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Functioning and future of Insurance Block Exemption Regulation: Consultations
The European Commission has launched consultations to seek the views of companies on the functioning and the future of the Insurance Block Exemption Regulation No 267/2010 (IBER), which expires in March 2017. IBER exempts certain categories of agreements, decision and concerted practices between companies in the insurance sector from EU antitrust rules. Any interested party may contribute to the future of the IBER by submitting their response to questionnaires by 4 November 2014. Based on such contributions received, the European Commission will submit a report to the European Parliament and the Council by March 2016. This is an opportunity to express your views on market developments, experience of applying the IBER, ways on how the IBER should be renewed and whether a block exemption in the insurance sector is still necessary.
IBER in essence
IBER, just as any block exemption regulation, exempts certain practices from the general prohibition of anti-competitive behavior as laid down in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), provided such practices comply with the conditions set out in the regulation.
IBER envisages a sector-specific antitrust regime for two types of agreements between insurance or reinsurance companies:
(i) agreements with respect to joint compilation and distribution of information, joint construction of tables on mortality, frequency of illness, invalidity and accident, as well as studies on the probable impact of general external circumstances on frequency or scale of future claims for a given risk etc.; and
(ii) common coverage and sharing of certain types of risks (e.g. nuclear, terrorism and environmental risks), for which individual insurance companies are reluctant or unable to insure the entire risk alone. Co-insurance or co-reinsurance pools (i.e. groups set up by insurance companies whereby a certain part of a given risk is covered by a lead insurer and the remaining part of this risk is covered by follow insurers) are the most common practices in case of certain types of risks.
The above practices can be assumed with sufficient certainty to fall outside the Article 101 TFEU prohibition, if they meet certain conditions stipulated in the IBER (e.g. compilations and tables are based on assembled data and do not include in any way information regarding income, the level of commercial premiums, administrative or commercial costs or any other fiscal information, information exchanged is historical and available on reasonable and non-discriminatory terms; the companies do not exceed the market share threshold of 20 % for co-insurance pools, and 25 % for co-reinsurance pools, etc.).
Practices that meet the IBER conditions are in line with the EU competition law. At the same time, agreements which do not meet the IBER conditions cannot be presumes to be illegal. They simply must be carefully assessed under Article 101(1) of the TFEU, and if appropriate, under Article 101(3) of the TFEU.
Have a Say
Any interested party may contribute to the future of the IBER by submitting their response to questionnaires by 4 November 2014. Our Competition Law team will be glad to assist you in formulating and submitting your contributions to the European Commission in order to lobby your interests and vision of EU competition rules in the insurance sector.