Licence requirement in respect of group insurance
In some cases, organisations that are policyholders with an insurer and offer insurance to customers from that insurer ('group insurance policies’), for example transport companies, are subject to a licence from the AFM when they act as an ‘insurance intermediary’. A licence requirement applies if your organisation offers certain options and/or receives a remuneration from customers. A decision tree may help determine whether or not you are subject to the licence requirement.
What is a group insurance?
Group insurance refers to an insurance contract between a policyholder and an insurer, where the policyholder can add several persons or companies as insured parties to the policy. For example, consider a relocation company that offers insurance for the actual day of relocation. When insured parties join a group insurance:
• the policyholder registers the insured party with the insurer, specifying their characteristics;
• the insured party pays the insurance premium (with or without a profit mark-up) to the policyholder.
An insured party can join a group insurance policy either automatically or after having chosen to do so (non-automatic group insurance). The latter case is precisely where the licence requirement comes in.
When does a licence requirement apply?
When does a licence requirement apply?
You are subject to a licence requirement if you offer a group insurance policy that meets both of the two following conditions.
There is:
1. an option to choose
2. a remuneration
What is an 'option to choose'?
If an insured party has a choice whether to be insured or not, this is referred to as an option to choose. Similarly, the offer of certain additional options or, conversely, the cancellation of options within the insurance offered is seen as an option to choose.
Examples of an option to choose:
• If a standard cover for a group insurance policy offers options, e.g. options for extended cover, legal assistance cover, insuring the term and/or additional risk.
• If an insured party can choose between one or more insurers where the policyholder can take out insurance.
What is a 'remuneration'?
Remuneration comes into play if the policyholder reaps financial benefits. This does not extend to passing on premiums and (administrative) costs. We do not consider this to be remuneration. We also see that many group insurance policies are offered as a ‘service’ to customers. We believe that there is no remuneration if the ‘service’ is offered without any financial advantage.
In reference to the Insurance Distribution Directive (Article 2(1)(9)), the European Court of Justice formulated the term ‘remuneration’ as follows in its judgment:
‘Any commission, fee, charge or other payment, including an economic benefit of any kind or any other financial or non-financial advantage or incentive offered or given in respect of insurance distribution activities’.
In short: if an insured party is given options by the policyholder and/or the policyholder charges more than just the premium and costs, the policyholder becomes subject to a licence requirement.
When does a requirement not apply?
An exception to the licence requirement exists if you meet the requirements as stated in Section 7 of the Exemption Regulations under the Financial Supervision Act (Vrijstellingsregeling Wft). Examples include a limited premium or if the insurance complements the product or service. If the aforementioned applies to you, you are exempt from the licence requirement. More information on this regulation (in Dutch only).
Licence application to act as an intermediary in relation to insurance
Should you come to the conclusion that you require a licence for your services, we will give you ample time to submit the application. The deadline for having the necessary licence is set at 1 October 2025. Information on how to apply for a licence and the associated costs is available on the AFM website. Please note that it may take at least 13 weeks to complete the licence application process. We advise you to submit your application for a licence in time if you wish to be sure of having a licence by 1 October 2025.
Judgment of the Court of Justice
The amended rules in the matter of group insurance were arrived at by a judgment of the Court of Justice of the European Union. On 29 September 2022, the Court ruled that activities with regard to group insurance policies may in certain cases be subject to a licence requirement. This judgment by the European Court of Justice set out criteria for determining in which situations insurance mediation takes place and hence a licence requirement applies in the case of group insurance.