EU insurance exemption rules under review

A consultation on the future of the EU insurance block exemption has been launched by the European Commission.

The Insurance Block Exemption Regulation (Regulation 358/2003) (BER)—which exempts from EU competition rules certain forms of co-operation between insurers—expires on 31 March 2010.

Peter Crowther, partner in the London officer of Dewey & LeBoeuf, says that even though the BER provides valuable guidance to the insurance industry, it is no secret that the Commission is seriously questioning whether the insurance sector continues to need a sector-specific exemption from the EU competition rules.

He says: “In a public hearing in Brussels in 2006, the Competition Commissioner Neelie Kroes herself had already indicated she was not currently persuaded that a renewal was justified.”

Since 1992, he says, the insurance industry has benefited from the specific block exemption from Art 81(1) in respect of establishment of standard policy conditions, exchange of certain statistical information, the creation of insurance pools, and specification of security devices.

If the BER is not renewed, he says, practices previously falling under the BER would not automatically be prohibited; companies would instead be required to assess for themselves whether their agreements and practices are compatible with Art 81.