No. 7/2005 - Insurance Mediation Directive implemented in Norwegian law

Circular No. 7/2005 February 2006

To the Members of Assuranceforeningen Gard -gjensidig-

Dear Sirs,

Insurance Mediation Directive implemented in Norwegian law

Introduction

The purpose with this Circular is to inform Members who are placing their business with the Association through an intermediary (e.g. broker) based within the European Economic Area (“EEA”) of the requirements that entered into force with effect from 1 January 2006 in Norway as a result of the implementation of the European Union’s Directive (2002/92/EC) on Insurance Mediation (the “Directive”). Other Member States within the EEA have already introduced or are in the process of introducing legislation to implement the Directive within their own jurisdiction.

Insurance mediation activities

The Purpose of the Directive is to regulate the activities of firms carrying out insurance mediation activities. Insurance mediation activities have been categorised as;

• advising on contracts of insurance;

• arranging deals in contracts of insurance;

• making arrangements with a view to transacting in contracts of insurance;

• dealing as an agent in contracts of insurance;

• assisting in the administration and performance of contracts of insurance; and

• agreeing to carrying on a regulated activity.

In Norway, the Directive will apply to all brokers and other insurance intermediaries who perform insurance mediation activities. If you use an intermediary to place your business with the Association and that intermediary is domiciled in the EEA the Directive will require that intermediary to be authorised to carry out intermediary activities by the regulatory authority of its domicile. If the intermediary is unsure of whether or not its activities will fall under the terms of the Directive, it should check the position with the relevant regulator as soon as possible.

In Norway the Directive will apply to the Association as it falls within the scope of the Directive when it deals directly with a Member without the involvement of an intermediary and, accordingly, the Association has applied for and been granted authorisation by the FSA.

Requirements

The legislation also imposes on the Association a legal responsibility to ensure that when transacting with intermediaries domiciled in the EEA, it ensures that those intermediaries have the necessary authorisation. In order to discharge that responsibility, the Association intends moving to a system of self – certification, whereby intermediaries based in the EEA introducing business to the Association will be expected to confirm that they are authorised in the country of their domicile for the purpose of the Directive and that they have a “passport” (freedom of services authorisation) to do so. In order to simplify the process for intermediaries the International Group Clubs have agreed a common approach. Regulated intermediaries will be expected to confirm that they have the necessary approval from the regulator of their domicile by including the appropriate form of certification from the suggested examples below.

For intermediaries regulated in the EEA and introducing EEA business the proposed wording is:

"(Name of Intermediary) is registered for the Insurance Mediation Directive (“IMD”) purposes with (Name of Regulator) in (Country of Regulation), and will advise you of any change in that status."

The Association will be writing to EEA-based intermediaries advising them of the requirements and seeking confirmation of their regulatory position under the Directive.

In order for the Association to accept a risk placed with it by an intermediary to which the Directive applies, certification as described above must be provided by the intermediary. Without that certification the Association will not be able to accept the risk.

The Association will be writing to EEA-based intermediaries advising them of the requirements and seeking confirmation of their regulatory position under the IMD.

The purpose of this circular is to draw Members' attention to the legislation which has been enacted or is in the process of being enacted and of the Club's requirements in connection with it. It is, however, a matter for Members and others who may be affected by the Directive and the relevant legislation to determine how the Directive and the legislation apply to them and how they need to comply with it.

If you have any questions, please contact Kjetil Eivindstad, Senior Vice President, in Gard AS.

Yours faithfully, GARD AS as agent only for Assuranceforeningen Gard –gjensidig-

Claes Isacson Chief Executive Officer