Contents
Judgment of the Court (Fourth Chamber)22 January 2026note(Reference for a preliminary ruling — Freedom of establishment and freedom to provide services — Single insurance market — Directive 2009/138/EC — Principle of supervision by the home Member State — Article 155 — Competencies of the supervisory authorities of the host Member State — Cooperation with the authorities of the home Member State — Insurance undertaking not complying with the legal provisions applicable in the host Member State — Provisions concerned — Regulation (EU) No 1286/2014 — Packaged retail and insurance-based investment products (PRIIPs) — Directive (EU) 2016/97 — Insurance distribution — Powers of the supervisory authorities of the host Member State to penalise the undertaking concerned — Scope)In Case C‑18/24,REQUEST for a preliminary ruling under Article 267 TFEU from the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), made by decision of 29 December 2023, received at the Court on 11 January 2024, in the proceedingsNOVIS Insurance Company, NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, NOVIS Poisťovňa a.s.vČeská národní banka,THE COURT (Fourth Chamber),composed of I. Jarukaitis (Rapporteur), President of the Chamber, M. Condinanzi and N. Jääskinen, Judges,Advocate General: M. Szpunar,Registrar: I. Illéssy, Administrator,having regard to the written procedure and further to the hearing on 6 March 2025,after considering the observations submitted on behalf of:– NOVIS Insurance Company, NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, NOVIS Poisťovňa a.s., by A. Börner, Rechtsanwalt, F. Glézl, M. Trenčan, advokáti, and S. Henrich, Rechtsanwältin,– Česká národní banka, by L. Jemelka and J. Konupková,– the Czech Government, by L. Březinová, J. Očková, M. Smolek and J. Vláčil, acting as Agents,– the Italian Government, by G. Palmieri, acting as Agent, and by M.G. Santini, avvocato dello Stato,– the Slovak Government, by E.V. Larišová and S. Ondrášiková, acting as Agents,– the European Commission, by D. Triantafyllou, P. Vanden Heede and K. Walkerová, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 5 June 2025,gives the following
Judgment
1This request for a preliminary ruling concerns the interpretation of Article 155 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ 2009 L 335, p. 1) (‘the Solvency II Directive’).
2The request has been made in proceedings between NOVIS Insurance Company, NOVIS Versicherungsgesellschaft, NOVIS Compagnia di Assicurazioni, NOVIS Poisťovňa a.s. (‘Novis’), a life insurance undertaking established in Slovakia, and the Česká národní banka (Czech National Bank, Czech Republic), which is the Czech insurance supervisory authority, concerning an administrative fine imposed by that authority on Novis on account of its failure to fulfil a number of obligations incumbent on it as an insurance undertaking with a branch in Czech territory.
Legal context
European Union law
The Solvency II Directive
3Recitals 2, 11, 14, 16 and 24 of the Solvency II Directive state:(2) In order to facilitate the taking-up and pursuit of the activities of insurance and reinsurance, it is necessary to eliminate the most serious differences between the laws of the Member States as regards the rules to which insurance and reinsurance undertakings are subject. A legal framework should therefore be provided for insurance and reinsurance undertakings to conduct insurance business throughout the internal market thus making it easier for insurance and reinsurance undertakings with head offices in the Community to cover risks and commitments situated therein.…(11) Since this Directive constitutes an essential instrument for the achievement of the internal market, insurance and reinsurance undertakings authorised in their home Member States should be allowed to pursue, throughout the Community, any or all of their activities by establishing branches or by providing services. It is therefore appropriate to bring about such harmonisation as is necessary and sufficient to achieve the mutual recognition of authorisations and supervisory systems, and thus a single authorisation which is valid throughout the Community and which allows the supervision of an undertaking to be carried out by the home Member State.…(14) The protection of policy holders presupposes that insurance and reinsurance undertakings are subject to effective solvency requirements that result in an efficient allocation of capital across the European Union. In light of market developments the current system is no longer adequate. It is therefore necessary to introduce a new regulatory framework.…(16) The main objective of insurance and reinsurance regulation and supervision is the adequate protection of policy holders and beneficiaries. The term beneficiary is intended to cover any natural or legal person who is entitled to a right under an insurance contract. Financial stability and fair and stable markets are other objectives of insurance and reinsurance regulation and supervision which should also be taken into account but should not undermine the main objective.…(24) The supervisory authorities of the home Member State should be responsible for monitoring the financial health of insurance and reinsurance undertakings. To that end, they should carry out regular reviews and evaluations.’
4Under Article 27 of that directive, headed ‘Main objective of supervision’:‘Member States shall ensure that the supervisory authorities are provided with the necessary means, and have the relevant expertise, capacity, and mandate to achieve the main objective of supervision, namely the protection of policy holders and beneficiaries.’
5Article 28 of that directive, headed ‘Financial stability and pro-cyclicality’, states, in the first paragraph thereof:‘Without prejudice to the main objective of supervision as set out in Article 27, Member States shall ensure that, in the exercise of their general duties, supervisory authorities shall duly consider the potential impact of their decisions on the stability of the financial systems concerned in the European Union, in particular in emergency situations, taking into account the information available at the relevant time.’
6Article 29 of the Solvency II Directive, headed ‘General principles of supervision’, provides, in paragraph 1 thereof:‘Supervision shall be based on a prospective and risk-based approach. It shall include the verification on a continuous basis of the proper operation of the insurance or reinsurance business and of the compliance with supervisory provisions by insurance and reinsurance undertakings.’
7Under Article 30 of that directive, headed ‘Supervisory authorities and scope of supervision’:1. The financial supervision of insurance and reinsurance undertakings, including that of the business they pursue either through branches or under the freedom to provide services, shall be the sole responsibility of the home Member State.2. Financial supervision pursuant to paragraph 1 shall include verification, with respect to the entire business of the insurance and reinsurance undertaking, of its state of solvency, of the establishment of technical provisions, of its assets and of the eligible own funds, in accordance with the rules laid down or practices followed in the home Member State under provisions adopted at Community level.…3. If the supervisory authorities of the Member State in which the risk is situated or the Member State of the commitment or, in case of a reinsurance undertaking, the supervisory authorities of the host Member State, have reason to consider that the activities of an insurance or reinsurance undertaking might affect its financial soundness, they shall inform the supervisory authorities of the home Member State of that undertaking.The supervisory authorities of the home Member State shall determine whether the undertaking is complying with the prudential principles laid down in this Directive.’
