C-206/98

COMMISSION V BELGIUM

OPINION OF ADVOCATE GENERAL SAGGIO delivered on 20 January 2000 *

I — Subject of the proceedings — Commu- cle 241 EC) alleging the illegality of Arti- nity and national law — Pre-litigation cle 55 of the Directive which deals with procedure compulsory insurance against accidents at work.

1. By this action the Commission is seeking a declaration from the Court that the Kingdom of Belgium is in breach of its obligations under Community law by fail- ing to implement correctly Council Direc- tive 92/49/EEC of 18 June 1992 on the 2. On this matter, I would point out that coordination of laws, regulations and Article 2 of the Directive, in defining its administrative provisions relating to direct scope, refers to First Council Directive insurance other than life assurance and 73/239/EEC of 24 July 1973 on the coor- amending Directives 73/239/EEC and dination of laws, regulations and adminis- 88/357/EEC (Third Non-life Insurance trative provisions relating to the taking-up Directive; hereinafter: 'the Directive' or and pursuit of the business of direct 'the Third Directive'). 1 The applicant insti- insurance other than life assurance. 2 Under tution contests the legality of excluding Article 2(1 )(d), the Directive docs not compulsory insurance against accidents at apply, amongst other things, to 'insurance work from the scope of the national forming part of a statutory system of social provisions transposing the Directive. In its security'. Letter A of the Annex to the defence, the Belgian Government claims Directive which classifies risks according to that this category of insurance is not classes of insurance includes under acci- included within the scope of the Directive dents 'industrial injury and occupational as the Directive expressly excludes national diseases' (no. 1). The Third Directive also social security schemes. The Belgian Gov- states in Article 55 that 'Member States ernment puts forward a plea based on may require that any insurance undertaking Article 184 of the EC Treaty (now Arti- offering, at its own risk, compulsory insur- ance against accidents at work within their

3. The national provision which, the Com- mission claims, is in conflict with Commu- nity law is Article 2 of the Belgian Law of 9 July 1975 on the control of insurance undertakings, as amended by the Royal II — Admissibility Decree of 12 August 1994. 3The provision states that the Law does not apply to various categories of undertakings, in par- ticular: mutual funds, private undertakings and public institutions providing insurance against accidents at work and occupational diseases, the last two categories in relation 5. The Belgian Government has put for- to the public sector only. ward a plea of inadmissibility, claiming that the Commission, in paragraph 15 of the application, stated that it considered as outside the scope of the Directive basic, compulsory insurance against accidents at work, and that, consequently, as the case is concerned with insurance benefits in this category, the application serves no purpose. 4. The pre-litigation procedure was initi- ated by letter of formal notice of 27 December 1995 to which the Belgian Government replied on 23 December 1996 in a letter from its Permanent Representa- tion in which it disputed the existence of any incompatibility between the Directive and its national legal provisions on acci- The Commission replies, stating that the dents at work. The Belgian Government's action concerns all compulsory insurance against accidents at work provided by private Belgian undertakings; it claims that 3 — Royal Decree of 12 August 1994 (Moniteur belge of 16 September 1994) and Decree of 22 November 1994 this insurance is incompatible with Arti- (Moniteur belge of 21 December 1994) amending the Royal cle 55 of the Directive owing to the prohi- Decree of 22 February; these constitute the national imple- menting measures for Directive 92/49. bition on foreign undertakings not estab- I - 3512

Arguments of the parties

I I I — Substance

Applicability of Directive 92/49/EEC to compulsory insurance against accidents at 7. According to the Commission, the Com- work provided by private undertakings munity legislature intended to exclude from the scope of the Directive insurance services managed or controlled by bodies forming part of a system of social security and which are operated according to the soli- 6. In order to rule on the substance of the darity principle on which these schemes are application, it is necessary to interpret generally based. It follows, according to the

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OPINION OF MR SAGGIO — CASE C-206/98

