Now is the time for the insurance industry to sound its voice. A consultation recentlylaunched by the European Commission seeks to gather the views of stakeholders in the insurance sector on the future of the current Insurance Block Exemption Regulation.
All agreements between undertakings which have the object or effect of restricting competition on a particular market can fall foul of both EU and national competition laws. This is the case unless the parties concerned can prove that the particular agreement entered into ought to be exempted from the application of antitrust law because it satisfies certain criteria specified in the law.
The European Commission has over the years deemed it important to provide an outright exemption from the application of competition law to certain agreement categories in particular sectors. These block exemptions provide a safe harbour whereby particular types of agreements entered into between companies operating in the sector in question and satisfying all the criteria are automatically exempted from the application of competition law. This obviously does much for legal certainty in the sector concerned since undertakings in this sector can enter into such agreements with their mind at rest that they are not infringing antitrust law.
The insurance sector is one of the only three sectors which to date still benefits from such block exemptions.
The Insurance Block Exemption applies as a rule and, subject to specified conditions, to agreements between insurers which relate to the exchange of information necessary for the purpose of calculating risks.
The consultation seeks to gather views of stakeholders on the future of the current Insurance Block Exemption Regulation
Agreements relating to the calculation of the cost of covering specified risks in the past, agreements with respect to joint statistical compilations, joint tables and studies and the distribution of the related results are as a rule exempted from the application of competition law.
The same block exemption also applies, subject to certain conditions, to agreements between undertakings in the insurance sector relating to the setting-up and operation of pools of insurers or of insurers and reinsurers for the common coverage of aspecific category of risks in the form of co-insurance or co-reinsurance.
The current Insurance Block Exemption expires in March 2017. In its current consultation with stakeholders, the European Commission is ruminating over whether the insurance sector still differs sufficiently from other sectors so as to warrant the legal certainty offered by such a block exemption regime. During this consultation period which runs from August 5, 2014 till November 4, 2014, the Commission is gathering the views of stakeholders on how the block exemption is being used and their experience in applying it.
Views about market developments and views on whether the regulation should be renewed, partially renewed or not renewed at all are also welcome. The Commission will then use the information gathered to carry out an impact assessment of the policy options available and to decide whether a block exemption for the insurance sector is still necessary.
In view of the legal certainty offered by a block exemption regime, the insurance industry cannot afford to take the current consultation too lightly.
If the current block exemption system is not renewed, it could well lead to a situation where the onus of proving the non-applicability of anti-trust law to particular agreements entered into by insurance companies is shifted on to industry itself.
mariosa@vellacardona.com
Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.