An insurer wishing to transfer (part of) its portfolio to another insurer needs prior permission from De Nederlandsche Bank (DNB). That also goes for a portfolio transfer which ensues from a planned merger or a divestiture. In the event of a non-life insurance, the insurer may also opt to ask every policyholder for their approval.
The request for permission must be addressed to DNB in writing. It should provide insight into the financial position of both the transferring and the acquiring insurer. The law explicitly states that DNB shall not give permission if the acquiring insurer does not meet the solvency requirements.
In its assessment of the request, DNB takes into account the interests of the policyholders of both the transferring insurer and the acquiring insurer. It also looks at compliance with the solvency requirements at the time of the transfer, expectations for the future, and possible changes to the risk profile ensuing from the combination of the two portfolios. This may result in the reinsurance programme of the acquiring insurer having to be changed.
If DNB does not raise objections to the planned transfer, the intention must be published in the Staatscourant (Dutch Government Gazette) and several daily newspapers and trade journals to inform the policyholders concerned. The policyholders of a non-life insurer are given three months during which they can cancel their insurance in writing with effect from the ninetieth day of that period; the prepaid premium is then returned. The policyholders of a life insurer can protest within a specified period set by DNB. If one quarter or more of policyholders do so, the transfer cannot take place. When the protest period runs out without there having been sufficient protest, the insurer will publish DNB's permission in the Staatscourant (Dutch Government Gazette).