This interpretation is confirmed, according to the Commission, by Articles 1(3) and 2(4) of the First Council Directive 79/267/ EEC of 5 March 1979 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life insur- 8. The Belgian Government maintains, on ance 4 : Article 1(3) states that 'operations the contrary, that the Third Directive relating to the length of human life which should be interpreted as not covering all are prescribed by or provided for in social basic social security insurance — namely insurance legislation, when they are that insurance which constitutes the essen- effected or managed at their own risk by tial feature of the national social security assurance undertakings in accordance with system. In the area of compulsory insurance the laws of a Member State' are included against accidents at work, the Third Direc- within the scope of the Directive; under tive, and Article 55 in particular, apply Article 2(4), insurance forming part of a statutory system of social security, with the exception of insurance provided by private 5 — The Commission draws attention to the fact that the delegation to private undertakings of the management of insurance against accidents at work is to be found in other national legal systems, namely in Portugal and Denmark, where this service may also be provided by foreign under- 4 — OJ 1979 L 63, p. 1. takings.

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COMMISSION V BELGIUM

8 — The principle is set out clearly in Case 218/82 Duphar v Netherlands [1984] ECR 521, in particular paragraph 1ft, ami lomecl Cases ( 1 1 9 / 9 1 .mil ('-160/91 Voueet v Assur- ances Generales de France [1993] ECR I-637. In Poucettile Court maile the following observations on the French systems of sickness insurance ami maternity cover lor self- employetl workers in sectors olhei than agriculture ami pensions for craftsmen; tins was the national scheme of 9. Although the arguments put forward by reterence in the question for a preliminary ruling on the the two parties reach opposing conclusions, rules tlefmmg the extent of the applicability of the Community provisions: 'those schemes pursue a social each of the two arguments can be upheld in obiective ami embody the principle ot solidarity ... the part. There is no doubt that, as stated by principle of s o h d a r i t yis ... embodied in the fact that the scheme is financed by contributions proportional to the the Belgian Government, we are dealing income from the occupation and to the retirement pensions of the persons making them; only recipients ... with very here with compulsory insurance which is an modest resources are exempted from the payment of contributions, whereas the benefits are identical for all those who receive them, furthermore, persons no longer covered by the scheme retam their entitlement to benefits for a year, free of charge. Solidarity entails the redistribution of 6 — Moniteur belge, 2 July 1981. income between those who are better off ami those who, in 7 — See opinion of the Conseil D'État on the Royal Decree of view of their resources and state of health, would be 20 May 1997 amending the Rovai Decree of 21 December deprived of the necessary social cover' (see in particular 1971, Moniteur belge of 29 August 1997, p. 2214. paragraphs 8 et seq.)

single market and freedom of competition 9 asked to interpret Article 2(2) in so far as, do not in any way envisage as a further aim by referring to Article 2(1) of the First regulating national systems of social secur- Directive, it establishes that that directive ity, which remain, in accordance with does not concern insurance included in social policy measures adopted at Commu- national social security schemes. The ques- nity level, within the exclusive competence tion for a preliminary ruling had been put of the Member States. by a French court in the context of a dispute in which a number of self-employed workers were contesting the right of social security offices — responsible for mana- ging compulsory insurance schemes cover- ing retirement, sickness, maternity, invalid-

In the case in question the Court was Court, relying on the case-law cited above on the intangibility of national systems of social security, affirmed that the French 9 — I should point out here that the aim of the directive in scheme came under the concept referred to question is, as set out in the fifth recital, to require on the part of Member States 'such harmonisation as is essential, in Article 2(1) of the First Directive. It went necessary and sufficient to achieve the mutual recognition of on to say that liberalising the national authorisations and prudential control systems, thereby making it possible to grant a single authorisation valid market would have meant removing the throughout the Community and apply the principle of obligation to be affiliated to that scheme, supervision by the home Member State'. The system is based on two instruments of a general nature: the first consists of which would have had the effect of threa- the competence reserved exclusively to the authorities of the home State to issue and withdraw authorisations to operate tening its survival. an insurance business; the second requires the authorities of the State where the insurance is offered not to subject the foreign undertakings to further controls. In order for these two coordinating instruments to function properly, the directive also establishes minimum standards for authorisa- tion to be issued (see Articles 6 to 8 and Chapter II of the directive).

