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The Directive requires that all reinsurance undertakings be authorised in their home Member State. To obtain that authorisation, they will need to meet strict requirements. Once they have done so, they will be free to carry out their activity anywhere in the EU through the single passport.
The Directive fills the gap in current European insurance legislation which does not provide for regulation of specialised reinsurers whilst activities of reinsurance carried out by direct insurers are subjected to regulation. Member States will have two years for complying with the directive, which will come into force the day after its publication in the EU official journal.