8Article 36 of that directive, headed ‘Supervisory review process’, provides:1. Member States shall ensure that the supervisory authorities review and evaluate the strategies, processes and reporting procedures which are established by the insurance and reinsurance undertakings to comply with the laws, regulations and administrative provisions adopted pursuant to this Directive.That review and evaluation shall comprise the assessment of the qualitative requirements relating to the system of governance, the assessment of the risks which the undertakings concerned face or may face and the assessment of the ability of those undertakings to assess those risks taking into account the environment in which the undertakings are operating.2.The supervisory authorities shall in particular review and evaluate compliance with the following:(a) the system of governance, including the own-risk and solvency assessment, as set out in Chapter IV, Section 2;(b) the technical provisions as set out in Chapter VI, Section 2;(c) the capital requirements as set out in Chapter VI, Sections 4 and 5;(d) the investment rules as set out in Chapter VI, Section 6;(e) the quality and quantity of own funds as set out in Chapter VI, Section 3;(f) where the insurance or reinsurance undertaking uses a full or partial internal model, on-going compliance with the requirements for full and partial internal models set out in Chapter VI, Section 4, Subsection 3.…’
9Article 144 of the Solvency II Directive, headed ‘Withdrawal of authorisation’, provides, in paragraph 1 thereof:‘The supervisory authority of the home Member State may withdraw an authorisation granted to an insurance or reinsurance undertaking in the following cases:…(b) the undertaking concerned no longer fulfils the conditions for authorisation;(c) the undertaking concerned fails seriously in its obligations under the regulations to which it is subject.…’
10Article 155 of that directive, headed ‘Insurance undertakings not complying with the legal provisions’, provides:1. Where the supervisory authorities of a host Member State establish that an insurance undertaking with a branch or pursuing business under the freedom to provide services in its territory is not complying with the legal provisions applicable to it in that Member State, they shall require the insurance undertaking concerned to remedy such irregularity.2. Where the insurance undertaking concerned fails to take the necessary action, the supervisory authorities of the Member State concerned shall inform the supervisory authorities of the home Member State accordingly.The supervisory authorities of the home Member State shall, at the earliest opportunity, take all appropriate measures to ensure that the insurance undertaking concerned remedies that irregular situation.The supervisory authorities of the home Member State shall inform the supervisory authorities of the host Member State of the measures taken.3. Where, despite the measures taken by the home Member State or because those measures prove to be inadequate or are lacking in that Member State, the insurance undertaking persists in violating the legal provisions in force in the host Member State, the supervisory authorities of the host Member State may, after informing the supervisory authorities of the home Member State, take appropriate measures to prevent or penalise further irregularities, including, in so far as is strictly necessary, preventing that undertaking from continuing to conclude new insurance contracts within the territory of the host Member State.…4. Paragraphs 1, 2 and 3 shall not affect the power of the Member States concerned to take appropriate emergency measures to prevent or penalise irregularities within their territories. That power shall include the possibility of preventing insurance undertakings from continuing to conclude new insurance contracts within their territories.5. Paragraphs 1, 2 and 3 shall not affect the power of the Member States to penalise infringements within their territories.6. Where an insurance undertaking which has committed an infringement has an establishment or possesses property in the Member State concerned, the supervisory authorities of that Member State may, in accordance with national law, apply the national administrative penalties prescribed for that infringement by way of enforcement against that establishment or property.7. Any measure adopted under paragraphs 2 to 6 involving restrictions on the conduct of insurance business must be properly reasoned and communicated to the insurance undertaking concerned.8. Insurance undertakings shall submit to the supervisory authorities of the host Member State at their request all documents requested of them for the purposes of paragraphs 1 to 7 to the extent that insurance undertakings the head office of which is in that Member State are also obliged to do so.…’
Regulation (EU) No 1286/2014
11Recital 24 of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) (OJ 2014 L 352, p. 1) states:‘This Regulation does not introduce a passport allowing for the cross-border sale or marketing of PRIIPs to retail investors, or alter existing passport arrangements for the cross-border sale or marketing of PRIIPs, if any. This Regulation does not alter the allocation of responsibilities between existing competent authorities under existing passport arrangements. Competent authorities designated by Member States for the purposes of this Regulation should therefore be consistent with those competent for the marketing of PRIIPs under an existing passport, if any. The competent authority of the Member State where the PRIIP is marketed should be responsible for supervision of the marketing of that PRIIP. The competent authority of the Member State where the product is marketed should always have the right to suspend the marketing of a PRIIP within their territory in cases of non-compliance with this Regulation.’
12Article 3(2) of that regulation is worded as follows:‘Where PRIIP manufacturers subject to this Regulation are also subject to [the Solvency II Directive], this Regulation and [that directive] shall both apply.’
13Article 6(1) of that regulation provides that:‘The key information document shall constitute pre-contractual information. It shall be accurate, fair, clear and not misleading. It shall provide key information and shall be consistent with any binding contractual documents, with the relevant parts of the offer documents and with the terms and conditions of the PRIIP.’
14Article 8(3)(c)(i) to (iv) of Regulation No 1286/2014 provides:‘The key information document shall contain the following information:…(c) under a section titled “What is this product?”, the nature and main features of the PRIIP, including:(i) the type of the PRIIP;(ii) its objectives and the means for achieving them …;(iii) a description of the type of retail investor to whom the PRIIP is intended to be marketed …;(iv) where the PRIIP offers insurance benefits, details of those insurance benefits, including the circumstances that would trigger them’.
15Chapter V of that regulation, entitled ‘Administrative penalties and other measures’, includes, inter alia, Articles 22 to 24 thereof.
16Article 22 of that regulation provides:1. Without prejudice to the supervisory powers of competent authorities and the right of Member States to provide for and impose criminal sanctions, Member States shall lay down rules establishing appropriate administrative sanctions and measures applicable to situations which constitute an infringement of this Regulation and shall take all necessary measures to ensure that they are implemented. Those sanctions and measures shall be effective, proportionate and dissuasive.Member States may decide not to lay down rules for administrative sanctions as referred to in the first subparagraph for infringements which are subject to criminal sanctions under their national law.…2. In the exercise of their powers in Article 24, competent authorities shall cooperate closely to ensure that the administrative sanctions and measures produce the results pursued by this Regulation and coordinate their action in order to avoid possible duplication and overlap when applying administrative sanctions and measures to cross-border cases.’
17Article 23 of that regulation provides:‘Competent authorities shall exercise their powers to impose sanctions in accordance with this Regulation and national law in any of the following ways:(a) directly;(b) in collaboration with other authorities;(c) under their responsibility by delegation to such authorities;(d) by application to the competent judicial authorities.’
