Erhvervsudvalget 2021-22
ERU Alm.del
Offentligt
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European Commission
DG for Financial Stability, Financial Services and Capital Markets Union
Dir. D Regulation and prudential supervision of financial institutions
Att. Mr. Didier Millerot, Head of Unit, D4 - Insurance and Pensions
21 March 2022
Dear Mr. Millerot
We have previously reached out to you in December 2020, as Denmark is
in the process of reviewing the national regulation on ancillary activities of
insurance undertakings in respect to the interaction of the Directive
2009/138/EC (Solvency II) and of the Commission Delegated Regulation
2015/35 supplementing the Solvency II Directive.
We are thankful for the guidance you provided us with in your reply
1
. Fur-
ther, you kindly affirmed in your reply that you remain at our disposal for
further queries.
In the political process of our review of the national regulation, a further
question has arisen in regards to the treatment of industrial forestry (silvi-
cultural activities).
Article 18(1)(a) of the Solvency II Directive states that “the home Member
State shall require every undertaking for which authorisation is sought in
regard to insurance undertakings, to limit their objects to the business of
insurance and operations arising directly therefrom, to the exclusion of all
other commercial business”. Furthermore, recital 16 of the Solvency II Di-
rective states, “the main objective of insurance and reinsurance regulation
and supervision is the adequate protection of policy holders and beneficiar-
ies”.
It is our interpretation of article 18(1)(a) that industrial forestry (silvicul-
tural activities) is not an operation arising directly from the business of in-
surance. This interpretation does not limit insurance undertakings from in-
vesting in companies carrying out industrial forestry, as long as the invest-
ment is in line with the investment rules in Solvency II, i.e. articles 132-
135 and connected articles in the Solvency II regulation. This interpretation
does however limit insurance undertakings from carrying out industrial for-
estry (silvicultural activities) within the insurance undertaking itself, i.e. by
owning the forest directly and managing it industrially (or outsourcing the
management).
Article 1(53) of the Solvency II Regulation states the following definition:
“‘ancillary services undertaking’ means a non-regulated undertaking the
principal activity of which consists of owning or managing property, man-
aging data-processing services, health and care services or any other similar
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MINISTRY OF INDUSTRY,
BUSINESS AND FINANCIAL
AFFAIRS
Slotsholmsgade 10-12
1216 Copenhagen K
Denmark
Tlf.
+45 33 92 33 50
Fax.
+45 33 12 37 78
CVR-nr. 10092485
EAN nr. 5798000026001
[email protected]
www.em.dk
ARES(2021)936444 – 03/02/2021.
 ERU, Alm.del - 2021-22 - Endeligt svar på spørgsmål 272: Spm., om at oversende spørgsmålene, som ifølge Erhvervsministeriet er sendt til EU-kommissionen, til erhvervsministeren
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activity which is ancillary to the principal activity of one or more insurance
or reinsurance undertakings”.
Three questions have arisen in regards to this definition in relation to in-
dustrial forestry (silvicultural activities) and the definition of ancillary ser-
vices undertaking:
1) Can industrial forestry (silvicultural activities) be considered to fall
under the explicit mention of "managing property" in the defini-
tion?
2) If no to question one, could industrial forestry (silvicultural activi-
ties) be considered to be a "similar activity" and thus still fall under
the definition?
3) Lastly, would it be possible with reference to the general investment
rules for an insurance undertaking in any circumstance to conduct
industrial forestry (silvicultural activities) in a subsidiary, i.e. where
the insurance undertaking has a controlling interest?
In relation to question 1, our preliminary view is that industrial forestry
(silvicultural activities) entails operational risks that differentiate it from
the normal management of property, but we would appreciate your guid-
ance in the matter.
In relation to question 2, our preliminary reading of the regulation – also
based on your earlier guidance – is that industrial forestry have features that
mean it is difficult to consider it a "similar activity" ancillary to the princi-
pal activity of one or more insurance or reinsurance undertakings, but also
here we would appreciate your guidance.
In relation to question 3, our preliminary understanding is that investments
must respect both investment rules and the regulation on ancillary activi-
ties. However, we would much appreciate your guidance on this and par-
ticularly if it is possible for an insurance undertaking to invest so much in
one industrial forest company that the insurance company gains controlling
interest (thus making the industrial forestry company a subsidiary to the
insurance undertaking) without the industrial forestry company being con-
sidered an ancillary services undertaking.
Both regarding 2 and 3, our preliminary reading is based on your earlier
guidance, article 18(1)(a), and the fact that insurance undertakings should
limit their objects to the business of insurance and operations arising di-
rectly therefrom, to the exclusion of all other commercial business.
We would be grateful for any guidance you can give us in regards to your
interpretation in relation to the questions above and any other considera-
tions that the Commission may find relevant in this regard.
If needed, my services and I stand ready to answer any questions in relation
to the above that you may have.
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Yours sincerely,
Julie Sonne
Head of Division
Department of Financial Affairs
Danish Ministry of Industry, Business and Financial Affairs