taxud/2414/08 - European Commission - Europa

(6) insurance against financial loss
These policies usually cover substantial risks; they can protect persons against various
risks of financial losses. For example, insurance might cover the failure of a creditor to
pay money it owes to the insured, performance risks of financial products or the risk of a
person to fail in performing its obligations under a contract; they include financial loss
and inconvenience risks insurance supplied within a block insurance policy; such
policies cover cases where a taxable person, not being an insurer, procures for his
customers who are the insured, in the context of a block policy of which he is the holder,
insurance cover from an insurer who assumes the risk covered;
(7) retrocession, co-insurance and pooling of insurance or reinsurance
Reinsurances usually provide policies to other insurance companies, allowing them to
reduce their risks and protect themselves from very large losses. Such policies may also
involve retrocession, which is the transfer of the entire risk to a reinsurance company.
Vice versa a reinsurer may also be a direct writer of insurance risks as well. Reinsurance
can cover a proportion or all of the risk or it can just cover claims over a certain amount.
Such services include the pooling of insurances for huge risks. Within such a pool
suppliers of insurance usually underwrite for a certain percentage of the risk or for a
specific amount. However, it may also happen that a supplier of insurance opts to cover
certain risks alone because he is specialised in these risks. In such pooling scenarios
usually one insurance company takes the lead;
There are other services which are not explicitly resolved by the provisions of the
Regulation and which have been discussed with Member States for verifying how the
rules are to be applied:
(8) extension of the warranty claim period for supplied goods
In accordance with national law the producers or suppliers of goods have warranty
obligations in respect of the buyers of goods; often the warranty period is contractually
extended beyond the period provided for by law and the question arises whether such
extensions represent the supply of insurance services. In the view of DG Taxud, such
extensions are usually insurance services, where they cover a risk and fulfil the other
conditions of Article 135a (1). Such a risk could – for example – be the engine failure of
a car engine where the benefit consists of the insurance provider taking over the cost for
changing or repairing the engine and/ or reimbursing the costs for a replacement car for
the time the damaged engine is repaired or exchanged.
(9) Insurance against risks resulting from the failure to meet production deadlines
In various industries (inter alia in the film industry) contracts provide for serious
penalties for non-performance or breach of contracts (e.g.: non-timely production of a
film, the exceeding of production budget thresholds etc.); contracts which partly or
wholly transfer the risk of having to pay these penalties cover in the view of DG Taxud a
risk and involve the supply of insurance services where they fulfil the other conditions of
Article 135a (1).
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