18Under Article 24(1) to (3) of Regulation No 1286/2014:1. This article applies to infringements of Article 5(1), Articles 6 and 7, Article 8(1) to (3), Article 9, Article 10(1), Article 13(1), (3) and (4) and Articles 14 and 19.2.The competent authorities shall have the power to impose, in accordance with national law, at least the following administrative sanctions and measures:(a) an order prohibiting the marketing of a PRIIP;(b) an order suspending the marketing of a PRIIP;(c) a public warning which indicates the person responsible for, and the nature of, the infringement;(d) an order prohibiting the provision of a key information document which does not comply with the requirement of Articles 6, 7, 8 or 10 and requiring the publication of a new version of a key information document;(e) administrative fines of at least:…3. Member States may provide for additional sanctions or measures and for higher levels of administrative fines than those provided for in this Regulation.’
Directive (EU) 2016/97
19Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (OJ 2016 L 26, p. 19) lays down, inter alia, obligations on insurance intermediaries to provide advice and information when they propose the conclusion of an insurance contract.
20Recitals 5, 6, 8, 21 and 22 of that directive state:(5) Various types of persons or institutions … can distribute insurance products. Equality of treatment between operators and customer protection requires that all those persons or institutions be covered by this Directive.(6) Consumers should benefit from the same level of protection despite the differences between distribution channels. In order to guarantee that the same level of protection applies and that the consumer can benefit from comparable standards, in particular in the area of the disclosure of information, a level playing field between distributors is essential.…(8) In order to guarantee that the same level of protection applies regardless of the channel through which customers buy an insurance product, either directly from an insurance undertaking or indirectly from an intermediary, the scope of this Directive needs to cover not only insurance undertakings or intermediaries, but also other market participants who sell insurance products on an ancillary basis ……(21) In order to ensure a high quality of service and effective consumer protection, home and host Member States should closely cooperate in the enforcement of the obligations set out in this Directive. Where insurance, reinsurance or ancillary insurance intermediaries pursue business in different Member States under the freedom to provide services, the competent authority of the home Member State should be responsible for ensuring compliance with the obligations set out in this Directive with regard to the entire business within the internal market. If the competent authority of a host Member State becomes aware of any breaches of obligations occurring within its territory, it should inform the competent authority of the home Member State which should then be obliged to take the appropriate measures. Such is the case, in particular, as regards breaches of the rules on good repute, professional knowledge and competence requirements or on the conduct of business. Moreover, the competent authority of the host Member State should be entitled to intervene if the home Member State fails to take appropriate measures or if the measures taken are insufficient.(22) In the case of the establishment of a branch or a permanent presence in another Member State, it is appropriate to distribute responsibility for enforcement between home and host Member States. While responsibility for compliance with obligations affecting the business as a whole – such as the rules on professional requirements – should remain with the competent authority of the home Member State under the same regime as in the case of provision of services, the competent authority of the host Member State should assume responsibility for enforcing the rules on information requirements and conduct of business with regard to the services provided within its territory. However, if the competent authority of a host Member State becomes aware of any breaches of obligations occurring within its territory with respect to which this Directive does not confer responsibility on the host Member State, it should inform the competent authority of the home Member State which should then be obliged to take the appropriate measures. Such is the case in particular as regards breaches of the rules on good repute, professional knowledge and competence requirements. Moreover, the competent authority of the host Member State should be entitled to intervene if the home Member State fails to take appropriate measures or if the measures taken are insufficient.’
21Article 2(1) of that directive provides:‘For the purposes of this Directive:(1) “insurance distribution” means the activities of advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of insurance, of concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim, including the provision of information concerning one or more insurance contracts in accordance with criteria selected by customers through a website or other media and the compilation of an insurance product ranking list, including price and product comparison, or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract using a website or other media;…(3) “insurance intermediary” means any natural or legal person, other than an insurance or reinsurance undertaking or their employees and other than an ancillary insurance intermediary, who, for remuneration, takes up or pursues the activity of insurance distribution;…(8) “insurance distributor” means any insurance intermediary, ancillary insurance intermediary or insurance undertaking;…’
22Chapter III of Directive 2016/97, entitled ‘Freedom to provide services and freedom of establishment’, applies to any insurance distributor within the meaning of Article 2(1)(8) thereof, excluding insurance undertakings. It includes, inter alia, Articles 5, 7 and 8 of that directive.
23Article 5 of Directive 2016/97, headed ‘Breach of obligations when exercising the freedom to provide services’, is worded as follows:1. Where the competent authority of the host Member State has reason to consider that an insurance, reinsurance or ancillary insurance intermediary acting within its territory under the freedom to provide services is in breach of any obligation set out in this Directive, it shall communicate those considerations to the competent authority of the home Member State.After assessing the information received pursuant to the first subparagraph, the competent authority of the home Member State shall, where applicable, and, if so, at the earliest opportunity, take appropriate measures to remedy the situation. It shall inform the competent authority of the host Member State of any such measures taken.Where, despite the measures taken by the home Member State or because those measures prove to be inadequate or are lacking, the insurance, reinsurance or ancillary insurance intermediary persists in acting in a manner that is clearly detrimental to the interests of host Member State consumers on a large scale, or to the orderly functioning of insurance and reinsurance markets, the competent authority of the host Member State may, after informing the competent authority of the home Member State, take appropriate measures to prevent further irregularities, including, in so far as is strictly necessary, preventing that intermediary from continuing to carry on new business within its territory.…2. Paragraph 1 shall not affect the power of the host Member State to take appropriate measures to prevent or penalise irregularities committed within its territory, in a situation where immediate action is necessary in order to protect the rights of consumers. This power shall include the possibility of preventing insurance, reinsurance and ancillary insurance intermediaries from carrying out new business within its territory.…’
24Article 7 of that directive, headed ‘Division of competence between home and host Member States’, is worded as follows:1. If an insurance, reinsurance or ancillary insurance intermediary’s primary place of business is located in a Member State other than the home Member State, the competent authority of that other Member State may agree with the home Member State competent authority to act as if it were the home Member State competent authority with regard to the provisions of Chapters IV, V, VI and VII …2. The competent authority of the host Member State shall have responsibility for ensuring that the services provided by the establishment within its territory comply with the obligations laid down in Chapters V and VI and with measures adopted pursuant thereto.The competent authority of the host Member State shall have the right to examine establishment arrangements and to request such changes as are needed to enable the competent authority to enforce the obligations under Chapters V and VI and measures adopted pursuant thereto with respect to the services or activities provided by the establishment within its territory.’