Furthermore, the authorities of the country of origin must provide the According to the Belgian Government, that corresponding authorities of the State where the insurance is offered with a series of documents on the financial judgment 1 1 defines the scope of the Direc- situation and the activities carried out by the undertaking concerned (Article 35). If these authorities establish that an tive, not in relation to the nature of the undertaking is not complying with the legal provisions applicable to it, they may contact the authorities of the undertakings, but in relation to the nature home Member State and, in an emergency, adopt measures of the insurance, so that the concept of of a temporary nature (Article 40). The directive permits the State where the insurance is offered to require compliance 'social security scheme' does not include all with its internal rules on clauses contained in insurance basic social insurance. This interpretation it contracts and with particular requirements such as partici- pation in schemes designed to guarantee payment of maintains, is confirmed in the Court's insurance claims or the communication of particular data or documents (see in particular Article 45(2)).

In my opinion, the Garcia judgment, which includes in the concept of a social security scheme mentioned in Article 2(1 )(d) of the In the case in point here, unlike the national First Directive the insurance provided by situation analysed by the Court in Garcia, the French social security offices, deals with we are concerned with an ambiguous insurance displaying the typical character- situation displaying only in part the intrin- istics of a social benefit, in the sense that it sic characteristics of a social security sys- is provided by a public body and governed tem; namely compulsory insurance provi- exclusively by rules of public law. That ded not only by the mutual funds forming situation is different from the one we are part of the social security system but also considering here because the insurance by private undertakings operating with a services are provided by private undertak- view to profit, without the inherent links ings within a market system and, conse- with the policy of the States on social quently, the considerations expounded by the Court on the French system cannot be applied here. In view of the obvious 14 — In (hat judgment the Court affirms that Directive 73/29 is difference between the two cases in ques- intended to facilitate the taking-up and pursuit of direct insurance other than life insurance by removing variations tion, I cannot accept the Belgian Govern- between national laws on controls and, in particular, by ment's argument that the conclusions coordinating legal provisions on the financial guarantees required of the insurance undertakings. The purpose of reached by the Court in that judgment these guarantees is to provide sufficient protection for insured persons and third parties in all Member States. The should also be transposed to this case. Council claimed that, as far as export credit insurance operations for the account of or guaranteed by the State were concerned, there was sufficient protection of the insured person, as guaranteed by the Directive, provided by the State itself [see paragraphs 15, 16 and 21) and 12 — Casc C-63/89 | 1 9 9 1 | ECR I-1799, in particular paragraph therefore properly excluded such operations from the 22. scone of the directive (judgment of 26 March 1996 Garcia 1 3— OJ 1987 L 185, p. 72. v Mutuelle de Prevoyance Sociale, ccited above).

security for workers. 15 I have already compliance with 'specific provisions of mentioned that the Belgian Government their national law . . . , except for the provi- has pointed out that, according to the sions concerning financial supervision, Belgian Conseil d'État, this compulsory which shall be the exclusive responsibility insurance constitutes a service of a social- of the home Member State'. I would add security nature. However, in my opinion, that Article 54 concerns a different cate- the definition under national law cannot gory of insurance which, while it is in have any influence on the definition of the principle covered by social security concept of social security set out in Arti- schemes, is regulated by the Directive.

12. As the Commission has stated, a first argument, of a purely literal nature, pre- cludes the insurance at issue from being regarded as excluded from the scope of the Directive. Article 55 of the Directive expressly refers to 'any insurance under- taking offering, at its own risk, compulsory 13. Apart from this argument of a literal insurance against accidents at work', and nature, which very clearly limits the scope provides that Member States may require of the concept in Article 2(1) of the First Directive, other reasons of a substantive nature linked to the specific characteristics 15 — In Case C-70/95 Sodemare v Regione Lombardia [1997] of the Belgian social security system lead to ECR 1-3395 invoked by the Commission, the Coutt stated that a national scheme such as that provided for by the the same conclusion. Legge Regionale Lombardia (Lombardy Regional Law) N o 39 of 11 April 1980 concerning the organisation and functioning of local health and welfare centres does not constitute a restriction on the freedom to provide services; the scheme allows 'only non-profit-making private opera- tors to participate in the running of its social welfare system by concluding contracts which entitle them to be reimbursed by the public authorities for the costs of providing social welfare services of a health-care nature' (paragraph 35). The Court defined this national scheme in the following terms: a 'system of social welfare, whose implementation is in principle entrusted to the public From this angle, it must first be considered authorities, is based on the principle of solidarity, as whether the Belgian compulsory insurance reflected by the fact that it is designed as a matter of priority to assist those w h o are in a state of need .

