Study on the current situation and prospects of …

1 Study on the current situation and prospects of mutuals in Europe Final report This Study has been financed by the european commission , DG ENTR Simon Broek Bert-Jan Buiskool Alexandra Vennekens Rob van der Horst Projectnumber: BA03954 Zoetermeer, November 12, 2012 2 The responsibility for the contents of this report lies with Panteia. Quoting of numbers and/or text as an explanation or support in papers, essays and books is permitted only when the source is clearly mentioned.

2 No part of this publication may be copied and/or published in any form or by any means, or stored in a retrieval system, without the prior written permission of Panteia. Panteia does not accept responsibility for printing errors and/or other imperfections. Panteia EIM Box 7001, 2701 AA Zoetermeer, The Netherlands Phone: + 31 79 322 2000 Fax: + 31 79 322 2101 Internet: Email: 3 Foreword The research team is very pleased to present in this report the outcomes of the Study on the current situation and prospects of mutuals in Europe.

3 This Study was commis-sioned by the european commission , DG Enterprise within the context of the Frame-work Contract on economic studies in support of SME policies, ENTR/2007/040, Lot 1. The research activities were carried out by Panteia /EIM between November 2011 and October 2012. The Study took as its starting point a previous european Parliament Study on the role of mutual societies in the 21st century (report published in July 2011). The aim of the present Study is to provide the commission with up to date knowledge to better as-sess the current situation of mutuals and allow a reasoned reflection on the need for eventual future policy development.

4 The Study would not have been possible if the research team would not have had the cooperation of the mutual sector. Therefore, the research team would, besides the policy makers of the european commission , DG Enterprise, thank the following or-ganisations. First, we would like to thank the Steering Group consisting of representatives of the european associations of mutual -type organisations (AMICE: Association of mutual Insurers and Insurance Cooperatives in Europe; AIM: Association Interna-tionale de la Mutualit ), who provided valuable feedback on intermediate research reports and products.

5 Secondly, we would like to thank ICMIF (International Cooperative and mutual In-surance Federation), who provided the most up-to-date information on the market share of mutual -type insurance organisations. Thirdly, we would like to thank all those persons and organisations who have con-tributed to the Study by drawing up the country reports, providing country infor-mation, reflecting on specific national issues, and providing other input relevant to the Study . Finally, our thanks also go to Lieve Lowet, partner, ICODA european Affairs, who shared her knowledge of the mutual sector with us and helped us to sharpen the formulations in a consistent way in the country reports and chapters.

6 A full list of persons and organisations being involved in the Study can be found in the annex to this report. To conclude, we hope that this report contributes to further enhancing the knowledge base of mutual -type organisations in Europe and hence, we would like to thank the reader for taking the opportunity to read the report and learn more about mutual -type organisations in the european context. Simon Broek Senior researcher 4 5 Contents Abbreviations 7 Executive summary 9 The importance of mutual -type organisations in the european economy and society 9 Legal status of mutual -type organisations 10 Management and corporate governance of mutual -type organisations 11 Issues and barriers mutual -type organisations face in Europe 13 Recommendations 15 1 Introduction.

7 Objectives and methodology 21 Aims and objectives of the Study 21 Methodology 21 Structure of the report 22 2 Demarcation of the Study : free markets and legal types 23 Activity related demarcation: Free competition 24 Legal status related demarcation: Legal form of mutuals 29 Overview and implications 31 3 The role mutual -type organisations play in Europe: market share and coverage 37 Historical and current role of mutual -type organisations 38 Markets and market restrictions 43 mutual market share 48 Concluding remarks 55 4 Legal framework of mutual -type organisations in Europe 57 Laws applicable to mutual -type organisations: an overview 58 mutual -type organisations and a classification of their legal framework 63 Establishing a new mutual .

8 Legal frameworks 72 Additional issues concerning the legal framework 89 Concluding remarks 93 5 Management and corporate governance 95 Democratic governance 96 Financial rules 107 Disclosure: transparency and auditing 116 Concluding remarks 117 6 Issues concerning the legal status and corporate governance 119 Issues in relation to creating a mutual -type organisation 121 6 Issues in relation to merger/conversion of mutuals 125 Issues in relation to forming groupings of mutual -type organisations 129 Issues in relation to the Solvency II Directive 138 Concluding remarks 141 7 Operating across

9 Borders 143 Freedom of establishment and freedom of services 144 Operating across borders: the situation in the countries studied 145 Concluding remarks 154 8 Conclusions and recommendations 157 Conclusions 157 Recommendations 160 Annex report 165 Annex A: Overview table legal issues 167 Annex B: List of sources used 213 Annex C: List of participating experts/ respondents 215 Annex D: Companies included in the ICMIF data 221 7 Abbreviations AT Austria BE Belgium BG Bulgaria CY Cyprus CZ Czech Republic DK Denmark EE Estonia FI Finland

10 FR France DE Germany EL Greece HU Hungary IE Ireland IT Italy LV Latvia LT Lithuania LU Luxembourg MT Malta NL Netherlands PL Poland PT Portugal RO Romania SK Slovakia SI Slovenia ES Spain SE Sweden UK United