Last week the European Parliament unanimously adopted a report by MEP Luigi Berlinguer (S&D party) with recommendations to the EU Commission on a Statute for a European Mutual Society.
Since its withdrawal from the Commission’s legislative agenda back in 2006, a number of European Parliament reports have urged the Commission to re-table the draft legislation but MEP Berlinguer’s report is intended to put pressure on the Commission to bring forward legislation on a statute for a European Mutual Society and sets out a number of recommendations that should be included in the proposal. These are contained in an annex to the report and focus on the objectives, elements, scope and governance of a European Mutual Society.
Mutual societies can take the form of ‘mutual benefit’ (or ‘health providence’) societies or ‘mutual insurance’ societies. They play a major role in providing healthcare, social services and affordable insurance services.
Supporters of a European Mutual Society believe that a legal instrument, such as the statute is essential to ensuring the major role that mutuals play in the EU economy continues. According to statistics published in the European Parliament Library, mutuals are reported to employ 350,000 people in Europe, they represent more than €180 billion in insurance premiums and provide services to 160 million citizens and have a natural role to play in the support of existing welfare systems and the social economy.
Whilst almost 70% of the total number of insurance companies in Europe are mutual societies, the European Commission’s study on the current situation and prospects of mutual societies in the Union, indicates that mutuals experience difficulties on account of the lack of existing legal frameworks in certain member states and of the difficulty in forming alliances with other mutuals.
The current fragmented framework in which European mutuals exist presents a barrier to them reaching their full potential. A Statute for a European Mutual Society (EMS) would remove barriers to cross-border cooperation between mutual societies whilst taking account of their specific features; in particular, the fact that they operate in the general interest of their members.
Moreover, an EMS should provide a way of promoting the mutual model throughout Europe and would:
- create a level-playing field for all entrepreneurial forms and statutes
- enable cross-border and trans-national activities
- give mutuals a European legal instrument to develop their activities
The adoption of the report was welcomed by mutual insurance organisations across Europe including AMICE.
Asmo Kalpala, President of AMICE, said:
“The Members of the EP have again shown their strong support for mutuals and mutual insurance and we are most grateful for that,”
“After all, the MEPs are the representatives of the citizens. And the mutual and cooperative business model is the one that takes best care of the citizens, through its member-orientation, its governance and the commitment to use its surplus exclusively for the benefit of the member-policyholders. We are also grateful that the European Commission has launched a comprehensive consultation into possible action at the European level to foster mutuals, to support their establishment and to promote their growth in the Single Market. Things are moving at all levels – let us keep the momentum!”
Gregor Pozniak, Secretary General of AMICE said:
“Our times of a crisis of confidence, of growing uncertainty among citizens and of a constant withdrawal of the public hand from providing basic services such as health cover, call for solutions that are developed by people for people. The business model of mutual and cooperative insurance, oriented on the need of member-policyholders and democratically governed, provides the evident alternative to short-termist, profit maximising models. The European Parliament is right to request the Commission to submit proposals allowing mutuals to act at a European level and a cross-border scale.”
Lawrence Christensen, Marketing Director at ICMIF member benenden health said: ‘We are a strong supporter of a Statute for a European Mutual Society. This is because we want to promote the mutual ideal and ethos as a strong business model in today’s economic environment where consumers are looking for greater trust and ethics in their service providers."
On Monday 11 March, the European Commission has also launched a consultation on the study which ICMIF contributed to with statistics, entitled “Future prospects of mutual societies”. The consultation will look at the need for and possible advantages of the proposal for a regulation establishing a European Mutual Society (EMS).
ICMIF will reply to the consultation, which runs until Friday 14 June 2013. .
For more information on the ICMIF working group which will study the consultation, please get in touch with the ICMIF secretariat or write to Catherine Hock, Vice-President International Relations, at Catherine@icmif.org