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The Law of 29 June 198 1 laying down the general principles governing the social security of employees provides in Articles 3 and 21(4) that social security includes As I have already pointed out in the allowances payable by reason to accidents introduction to my Opinion, Article 2(2) at work and occupational diseases. of the Law of 1975 on the control of insurance undertakings, as amended by the Royal Decree of 12 August 1994, imple- menting Directive 92/49, in defining the scope ratione materiale of the Law excludes 'mutual funds, private undertakings with The amount of compensation to be paid to fixed premiums 17 and public institutions in employees is established by statute (sec relation to the operations referred to: (a) by Articles 10-21 and 28-33 of the Law of the Law of 10 April 1971 on accidents at 1971) on the basis of the employee's work [and by the Law of 3 July 1967 on remuneration, while the amount of insur-

1 7 — Private undertakings 'with fixed premiums' refers to all 18 — ' t h i s information on the legislation was produced by the undertakings which are not entitled to adiust the level of Commission m paragraph 10 of the reply and was not premiums before expiry of the various contracts. disputed by the Belgian (¡overnment.

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OPINION OF MR SAGGIO — CASE C-206/98

It follows that, in carrying cle 4(7) and Article 16 of the Royal Decree out their economic activity of receiving and of 1971) and they are required to hold investing contributions for compulsory reserves in the circumstances and in accor- insurance against accidents at work, they dance with the rules established by the King do not act in conformity with criteria based (Article 52 of the Law of 1971 and Arti- on social solidarity but operate according cles 21 and 22 of the Royal Decree of to the traditional logic of schemes based on

The following can be found in the seventh paragraph: 'Lors du calcul et de some or all of the contributions. From these l'élaboration de ces tarifs, les assureurs furent laissés complètement libres, actuellement c'est encore le cas'. points of fact and of law it can be clearly 20 — In accordance with Articles 7 and 28 of the Royal Decree seen that what is concerned here is private of 1971, for authorisation to be granted, the management committee of the Fund for accidents at work must give its insurance business carried on in accordance opinion (apparently not binding); the committee is made with the classic rules of free competition, up of representatives of businesses and employees (Arti- cle 44 of the Decree). notwithstanding the fact that the services

16. Admittedly, certain characteristics of the system do appear to bring the insurance in question within the traditional pattern of 17. It remains for me to consider how the social benefits. These are the employer's rules of national law on financial manage- obligation to insure, the determination by ment, which concern authorised undertak- statute or another act of general application ings, and the possibility for foreign compa- of the rate of compensation, on the basis of nies to provide the same insurance without the income of the insured parties and, being subject to any form of prior or finally, intervention by the FAT where the subsequent control of their financial situa- employer has failed to fulfil the obligations tion by the Belgian authorities can be placed on him or where the insurance reconciled. 21 As the Directive has coordi- undertaking is in financial difficulties. nated the controls carried out by the However, I do doubt whether the presence various national authorities, the supervi- of such factors is an obstacle to applying sion of the undertakings, which is entrusted Community legislation such as the Third to the home State, should be considered Directive, which, let me point out once sufficient to protect the rights of the again, has as its aim the liberalisation of the insured parties. The fact that the controls activities of Community undertakings. carried out by the Belgian authorities arc Similarly, in interpreting the Community more rigorous than the basic controls measure from the point of view of its effects provided for by the Directive cannot lead in the national legal system, I doubt to the conclusion — arrived at, it would whether opening up the Belgian market seem, by the Belgian Government — that can in any way harm the proper function- the controls provided for in other national ing of the national insurance system. Since, legal systems are insufficient to ensure the as we have seen, the application of the provision of the insurance services at issue public-law provisions of the insurance on the part of foreign companies. To admit system do not in any way affect the free- the contrary would amount to diminishing dom of the undertaking to provide this service and to determine how it is to be provided, it cannot be jeopardised by the 21 — The- Belgian Government maintains that in order to fulfil both requirements, namely to permit foreign undertakings fact that the undertaking providing the to provide compulsory insurance against accidents at work and to enable its authorities to monitor those under- service is foreign. I would point out in this takings, national law requires them to establish a place of respect that, specifically because of Arti- business in Belgium (see m particular Article 2 of the Royal Decree of 1971). As the Commission has pointed out. such cle 55 of the Third Directive, the Belgian a requirement m itself constitutes a restriction on the freedom to provide services (see Case 205/84Commission State may require foreign undertakings to v Germany ECR 3755 on particular paragraph 52).

