The European Commission has published for consultation its revised draft block exemption for the insurance sector, following a detailed review of the sector and the application of the current insurance block exemption.
The approach taken by the European Commission in its draft broadly reflects its proposals of March this year (see our earlier law now), namely:
- No renewal of the exemption for the establishment of non-binding standard policy conditions;
- No renewal of the exemption for agreements on security devices;
- Renewal of the exemptions for information exchange and insurance pools, subject to certain amendments.
Key changes the Commission suggests to the exemption for information exchange are:
- an amendment of the term to "joint compilations, tables and studies"
- exchange of information only where it is "necessary"
- access to data shared for interested third parties such as consumer organisations, with a public security exception.
Key changes the Commission suggests to the exemption for pools are:
- a change to the approach to market share calculation in order to bring it into line with other general and sector-specific competition rules
- a rise in the flexibility percentage for market share thresholds by 3%
- an amendment to the definition of "new risks".
While industry may welcome the renewal of protection for pools and information exchange, the Commission has emphasised that it intends to be "tougher on monitoring and enforcement to ensure compliance with the rules".
The Commission found that standard policy conditions and agreements on security devices are not specific to the insurance industry. It also found that standard policy conditions are found in other sectors, such as the banking sector, without the need for a specific block exemption and that security devices and their installation fall into the general domain of standard setting. It is helpful to remember that these issues will not necessarily become illegal if the Commission's plans for the block exemption are followed. Rather a regular competition analysis will be necessary. This will consider whether the particular arrangements do actually comprise a restriction of competition, whether any other block exemption could apply (e.g. the vertical agreements block exemption) and/or whether the particular arrangement merits an individual exemption.
Comments on the Commission's revised draft block exemption for the insurance sector are requested by 30 November 2009. The European Commission has noted that in particular it seeks comments on the expanded definition of new risks, the anticipated functioning of the exemption for pools and the public security exception for access to results of information exchanged.
The current block exemption for the insurance sector expires on 31 March 2010, at which time the new block exemption, however it eventually looks following this consultation, will take over. This consultation is the last chance to play a part in shaping the new competition landscape for insurers.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 06/10/2009.