Despite the signing of the Treaty of Rome some 30 years ago, EEC insurance markets remain to a considerable extent partitioned along national lines. This continuing insulation of national markets is on the face of it somewhat surprising, given the fact that the fundamental freedoms enshrined in the Treaty, notably the freedom of establishment and the freedom to provide services, have been directly applicable in the Member States since the end of the transitional period, i.e., from 1 January 1970. However, as will be explained below, the exercise of these freedoms has been rendered extremely difficult, especially with regard to the provision of cross-border insurance services, and it should be noted that these difficulties are only partly explained by the singular nature of the insurance business itself. It was in an attempt to overcome the impasse in the liberalization of inter alia the insurance sector that the Commission instituted its 1992 internal market programme, which essentially seeks to achieve a real common market in which persons, goods, services and capital may move freely without restriction throughout the EEC. As a result of this programme, certain legislation has been proposed and/or adopted in the insurance field with the aim of securing meaningful liberalization in this sector. This legislation suffers from certain inherent limitations and, even though further legislation is presently being considered, it is somewhat optimistic to expect that there will be a single insurance market by 1992 or even for some years thereafter. However, the destabilizing effect on present market structures and products of the EEC legislation adopted or proposed, however incomplete, should not be underestimated. These matters will now be discussed.

1. The European Court of Justice (ECJ) has declared repeatedly that, from the end of the transitional period provided for by the Treaty (i.e., from 1 January 1970), the freedom of establishment2 and the freedom to provide ser-