This means that life insurers can operate across the European Economic Area (EEA) and that contracts can be underwritten in a different country from the one in which the risk is located.
But members of the Association of International Life Offices (Ailo) are concerned about the behaviour of jurisdictions like Spain and Italy.
Both have started asking firms to provide information around suspicious activities, such as money laundering.
In addition, they are also asking companies to hire local representatives.
Ailo members have hit back, saying that these measures duplicate existing practices and would be costly.
There are also concerns that these requirements could spread to other member states, which would be even more expensive for them.
A protectionist stance
The moves by Spain and Italy could benefit domestic players, and make things more difficult for cross-border providers, as Inge de Wolf, general counsel for Swiss Life suggested to International Adviser.
“[The complaint] supports the general need of clarification from Eipoa on the growing number of requirements some EEA member states impose on insurance companies operating on the [freedom to provide services] basis in Europe.
“This tendency starts to look strongly like protectionist measures and are out of proportion with General Good requirements member states can seek to protect.”
Swiss Life is an Ailo member but did not participated in the complaint.
Regulators share information, so why should insurers?
The crux of Ailo’s argument is that these companies already cooperate with the regulator in their home country. The watchdogs are in contact with each other, meaning that any and all relevant information should be shared via that channel.
John Beaney, legal and regulatory executive at Ailo, said to IA: “All insurers have to provide information on suspicious activity to the Spanish authorities and have someone in Spain to do that function for them.
“In Spain you have to have a tax representative acting on your behalf.”
He argued that information would have to be passed to this representative by the life company, “which is an added cost for us, when we already do that with our own regulator”.
“We argue that regulators should be cooperating since they already have the ability to share information.”
IA reached out to Eiopa but did not receive a comment by the time of publication.