Directorate General for Competition of the European
Commission ("DGCOMP") recently launched a public
consultation on the sector's current exemption from
competition rules (known as the "block exemption
Regulation" or "BER").
Competition Commissioner Kroes stated that its purpose is to
assess "whether there are sufficient grounds to
renew" the BER.
The final report published in September 2007 by the European
Commission on its inquiry into competition in the business
insurance sector already indicated that exemption may no longer
be justified when the BER expires in March 2010.
This briefing sets out details of the public consultation
and comments on its objectives and how market operators should
present their views.
The European Commission has indicated that, to date, it has
not received compelling arguments from industry to justify
renewal. The preliminary view is that the non-renewal of the
BER should not affect the business practices that the BER
Under a 2003 antitrust reform package, businesses have to
self-assess whether their business practices comply with EC
competition rules. In this regard, DGCOMP has increasingly
perceived sector specific regulations as an anachronism;
compared to other industries, there appears to be no need for
special antitrust treatment of the insurance sector.
Scope of the Commission's review
The European Commission's consultation seeks information
from insurers and stakeholders on how the business practices of
the industry would be affected without a block exemption. If
the industry can provide convincing evidence that the
withdrawal of the block exemption is likely to discourage the
industry from entering into legitimate cooperative agreements,
then the Commission will be prepared to engage a debate on the
extension of the block exemption. Industry contributions to the
questions set out by the Commission in its paper launching the
consultation should thus enable the Commission to balance the
economic efficiencies and consumer benefits brought about by
the BER against any anticompetitive deficiencies.
While the consultation does not seek to erase 15 years of
experience of legitimate cooperation among insurers in the
matters covered by the BER, i.e. joint calculation of pure
premiums, standard/model terms and conditions, insurance pools,
and security devices, the Commission's review should
nevertheless focus on the substantive aspects of these