25Under Article 8 of that directive, headed ‘Breach of obligations when exercising the freedom of establishment’:1. Where the competent authority of a host Member State ascertains that an insurance, reinsurance or ancillary insurance intermediary is in breach of the legal or regulatory provisions adopted in that Member State pursuant to the provisions of Chapters V and VI, that authority may take appropriate measures.2. Where the competent authority of a host Member State has reason to consider that an insurance, reinsurance or ancillary insurance intermediary acting within its territory through an establishment is in breach of any obligation set out in this Directive, and where that competent authority does not have responsibility in accordance with Article 7(2), it shall refer those findings to the competent authority of the home Member State. After assessing the information received, the competent authority of the home Member State shall, where applicable and, if so, at the earliest opportunity take appropriate measures to remedy the situation. It shall inform the competent authority of the host Member State of any such measures taken.3. Where, despite the measures taken by the home Member State or because those measures prove to be inadequate or are lacking, the insurance, reinsurance or ancillary insurance intermediary persists in acting in a manner that is clearly detrimental to the interests of host Member State consumers on a large scale, or to the orderly functioning of insurance and reinsurance markets, the competent authority of the host Member State may, after informing the competent authority of the home Member State, take appropriate measures to prevent further irregularities, including, in so far as is strictly necessary, preventing that intermediary from continuing to carry on new business within its territory.…4. Paragraphs 2 and 3 shall not affect the power of the host Member State to take appropriate and non-discriminatory measures to prevent or penalise irregularities committed within its territory, in situations where immediate action is strictly necessary, in order to protect the rights of consumers of the host Member State, and where equivalent measures of the home Member State are inadequate or lacking. In such situations, the host Member State shall have the possibility of preventing the insurance, reinsurance or ancillary insurance intermediary concerned from carrying out new business within its territory.…’
Czech law
Law No 277/2009
26Paragraph 110 of zákon č. 277/2009 Sb., o pojišťovnictví (Law No 277/2009 on insurance) transposes into the Czech legal order Article 155 of the Solvency II Directive. Under that provision:1. Should the Czech National Bank find that an insurance undertaking from another Member State pursuing insurance or reinsurance activities in the territory of the Czech Republic under its right to set up branches or provide services on a temporary basis does not fulfil the obligations that apply to such activities in the Czech Republic, it shall require that insurance undertaking to remedy the deficiencies within a period set by the Czech National Bank.2. For the purpose of establishing or verifying the facts referred to in paragraph 1, the Czech National Bank may request such an insurance undertaking to provide the necessary documents, information and explanations concerning its activities in the territory of the Czech Republic, and the insurance undertaking shall be obliged to comply with such requests.3. Should an insurance undertaking from another Member State fail to remedy the deficiencies referred to in subparagraph 1 within the time limit specified, the Czech National Bank shall inform the supervisory authority of the home Member State of that fact.4. If remedial measures imposed by the supervisory authority of the home Member State do not remedy the deficiencies identified in the activities of an insurance undertaking from another Member State, or if no remedial measures have been imposed, the Czech National Bank shall impose on such an insurance undertaking a fine or a ban on entering into new insurance or reinsurance agreements within the territory of the Czech Republic, and on extending obligations from any such agreements already concluded. The Czech National Bank shall inform the supervisory authority of the home Member State of that decision. At the same time, the Czech National Bank may refer the matter to the European Supervisory Authority, requesting its assistance.5. In urgent cases, the Czech National Bank shall proceed in accordance with subparagraph 4, without applying the procedure set out in subparagraphs 1 to 3.’
Law No 170/2018
27Zákon č. 170/2018 SB., o distribuci pojištění a zajištění (Law No 170/2018 on insurance and reinsurance distribution) transposes Directive 2016/97 into the Czech legal order by laying down the obligations on insurance and reinsurance undertakings and insurance intermediaries.
The dispute in the main proceedings and the questions referred for a preliminary ruling
28During the period from 23 April 2014 to 5 June 2023, Novis pursued business in the territory of the Czech Republic through a branch established in Prague.
29On 15 September 2020, the Czech National Bank found Novis guilty of three infringements and imposed on it an administrative fine of 1000000 Czech koruny (CZK) (approximately EUR 39610).
30The first infringement found against Novis lay in its failure to comply with the obligations laid down in Article 6(1), Article 8(3)(c)(ii), (iii) and (iv) and Article 8(3)(f) of Regulation No 1286/2014, since it had failed to ensure, first, that the information in the key information documents it had drawn up was accurate, fair, clear, consistent with any binding contractual documents and not misleading and, second, that those documents contained all the information required by the applicable legislation, to the required level of quality and accuracy.
31The other two infringements found against Novis consisted of the failure to observe two obligations under Law No 170/2018, namely, first, the obligation to lay down, maintain and apply rules for monitoring the activities of independent intermediaries acting on its behalf and, second, the obligation to provide advice to the customer prior to the conclusion of an insurance contract with a savings component.
32Novis lodged an administrative appeal against the decision of 15 September 2020, claiming that the Czech National Bank could not impose a fine on it without following the procedure laid down in Paragraph 110 of Law No 277/2009, which requires it to have first informed the supervisory authority of the home Member State of the alleged infringements and given that authority the opportunity to take appropriate measures. According to Novis, failure to comply with that procedure deprived the Czech National Bank of the power to penalise it.
33Following the dismissal of that administrative appeal, Novis brought an action for judicial review before the Městský soud v Praze (Prague City Court, Czech Republic), which dismissed that action by a judgment of 19 October 2022.
34Novis brought an appeal on a point of law against that judgment before the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), which is the referring court.
35The referring court is uncertain whether the procedure laid down in Article 155 of the Solvency II Directive applies only where the supervisory authority of the Member State of the branch or of the provision of services is exercising the financial supervision of insurance undertakings, in accordance with Article 30 of that directive, or whether that procedure applies more broadly to that authority’s verification of compliance with all the provisions of EU law governing the status and activities of insurance undertakings.
36The referring court is of the view that Article 155(1) of the Solvency II Directive, which provides for the intervention of the supervisory authorities of the host Member State where an insurance undertaking ‘is not complying with the legal provisions applicable to it in that Member State’, lends itself to two different interpretations.
37According to the first interpretation, the only national provisions concerned are those which transpose into national law the substantive requirements arising from the Solvency II Directive. It would follow from such an interpretation that the procedure laid down in Article 155 of that directive does not apply to the monitoring of compliance with obligations arising from other instruments of EU law, such as Regulation No 1286/2014 or Directive 2016/97.