18. Even intervention by the FAT, where the insurance undertaking is in crisis, does not make it possible to bring insurance against accidents at work within the con- 20. This conclusion is not undermined by cept 'insurance forming part of a statutory the fact, when adopting the Second Council system of social security' as stated in Directive 88/357/EEC of 22 June 1988 on Article 2(1) of the First Directive. That the coordination of laws, regulations and intervention is intended to substitute, and administrative provisions relating to direct not to complement, that of the insurance insurance other than life assurance, 22 the undertakings. It is, in reality, a mechanism Council and the Commission inserted in it designed to provide safeguards for workers, a declaration according to which Arti- not for insurance undertakings. The under- cle 12(2) (which prohibits the application takings remain subject to the rules of of Title III only of the Directive to insur- private law which require them to carry ance against accidents at work) does not out their contractual commitments and, in require the other titles of the Directive to be particular, to pay out compensation. In the applied to Belgian insurance; Belgian insur- event of default, these undertakings are ance, however, remains subject to the subject to the standard insolvency proceed- Community coordinating rules and con- ings which enable the State and, as a result, tinues to be regarded as falling within the the FAT, as the case may be, to have recourse to their assets in order to recover compensation paid to workers. 22 — OJ 1988 L 172, p. 1.

21. It is the view of the Commission that this declaration cannot affect the applica- tion of the Directive to the circumstances of this case, essentially for two reasons. Firstly, it concerns a provision, Arti- cle 12(2) which — as can be seen from the text of the article — was reviewed by the Council and repealed by Article 37 of the Third Directive. Secondly, in any case, it is clear from the Court's case-law 24 that statements attached to the minutes of the meetings at which a measure is adopted cannot alter the content of the provisions of that measure as set out in their wording, but may only be used to confirm its Furthermore, I do not consider that the scope. 25 In this case, if one were to reference in the declaration to the general interpret Article 2 of the Third Directive rules of the First Directive on the exclusion to the effect that that directive is not of insurance forming part of 'a statutory applicable to the Belgian scheme concern- system of social security' can justify, as the ing accidents at work, this would clearly be Belgian Government maintains, the non- contrary to what is provided in Article 55, application in this case of Article 55 of the which specifically concerns compulsory Third Directive on compulsory insurance insurance against accidents at work offered against accidents at work. Apart from that by private undertakings. fact that the declaration concerns a mea- sure which preceded the Third Directive, the infringement of which is alleged, it must 23 — The declaration is worded as follows: 'The Quinci) and the Commission observe· that the first indent of Article 12(2) be observed that such a declaration was not (which excludes accidents at work from the scope of Title proposed anew with respect to Arti- III) in no way alters the fact that insurance against accidents at work, as offered in Belgium, is covered by cle 55. 26 the exclusion in Article 2(1 )(d) of the First coordinating Directive *. 24 — C a s e 429/85 Commission v ¡tah | 1 9 8 8 | HCR 843 and Case C-329/95 VAC Svenge [19071 FCR I-2675. 26 — Articles 49 and 50 of the Third Directive contain deroga * 25 — C a s e 136/78 Auer |1979] LCR 437, m particular para- turns nutoihic materute or tempons for Denmark, Spain, graph 25. Greece and Portugal.

