Department's consideration of cases under section 61 of the Insurance Companies Act 1982 which deals with changes of control of insurance companies is confined entirely to the regulatory issue of whether the proposed controller is fit and proper. In order to form a view on that question, the Department considers all relevant information, much of which is confidential. It would be inappropriate for the Department to disclose that the procedures had been launched or to reveal the stage which they had reached.
Where a change of control involves a public bid, it would be normal for any necessary regulatory consent to be a condition of the offer, and for that fact to be disclosed when a firm intention to make an offer is announced, and in the offer document. If the course taken by the regulatory procedures gave rise to price-sensitive information, it would be for the bidder to disclose the relevant facts. The Department must concentrate on its task of judging fit and properness under the law; the bidder or target company on any legal or other requirements which may apply to them to make available all necessary information.
Provided that all the necessary regulatory consents are available, the market should determine the outcome of a proposed takeover.