38That interpretation is supported by the context of Article 155 of the Solvency II Directive, in particular the provisions of Article 30 of that directive, which governs the scope of supervision. That article specifies, in paragraph 1 thereof, that it is a ‘financial’ supervision, and indicates, in paragraph 2 thereof, that that supervision includes ‘verification, with respect to the entire business of the … undertaking, of its state of solvency, of the establishment of technical provisions, of its assets and of the eligible own funds’. Article 36 of that directive also supports that interpretation, since it provides, in paragraph 1 thereof, that the supervision concerns strategies, processes and reporting procedures which are established by the insurance and reinsurance undertakings to comply ‘with the laws, regulations and administrative provisions adopted pursuant to this Directive’. Paragraph 2 of that Article 36 lists a series of requirements to be monitored, all of which relate to the financial soundness of insurance or reinsurance undertakings. Articles 27 and 28 as well as Article 29(1) of the Solvency II Directive also support such an interpretation since they state, respectively, that the main objective of supervision is to ‘ensure … the protection of policy holders and beneficiaries’, that, without prejudice to that main objective, the supervisory authorities are to consider the potential impact of their decisions on the ‘stability of the financial systems concerned in the European Union’ and that supervision is based on a ‘prospective and risk-based approach’.
39Lastly, that interpretation is borne out by the preamble to the Solvency II Directive, in particular by recital 14 thereof, which states that the protection of policyholders presupposes that insurance and reinsurance undertakings are subject to effective solvency requirements, and by recital 24 of that directive, which states that the supervisory authorities of the home Member State should be responsible for monitoring the financial health of those undertakings.
40However, the referring court considers that a second interpretation – to the effect that the wording of Article 155(1) of the Solvency II Directive refers not only to the national provisions transposing that directive, but to all provisions relating to the status and activities of insurance undertakings, including those arising from other EU legal provisions, such as Regulation No 1286/2014 or Directive 2016/97 – cannot be ruled out. On the basis of that interpretation, the procedure laid down in Article 155 of the Solvency II Directive would apply to all supervisory activities carried out by national authorities in relation to insurance and reinsurance undertakings.
41Such an interpretation is supported by recital 11 of the Solvency II Directive, which states that that directive constitutes an essential instrument for the achievement of the internal market and that it is appropriate to bring about harmonisation in order to ensure the mutual recognition of authorisations and supervisory systems, and thus a single authorisation which is valid throughout the European Union and which allows the supervision of an undertaking to be carried out by the home Member State.
42The referring court states that it is aware of the judgment of 28 April 2009, Commission v Italy (C‑518/06, EU:C:2009:270), in paragraph 115 of which the Court held that the principle of supervision by the home Member State ‘extends only to the financial supervision of insurance undertakings’. However, in its view, the solution adopted in that judgment regarding the interpretation of Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance Directive) (OJ 1992 L 228, p. 1) cannot be applied to the Solvency II Directive.
43In the event that the Court considers that Article 155 of the Solvency II Directive also covers the monitoring of compliance with the obligations laid down in Regulation No 1286/2014 or arising from Directive 2016/97, the referring court asks, in the alternative, whether, where the authority of the host Member State intends to impose penalties for infringements committed within the territory of that Member State, as permitted by paragraphs 5 and 6 of that article, that authority is entitled to act directly, without first carrying out the procedure referred to in paragraphs 1 to 3 of that article, or if that authority is required, rather, first to have recourse to that procedure, including by informing the competent authority of the home Member State so that the latter may take appropriate measures.
44The referring court notes, in support of that second interpretation, that paragraph 3 of Article 155 of the Solvency II Directive refers to the adoption of appropriate measures ‘to prevent or penalise’ irregularities, which suggests that the procedure laid down in paragraphs 1 to 3 of that article applies not only to the adoption of preventive measures, but also to the adoption of penal measures.
45However, the referring court observes that the wording of Article 155(5) and (6) of the Solvency II Directive supports the first interpretation, since paragraph 5 of that article states that paragraphs 1 to 3 of that article ‘shall not affect the power of the Member States to penalise infringements within their territories’ and paragraph 6 of that article provides that the supervisory authorities of the host Member State may ‘apply the national administrative penalties’ prescribed for the infringement committed by an insurance undertaking which has an establishment or possesses property in that Member State.
46The referring court considers that the latter interpretation is supported by the solution adopted by the Court in paragraph 120 of the judgment of 28 April 2009, Commission v Italy (C‑518/06, EU:C:2009:270), with regard to Article 40(7) of Directive 92/49. In that judgment, the Court confirmed the competence of the host Member State to penalise infringements committed within its territory, without making the exercise of that power subject to the prior exhaustion of the notification and remedial procedure provided for in Article 40(3) to (5) of that directive. The referring court is of the view, however, that the judgment of 27 April 2017, Onix Asigurări (C‑559/15, EU:C:2017:316), does not provide an answer in that regard, since that judgment relates exclusively to the emergency power of the Member States concerned to take protective measures on the basis of Article 40(6) of Directive 92/49.
47In those circumstances, the Nejvyšší správní soud (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Must Article 155 of [the Solvency II Directive] be interpreted such that it also applies to cases of supervision by the supervisory authority of a host State over compliance, by an insurance undertaking from another Member State, with the obligations laid down by Regulation No 1286/2014 … or based on Directive 2016/97…?(2) If so, does Article 155 of the Solvency II Directive imply priority powers for the supervisory authority of the home State, and the obligation on the part of the supervisory authority of the host State to first exhaust the notification and remedial procedures under paragraphs 1, 2, and 3 of that article …, even in the case of imposing administrative [penalties] under paragraphs 5 and 6 of that article …?’
Consideration of the questions referred
The first question
48By its first question, the referring court asks, in essence, whether Article 155 of the Solvency II Directive must be interpreted as meaning that the procedure for cooperation between the supervisory authority of the host Member State and the supervisory authority of the home Member State laid down in that article applies to a situation in which the supervisory authority of the host Member State finds that an insurance undertaking pursuing business in its territory either through a branch or under the freedom to provide services is not complying with its obligations under Regulation No 1286/2014 or the national provisions transposing Directive 2016/97 into the legal order of that Member State.
49According to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgments of 17 November 1983, Merck, 292/82, EU:C:1983:335, paragraph 12, and of 10 July 2025, Sánchez Romero Carvajal Jabugo, C‑322/24, EU:C:2025:556, paragraph 35 and the case-law cited).
50As regards the wording of Article 155 of the Solvency II Directive, which defines the respective powers and obligations of the supervisory authorities of the host Member State and of the home Member State where insurance undertakings with a branch or pursuing business under the freedom to provide services in the territory of that Member State fail to fulfil their obligations, it is apparent from paragraph 1 of that article that the obligation on the supervisory authorities of the host Member State to require the insurance undertaking concerned to remedy the irregularity established applies where that undertaking is not complying with ‘the legal provisions applicable to it in that Member State’. Furthermore, paragraph 3 of that article, which authorises those supervisory authorities to take appropriate measures where the home Member State does not adopt measures or where the measures it adopts prove to be inadequate, applies where the insurance undertaking persists in infringing ‘the legal provisions in force in the host Member State’.
