Upon entry into force of the Act of 11 September 2015 on insurance and reinsurance activity (the Act), the rules of performing insurance activity by European Union (EU) insurance companies in the territory of Poland, both under the Freedom Of Establishment (FOE) and the Freedom Of Services (FOS) basis, have been changed. Although the basic principles of performing such activity have remained unchanged, in relation to the previous act on insurance activity, the rules of supervision over EU foreign insurance companies have been significantly amended.
The amendments within FOE and FOS result mainly from the obligation to implement the provisions of the Solvency II Directive, which lays down the rules concerning the issues of establishment of branches by insurance companies or reinsurance companies, having their registered seat in EU Member States, under the FOE, and performing insurance activity in other than home EU Member States, under the FOS.
Both principles of performing insurance activity in the territory of an other than home EU Member State are connected with two rules resulting from EU legislation and jurisprudence – the rule of single-license and the rule of home Member State supervision.
These rules are, to some extent, an extension of two basic community freedoms with respect to financial markets, i.e. freedom to provide services and free movement of capital, introduced in EU legislation in 1994.
The single-license rule means the abolition of obligation to obtain permission to perform insurance activity in an EU Member State, in the territory of which an insurance company or a reinsurance company intends to perform activity, in case of holding such permission in its home EU Member State (where it has its registered seat).
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