Bolkestein responds to insurers’ clamour for a single market

Date: 20/01/2000

By Renée Cordes

THE European Commission is drawing up plans to make it easier for insurance companies to do business across the Union.

In a communication set to be approved by the EU executive within weeks, Internal Market Commissioner Frits Bolkestein will propose a strict set of criteria which member states would have to meet before imposing restrictions on foreign companies offering services within their borders. The move follows a clamour for action from the fast-growing sector, which says such measures are long overdue.

EU governments often introduce restrictions on foreign firms which are tougher than those in the companies' home countries, claiming that these are necessary for the protection of the 'general good'.

But the lack of a clear definition of the general good has resulted in a patchwork of national laws, prompting complaints from insurance companies which say this causes bureaucratic nightmares and interferes with their right to sell their services throughout the single market.

Bolkestein's proposal would allow insurers to challenge the introduction of measures which did not meet specific criteria, and could pave the way for the Commission to launch legal action against member states which impose unnecessary restrictions.

He is expected to insist that national measures restricting foreign companies' business practices in the name of the general good must be non-discriminatory, proportionate to the objective rules, objectively necessary and justified by an "imperative" reason such as consumer protection, fraud prevention or the protection of workers.

The European Commission is drawing up plans to make it easier for insurance companies to do business across the Union. In a Communication set to be approved by the EU executive within weeks, Internal Market Commissioner Frits Bolkestein will propose a strict set of criteria which Member States would have to meet before imposing restrictions on foreign companies offering services within their borders. The move follows a clamour for action from the fast-growing sector, which says such measures are long overdue.