51It should therefore be noted, first of all, that both paragraph 1 and paragraph 3 of Article 155 of the Solvency II Directive refer, in general terms, to all the national provisions applicable to insurance undertakings in the host Member State, with the result that it cannot be inferred from paragraphs 1 and 3 of that article that the EU legislature intended to limit the scope of the procedure for cooperation between supervisory authorities provided for in that article solely to cases of infringement of the national provisions implementing the Solvency II Directive.
52Next, it should be noted that the same general wording is to be found in the other language versions of Article 155 of that directive and, in particular, as regards paragraph 1 of that article, in the Spanish- (‘las disposiciones legales de este Estado miembro que le sean aplicables’), German- (‘in diesem Mitgliedstaat für das Versicherungsunternehmen geltenden Vorschriften’), French- (‘les dispositions légales de cet État membre qui lui sont applicables’), Italian- (‘le norme di diritto dello stesso ad essa applicabili’), Lithuanian- (‘jai toje valstybėje narėje taikomų teisinių nuostatų’), Finnish- (‘tässä jäsenvaltiossa siihen sovellettavia säännöksiä’) and Swedish-language version (‘de rättsregler som är tillämpliga på företaget i denna medlemsstat’).
53That literal interpretation is supported both by the context of Article 155 of that directive and by the objectives pursued by the rules of which that provision forms part.
54As regards the context of that provision, it should be noted, first, that it forms part of Chapter VIII, entitled ‘Right of establishment and freedom to provide services’, of Title I of the Solvency II Directive. That chapter contains provisions which specifically govern the conditions for the pursuit of business by insurance or reinsurance undertakings under the freedom of establishment or under the freedom to provide services.
55However, the pursuit of insurance activities under the freedom of establishment or the freedom to provide services is also referred to in Article 30 of the Solvency II Directive, which appears in Chapter III, entitled ‘Supervisory authorities and general rules’, of Title I of that directive. Paragraph 1 of that article provides that the financial supervision of insurance and reinsurance undertakings, including that of the business they pursue either through branches or under the freedom to provide services, is to be the sole responsibility of the home Member State. Moreover, paragraph 3 of that article states that if the supervisory authorities of the Member State in which the risk is situated or the Member State of the commitment or, in the case of a reinsurance undertaking, the supervisory authorities of the host Member State, have reason to consider that the activities of an insurance or reinsurance undertaking might affect its financial soundness, they are to inform the supervisory authorities of the home Member State of that undertaking, which are to determine whether the undertaking is complying with the prudential principles laid down in that directive.
56In those circumstances, it must be held that, as the Advocate General noted in point 44 of his Opinion, Article 30(1) and (3) and Article 155 of the Solvency II Directive have the same purpose, which is to define the respective powers and obligations of each of the supervisory authorities concerned in the case of cross-border insurance activities, which permits the inference that those provisions must have different scopes, in order to avoid a situation in which a single legal act contains provisions governing the same issue differently. It is clear from Article 30(1) of the Solvency II Directive that that article applies only to the ‘financial supervision’ of insurance undertakings, which is the sole responsibility of the home Member State, implying that Article 155 has a broader scope.
57Second, it should be noted that, while Article 30(1) of the Solvency II Directive establishes the principle that the financial supervision of insurance and reinsurance undertakings is the sole responsibility of the home Member State, Article 29(1) of that directive states, in general terms, that the supervision of those undertakings includes the verification on a continuous basis of the proper operation of the insurance business. Furthermore, Article 144(1)(b) and (c) of that directive allows the supervisory authority of the home Member State to withdraw an authorisation granted to an insurance or reinsurance undertaking not only where the undertaking concerned no longer fulfils the conditions for authorisation but also where it fails seriously in its obligations ‘under the regulations to which it is subject’.
58It is apparent from those provisions that that directive thus gives primacy to the principle of supervision of insurance undertakings by the home Member State, as the Court has already held in relation to Directive 92/49, which was replaced by the Solvency II Directive (judgment of 27 April 2017, Onix Asigurări, C‑559/15, EU:C:2017:316, paragraph 52). Moreover, it follows from the broad interpretation of Article 29(1) of the Solvency II Directive postulated by the general wording of that provision that the supervisory authorities of the home Member State are accorded not only exclusive competence to ensure the financial supervision of insurance undertakings but also a power, exercised jointly with the supervisory authorities of the host Member State, in order to ensure, more broadly, in accordance with that provision, the supervision of the proper operation of the insurance or reinsurance business.
59As regards the objectives of the Solvency II Directive, it is apparent from recitals 2 and 11 of that directive that it seeks to facilitate the taking-up and pursuit of the activities of insurance and reinsurance, while providing a legal framework intended to enable insurance undertakings authorised in their home Member State to pursue their activities throughout the internal market by establishing branches or by providing services.
60In addition, the Solvency II Directive seeks, as is apparent from recitals 14 and 16 thereof, to ensure the adequate protection of policyholders and beneficiaries, which, as stated in the latter recital, is the ‘main objective’ of insurance and reinsurance regulation and supervision – financial stability and fair and stable markets being other objectives of insurance and reinsurance regulation and supervision which should also be taken into account ‘but should not undermine the main objective’. The importance of that objective is, moreover, confirmed by Article 27 of that directive, which establishes the protection of policyholders and beneficiaries as the ‘main objective’ of the supervision of insurance undertakings.
61However, the objective of facilitating the taking-up and pursuit of insurance activities throughout the European Union, under the freedom of establishment or the freedom to provide services, as referred to in paragraph 59 of the present judgment, could be compromised if the supervisory authorities of the host Member State were able, when they identify an infringement by an insurance undertaking of the regulations to which it is subject, to take any measures against that undertaking without any coordination with the supervisory authority of the home Member State which issued the prior authorisation allowing, in principle, that undertaking to pursue its activities throughout the European Union.
62Moreover, it is consistent with the objective of adequate protection of policyholders and beneficiaries, as set out in paragraph 60 of the present judgment, to provide for a cooperation mechanism that enables the supervisory authority of the home Member State to be informed when an insurance undertaking, operating in the territory of that host Member State through a branch or under the freedom to provide services, fails in its obligations under the regulations to which it is subject. Indeed, where an insurance undertaking operating in more than one Member State fails seriously in its obligations, only the supervisory authority of the home Member State is entitled, under Article 144(1)(c) of the Solvency II Directive, to withdraw the authorisation it has granted to it and, therefore, to ensure adequate protection for policyholders and beneficiaries throughout the European Union.
