On 12 October 2020, a legislative proposal was submitted to the Dutch Parliament in connection with the introduction of a ban on the provision of cross-border services by third country insurers.

Traditionally, the Netherlands has allowed life and non-life insurers with their registered office in a third country to provide their services in the Netherlands. Currently, before such insurers may start to provide that service, they must demonstrate that they are authorised to conduct their insurance business in their own jurisdiction and that they meet capital requirements which are comparable to the ones applicable to Dutch insurers. However, in recent years more and more requirements have been imposed on Dutch and other EU insurers, including requirements for business operations, integrity and governance, which are believed to be stricter than requirements applicable in most third countries. As a result, a level playing field between third country insurers operating on a cross-border basis and EU and Dutch insurers is no longer guaranteed. In addition, it is difficult to verify the requirements that apply to insurers in third countries, which means that the supervision of third country insurers depends entirely on the regulators in the third country concerned. Furthermore, cooperation agreements with third country regulators are limited, which means that the Dutch regulators are limited in their options to protect Dutch policyholders against third country insurers.

In light of the above, the draft legislative act proposes that third country life and non-life insurers may no longer provide their services in the Netherlands without first obtaining the required licence (for which purpose they would need to establish a branch office or subsidiary in the Netherlands). In other words, the notification process for third country insurers laid down in Article 2:45 of the Act on the Financial Supervision (Wet op het financieel toezicht, AFS) will cease to exist. This brings the insurance rules in the Netherlands in this regard in line with those of other EU Member States, which already have such a ban.

The above will also mean that in case of a hard Brexit (where the EU and UK do not agree a free trade agreement at the end of the transition period), insurers with their registered office in the UK that want to continue to provide their services in the Netherlands in 2021 will need to establish a branch office or subsidiary in the Netherlands (or another EU Member State) and obtain a licence. According to the public register of DNB, there are currently 170 insurers with registered offices in the UK that provide services to the Netherlands on the basis of Article 2:45 AFS.

The above will not apply to the provision of services in the Netherlands by third country reinsurers. In other words, third country reinsurers will still be able to carry on their reinsurance business in the Netherlands provided that the conditions of Article 2:45 AFS are met.