EC consultation on insurance block exemption
A consultation on the insurance block exemption regulation (BER) has been announced by the European Commission. The regulation grants an exemption to the application of competition rules to certain types of agreements in the insurance sector, such as agreements on:
>> Joint calculations, tables and studies
>> Standard policy conditions and models on profits
>> Common coverage of certain types of risks (pools)
>> Security devices and safety equipment.
The regulation, implemented in 2002, was due to expire in March 2010. The consultation’s focus is primarily one of information gathering, although it will also examine the grounds for justifying the block exemption of certain types of agreements in the insurance sector.
In a statement, competition commissioner Neelie Kroes said: “We need to investigate how the insurance block exemption is working in practice and whether or not there are sufficient grounds to renew it. Sector-specific competition regulations are exceptional legal instruments. If there are to be special rules for a particular sector, I need to be convinced that they are justified in terms of bringing real benefits to competition and to consumers.”
The areas of particular interest to the Commission are:
>> Whether or not the BER is being used, where and why
>> Whether or not the business risks or other issues in the insurance sector make it special and different to other sectors that operate without a BER
>> Whether or not the BER gives rise to any anti-competitive effects that harm consumers, such as higher prices or reduced supply of certain insurance products >> Whether or not operation of the insurance sector without a BER would lead to a heavier burden on supervisory authorities and competition law enforcement.
In addition to the consultation, detailed questionnaires will be distributed to key stakeholders, public regulatory and competition authorities and consumer organisations. The EU national competition authorities will be involved closely in the review. Withdrawal of the insurance block exemption could lead to the requirement to assess agreements under Article 81 rather than under the BER.
The deadline for responses is 17 July, after which the Commission will draft a report and conduct an impact assessment. The Consultation Paper is published on the Commission’s website at: http://ec.europa.eu/comm/competition/sectors/financial_services/insurance.
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