63It thus follows both from the wording of Article 155 of the Solvency II Directive and from its context and the objectives pursued by that directive that the concept of ‘legal provisions [of] the host Member State’, compliance with which can be verified by the supervisory authority of the host Member State only in the context of the procedure for cooperation between the authorities provided for in that article, cannot be interpreted narrowly in a way that limits its scope solely to national provisions transposing, into the domestic legal order, the requirements arising from that directive.
64That broad interpretation of the scope of the procedure for cooperation between the supervisory authority of the host Member State and the supervisory authority of the home Member State, provided for in Article 155 of the Solvency II Directive, is not called into question by the case-law arising from the judgment of 28 April 2009, Commission v Italy (C‑518/06, EU:C:2009:270). Although, in paragraph 115 of that judgment, which was handed down in the context of an action for failure to fulfil obligations, the Court held that, under Directive 92/49, the principle of exclusive supervision by the home Member State extended only to the financial supervision of insurance undertakings, it is apparent from paragraph 120 of that judgment that the Court also found, as regards Article 40 of that directive, the provisions of which were reproduced in largely identical terms in Article 155 of the Solvency II Directive, that the European Commission had not criticised the Italian Republic for having disregarded the obligations laid down in paragraphs 3 to 5 of that Article 40. The Court therefore took the view that it was not required to rule on the scope of those provisions in order to rule on the action for failure to fulfil obligations. In addition, also in paragraph 120 of that judgment, it found, for the sake of completeness, that Article 40(7) of that directive confirmed the power of the host Member State to penalise infringements committed within its territory.
65It follows that Article 155 of the Solvency II Directive must be interpreted as applying, in principle, to any situation in which the supervisory authority of the host Member State finds that an insurance undertaking with a branch or pursuing business under the freedom to provide services in its territory is not complying with its obligations, including where those obligations arise from provisions other than the provisions of that directive, unless, however, another provision of EU law expressly derogates from the rules on the division of powers and cooperation between the competent authorities laid down in that article.
66In so far as the referring court raises the question of the interpretation of that article in the context of an insurance undertaking’s infringement of the provisions of Regulation No 1286/2014 and those adopted pursuant to Directive 2016/97, it is necessary to ascertain whether that regulation and that directive contain provisions which expressly derogate from Article 155 of the Solvency II Directive.
67As regards, first, Regulation No 1286/2014, the Commission maintained at the hearing, that that regulation derogated from the application of Article 155 of the Solvency II Directive. In support of that argument, it noted that recital 24 of that regulation states that the competent authority of the Member State where the PRIIP is marketed should be responsible for supervision of the marketing of that PRIIP.
68However, it should be noted that the content of recital 24 of Regulation No 1286/2014 was not reproduced in any of the provisions of that regulation, with the result that it cannot be inferred from that recital that the EU legislature had any intention to derogate from the application of Article 155 of the Solvency II Directive. In any event, it must be borne in mind that according to settled case-law, while the preamble to an EU act may explain the content of the provisions of that act and provides elements of interpretation which are likely to clarify the intention of the author of that act, it has no binding legal value and cannot be relied upon to derogate from the provisions of the act itself or to interpret those provisions in a manner contrary to their wording (judgment of 21 March 2024, LEA, C‑10/22, EU:C:2024:254, paragraph 51 and the case-law cited).
69Moreover, Article 3(2) of Regulation No 1286/2014 expressly provides that where PRIIP manufacturers subject to that regulation are also subject to the Solvency II Directive, that regulation and that directive both apply. Regulation No 1286/2014 does not contain any provision which expressly derogates from that principle of cumulative application as regards Article 155 of the Solvency II Directive. In that regard, it must be noted that Article 22(1) of that regulation merely states that, ‘without prejudice to the supervisory powers of competent authorities and the right of Member States to provide for and impose criminal sanctions’, Member States must lay down rules establishing appropriate administrative sanctions and measures applicable to situations which constitute an infringement of that regulation. Furthermore, Article 23 of Regulation No 1286/2014 provides for several ways in which the competent authorities may exercise the sanctioning powers defined in Article 24 of that regulation, without specifically referring to the marketing of PRIIPs under the freedom to provide services or the freedom of establishment and, in any event, specifically providing for the possibility of cooperation between competent authorities.
70As regards, second, Directive 2016/97, it should be noted that Chapter III of that directive contains provisions which determine the conditions for the carrying on of intermediary activities under the rules on the freedom to provide services and the freedom of establishment. Among those provisions, Articles 5, 7 and 8 of that directive define the respective competences, powers and obligations of the competent authorities of the host Member State and of the competent authorities of the home Member State where an infringement of the obligations laid down in that directive is established. However, the provisions of that chapter apply only to insurance, reinsurance or ancillary insurance intermediaries, to the exclusion of insurance undertakings, which therefore remain subject, in the absence of express derogation, to the provisions of the Solvency II Directive and, in particular, to Article 155 of that directive, including when they carry on insurance distribution activities, as defined in Article 2(1)(1) of Directive 2016/97.
71Against that background, failure to apply the cooperation procedure laid down in Article 155 of the Solvency II Directive in the event that an insurance undertaking fails to fulfil its obligations under Directive 2016/97 would have the effect of exempting those authorities from any obligation to cooperate in the context of the supervision of the insurance distribution activities carried out by an insurance undertaking, even though those authorities are under such an obligation when they supervise the activities of insurance intermediaries within the meaning of Article 2(1)(3) of that directive. Such a difference in the methods of supervising insurance distribution activities does not appear to be consistent with the objectives of equal treatment of operators and consumer protection irrespective of the distribution channel, which are set out in recitals 5, 6 and 8 of Directive 2016/97, or with the general objective of close cooperation and shared responsibility between the competent authorities, as described in recitals 21 and 22 thereof.
72In the light of the foregoing considerations, the answer to the first question is that Article 155 of the Solvency II Directive must be interpreted as meaning that the procedure for cooperation between the supervisory authority of the host Member State and the supervisory authority of the home Member State laid down in that article applies to a situation in which the supervisory authority of the host Member State finds that an insurance undertaking operating in its territory either through a branch or under the freedom to provide services is not complying with its obligations under Regulation No 1286/2014 or the national provisions transposing Directive 2016/97 into the legal order of that Member State.