24. The Commission puts forward two observations on this matter. Firstly, with regard to Article 55 of the EC Treaty, it points out that the Third Directive has as its legal basis Article 57(2) of the EC Treaty (now, after amendment, Article 47(2) EC) and Article 66 of the EC Treaty (now Article 55 EC) and that, consequently, the removal of restrictions on freedom of establishment and freedom to provide ser- 25. I support the Commission's arguments. vices in the non-life insurance sector is In order to grasp the significance of the regulated at secondary level, with the safeguard clause in Article 55 of the EC consequence that the only derogations Treaty in relation to a situation such as the permitted from the rules of the Directive one with which we are concerned here, it is are those expressly provided for by the necessary to begin with two points of a Directive itself. Secondly, the safeguard general order. Firstly, that provision con- clauses which appear in Article 55 of the tains a derogation from the prohibition on Treaty, according to the Court's interpreta- the introduction by Member States of tion in Thijssen in 1993, 27 are to be further restrictions on the freedom of applied restrictively as they limit the exer- establishment and freedom to provide ser- cise of fundamental rights conferred on vices, with the result that it must be strictly citizens by Community law. This argument, interpreted, the derogation applying only the Commission claims, is all the more where the activity the pursuit of which is valid in cases of exemption as envisaged in 28 — In particular Case C-157/94 Commission v Netherlands [1997] ECR I-5699, in particular paragraph 28. 27 — Case C-42/92 Thijssen v Controledienst [1993] ECR 29 — Case T-260/94 Air Inter v Commission [1997] ECR II-997, I-4047. in particular paragraph 138.

26. As regards Article 90 of the Treaty (now Article 86 EC), I shall merely point Here we have an activity which, while it out that it concerns public undertakings or has close links, by its nature and function, undertakings to which are granted special with the provision of social security ser- or exclusive rights. This case, however, is vices and therefore to the exercise of concerned with a national scheme which official authority, is carried out by private does not grant exclusive rights to any undertakings in accordance with the classic undertaking, but simply requires compa- rules of free competition. The only real nies wishing to issue insurance against reason put forward by the Belgian Govern- accidents at work to apply for authorisa- ment to justify excluding foreign under- tion to the appropriate national authorities, takings from access to this activity is the without denying foreign undertakings the impossibility, or the extreme difficulty, for possibility of making an application in those undertakings to comply with the accordance with the formal and other general obligations imposed by national requirements prescribed by national law. law and to subject themselves to the In the case in point here, the conditions controls to which authorised Belgian under- which would enable Article 90 of the takings are subject. As I have demonstrated Treaty (now Article 86 EC) to be applied earlier, the Third Directive provides are therefore not satisfied. 31 mechanisms for overcoming any difficulties

IV — Plea raised under Article 184 of the the effect of the application of the Directive EC Treaty (now Article 241 EC) and, in particular, to the safeguard which the system of controls of undertakings, as provided and regulated by the Directive, affords to the authorities of the State where the insurance is offered. I considered that this safeguard was sufficient because for- eign undertakings can, in the sector in question, help national undertakings. These 27. The Belgian Government contests the considerations led me to conclude that the legality of Article 55 of the Third Directive, Directive, and Article 55 in particular, is by expressly raising a plea to that effect, in not such as to compromise the proper the event of that provision being held to functioning of an insurance scheme against extend also to c o m p u l s o r y insurance accidents at work such as the Belgian against accidents at work. It claims in this scheme. respect that the Council has no competence to regulate this category of insurance by means of a directive such as the one at issue, which is aimed at removing restric- tions on freedom of movement. In support of its submission, the Belgian Government argues that it is impossible, given the content of the Third Directive, for the States where the insurance is offered to exercise financial supervision of foreign undertakings and, therefore, to provide appropriate safeguards to the insured par- ties. V — Costs

On this point, I would merely point out that, in accordance with settled case-law cited by the Commission, a Member State may not plead the illegality of a directive which the Commission charges it with infringing. 3 2 On the substance, I would 28. Under Article 69(2) of the Rules of refer to what I have already said as regards Procedure, the unsuccessful party is to pay the costs if applied for by the successful party. In this case, since the Commission 32 — Case C-74/91 Commission v Germany [1992] ECR has expressly applied for costs, Belgium I-5437, in particular paragraph 10 ana, concerning a should, in my opinion, be ordered to pay its decision, Case 226/87 Commission v Greece [1988] ECR 3611, in particular paragraph 14. costs.

(3) dismiss the plea of illegality raised by the Kingdom of Belgium;

(4) order the Kingdom of Belgium to pay the Commission's costs.

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