Victory for Skandia in EC Court of Justice

New victory for Skandia in European Court of Justice - "five per cent rule" declared invalid In a decision announced today in plenary session, the European Court of Justice ruled that Sweden's so-called five per cent rule is in violation of EC law. Since EC law takes precedence over Swedish law, the European Court of Justice's ruling has immediate effect in Sweden. The five per cent rule, which was adopted in 1948, entailed that for investment purposes, Swedish insurance companies could not own more than five per cent of the voting rights in another limited liability company. The rule has discriminated against Swedish insurance companies in relation to foreign insurance companies and has also restricted the supply of venture capital primarily for small and medium-sized companies. For many years the Swedish insurance industry has argued for an abolishment of the five per cent rule, but nothing came of this until Skandia began pursuing the matter as a pilot case in the European Court of Justice. Skandia's president and chief executive officer, Lars-Eric Petersson, comments: "It is unfortunate that we must go all the way to the European Court of Justice in order to obtain business rules that are internationally competitive. In other contexts, too, we will turn to the European Court for rulings on Swedish legislation if we believe it will benefit our shareholders and policyholders." Skandia's general counsel, Jan-Mikael Bexhed, who has represented Skandia in the European Court of Justice, comments: "As a result of Sweden's membership of the European Union, Swedish law is now rapidly conforming to European practice. In many respects, this entails improved legal protection for individuals. The European Court's ruling shows that it is high time to begin taking EC law seriously in Sweden." In a ruling last year, on Skandia's initiative, the European Court of Justice invalidated Sweden's excise tax on foreign life assurance premiums. It was the first time an international court invalidated an exclusively Swedish tax law, and as a result of the ruling, the Swedish tax authorities were forced to repay all taxes charged. For further information, please contact: Lars-Eric Petersson, President and CEO, tel. +46-8-788 12 86 Jan-Mikael Bexhed, General Counsel, tel. +46-8-788 37 22 or 46-70-583 37 22 Birgitta Hammarström, Press Officer, tel. +46-8-788 27 55 Skandia Insurance Company Ltd S-103 50 Stockholm Telephone +46-8-788 10 00 Telefax +46-8-788 30 80 http://www.skandia.se Office: Sveavägen 44 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/04/20/19990420BIT00120/bit0001.doc http://www.bit.se/bitonline/1999/04/20/19990420BIT00120/bit0002.pdf