Directive 1991/674 - Annual accounts and consolidated accounts of insurance undertakings - Main contents

Summary of Legislation
Legislative text

1. Summary of Legislation

Insurance companies: annual accounts

SUMMARY OF:

Directive 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings

WHAT IS THE AIM OF THE DIRECTIVE?

It aims to ensure that the balance sheets of all EU insurance companies have the same layout and the same item headings in order to ensure comparability.

KEY POINTS

The directive applies to all insurance companies or firms except small mutual associations not carrying out insurance business.

It complemented the Fourth Council Directive (Directive 78/660/EEC) on annual accounts of companies with limited liability which has since been repealed and replaced by Directive 2013/34/EU (annual and consolidated financial statements and related reports of certain types of undertakings).

Even if national accounting standards may differ across EU countries, the directive prescribes certain basic information in the interests of greater comparability of consolidated accounts. To this end, the content of the various balance sheet items is determined precisely.

To provide a proper understanding of the financial situation of an insurance companies, the current value of investments, as well as their value based upon the principle of the purchase price or production cost, must be disclosed; disclosure of the current value of investments is also required.

For life assurance provisions use may be made of actuarial methods which may be laid down in national law and with due regard for the actuarial principles recognised.

Lastly, for the calculation of the provision for claims outstanding, any implicit discounting or deduction is prohibited. On the other hand, in the interests of prudence and transparency, precise conditions for recourse to explicit discounting or deduction are defined.

To adapt accounting disclosures to insurance business models, certain requirements are set out relating to the content of the notes on the accounts, e.g. gross premiums broken down by category of activity (accident and health, motor, fire, etc.) and by geographical market.

It must be possible to obtain a copy of accounts and annual reports upon request at a price not exceeding their administrative cost.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 23 December 1991 and had to become law in the EU countries by 1 January 1994.

MAIN DOCUMENT

Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (OJ L 374, 31.12.1991, pp.7-31)

Successive amendments to Directive 91/674/EEC have been incorporated into the original document. This consolidated version is of documentary value only.

2. Legislative text

Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings

Contents

1.

Summary of Legislation

2.

Legislative text