The second question
73By its second question, the referring court asks, in essence, whether Article 155 of the Solvency II Directive must be interpreted as meaning that the supervisory authorities of the host Member State are required to comply with the procedure laid down in paragraphs 1 to 3 of that article when they impose, pursuant to paragraphs 5 and 6 of that article, penalties on an insurance undertaking operating in the territory of that Member State either through a branch or under the freedom to provide services.
74By that question, the referring court seeks to ascertain whether the application of administrative financial penalties, such as those imposed in the main proceedings by the Czech National Bank on Novis for infringements of Regulation No 1286/2014 and of the national provisions adopted pursuant to Directive 2016/97, is subject to the prior implementation of the procedure laid down in paragraphs 1 to 3 of Article 155 of the Solvency II Directive, or whether those penalties may be imposed directly by the competent authorities of the host Member State.
75In order to answer that question, it is necessary to interpret the words ‘paragraphs 1, 2 and 3 shall not affect the power of the Member States’, which appear in paragraph 5 of that Article 155, noting that that wording is identical to that used in paragraph 4 of that article. In the context of the interpretation of Article 40(6) of Directive 92/49, the wording of which was reproduced in Article 155(4) of the Solvency II Directive, the Court has held that that wording must be understood as derogation from the ordinary procedure referred to in Article 40(4) and (5) of Directive 92/49, exempting the Member State of the provision of services concerned from the obligation to notify the competent authorities of the home Member State and the obligation to inform them of its intention to take appropriate measures (see, to that effect, judgment of 27 April 2017, Onix Asigurări, C‑559/15, EU:C:2017:316, paragraph 47). Even though the power conferred on the Member States under paragraph 5 of Article 155 of the Solvency II Directive cannot be confused with the power that is conferred on them by paragraph 4 of that article only in cases of emergency, there is no reason to interpret those two provisions, which begin with identical wording, differently. Therefore, it must be held that Article 155(5) of the Solvency II Directive derogates from the ordinary procedure referred to in Article 155(1) to (3), in that it relieves the competent authorities of the host Member State, when they impose penalties for infringements committed within their territory, of the obligation to inform the authorities of the home Member State and, in the event that those authorities fail to act or where the measures adopted are inadequate, of the obligation to notify them of their intention to take appropriate measures.
76The contrary interpretation suggested by the Commission, to the effect that Article 155(5) of the Solvency II Directive does not constitute a derogation from the cooperation procedure but merely confirms the power of the Member States, without distinguishing between the host Member State and the home Member State, to impose penalties for infringements committed within their territory provided that they comply with the cooperation procedure referred to in Article 155(1) to (3), would deprive the provisions of Article 155(5) of all normative scope. If the EU legislature had intended to make the possibility for the host Member State to impose penalties on an insurance undertaking which has failed to fulfil its obligations subject to compliance with that procedure, it could have expressly provided for that by stating, in Article 155(5), that paragraphs 1 to 3 of that article also apply where the host Member State exercises its power to impose penalties for infringements committed within its territory.
77Furthermore, in so far as the procedure laid down in Article 155(1) to (3) of that directive is triggered on the initiative of the supervisory authorities of the host Member State in the event that an insurance undertaking fails to comply with the obligations applicable in that Member State, it cannot be intended to govern the exercise by the home Member State of its powers to impose penalties on an insurance undertaking which fails to fulfil its obligations in that Member State. Therefore, contrary to what the Commission maintains, Article 155(5) of that directive cannot apply to the powers of the home Member State to impose penalties.
78Article 155(5) of the Solvency II Directive must therefore be interpreted as meaning that that provision allows the host Member State to impose penalties for infringements committed within its territory without it being necessary first to exhaust the procedure referred to in paragraphs 1 to 3 of that article.
79That interpretation is confirmed by Article 155(6) of that directive, which provides for the possibility for the supervisory authorities of the Member State concerned to apply the national administrative penalties by way of enforcement against the insurance undertaking’s establishment in that Member State or property which it owns in that Member State.
80Nevertheless, Article 155(5) of that directive cannot be interpreted as allowing the host Member State to derogate from the exclusive responsibility of the home Member State in order to rule on an insurance undertaking’s compliance with the conditions of authorisation, the supervision of which is the sole responsibility of the home Member State (see, to that effect, judgment of 27 April 2017, Onix Asigurări, C‑559/15, EU:C:2017:316, paragraph 49).
81It follows, first, that the derogation laid down in that article must be interpreted as meaning that it cannot apply to failures of an insurance undertaking to comply with the conditions for authorisation, the penalising of which is the sole responsibility of the home Member State.
82Second, although it is apparent from Article 155(7) of the Solvency II Directive that a measure adopted under, inter alia, paragraphs 5 and 6 of that article may involve restrictions on the conduct of insurance business, the fact remains that the exclusive competence of the home Member State to grant or withdraw authorisation means that the penalties imposed by the host Member State on an insurance undertaking cannot have the same scope as a withdrawal of authorisation in that Member State. It follows that those measures may not have the purpose or effect of depriving the insurance undertaking concerned of any right to pursue business in the territory of that Member State.
83In the light of all the foregoing considerations, the answer to the second question is that Article 155 of the Solvency II Directive must be interpreted as meaning that the supervisory authorities of the host Member State are not required to comply with the procedure laid down in paragraphs 1 to 3 of that article when they impose, pursuant to paragraphs 5 and 6 of that article, penalties on an insurance undertaking pursuing business in the territory of that Member State either through a branch or under the freedom to provide services, provided that the penalties imposed by that State on that insurance undertaking are not intended to penalise non-compliance with the conditions of authorisation and that those penalties have neither the purpose nor the effect of depriving that insurance undertaking of its right to pursue business in the territory of that Member State.
Costs
84Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Fourth Chamber) hereby rules:
1.Article 155 of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)must be interpreted as meaning that the procedure for cooperation between the supervisory authority of the host Member State and the supervisory authority of the home Member State laid down in that article applies to a situation in which the supervisory authority of the host Member State finds that an insurance undertaking pursuing business in its territory either through a branch or under the freedom to provide services is not complying with its obligations under Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs), or the national provisions transposing Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, into the legal order of that Member State.
2.Article 155 of Directive 2009/138must be interpreted as meaning that the supervisory authorities of the host Member State are not required to comply with the procedure laid down in paragraphs 1 to 3 of that article when they impose, pursuant to paragraphs 5 and 6 of that article, penalties on an insurance undertaking pursuing business in the territory of that Member State either through a branch or under the freedom to provide services, provided that the penalties imposed by that State on that insurance undertaking are not intended to penalise non-compliance with the conditions of authorisation and that those penalties have neither the purpose nor the effect of depriving that insurance undertaking of its right to pursue business in the territory of that Member State.
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