EU: Revised Draft Block Exemption Regulation (BER) for Insurance Sector

On 5 October the European Commission (the Commission) published its revised draft BER for the insurance sector.

The current insurance BER, which will expire on 31 March 2010, exempts certain agreements between insurance companies from the EC Treaty's ban on restrictive business practices (Article 81). The four categories of agreements currently covered by the BER relate to the establishment of non-binding standard policy conditions; the exchange of statistical information for the calculation of risks; the creation and operation of insurance pools; and agreements on security devices.

The revised draft BER closely follows the Commission's initial report published in March 2009. It proposes to renew two of the four categories of agreements currently exempted by the BER, namely information exchange and insurance pools, with certain amendments. The new BER would no longer cover the remaining two categories of agreements, the establishment of non-binding policy conditions and agreements on security devices, which means that it will be up to firms to self-assess whether they fall foul of Article 81 or are covered by an exemption.

Significantly, the revised draft BER has reduced the circumstances in which insurance pools will be able to claim the benefit of the BER. While the market share thresholds below which pools that have existed for over three years may benefit from the BER have remained the same, the Commission has changed the way in which market share is calculated. The revised draft BER takes into account not only the market share of the pool itself, but also any activities of the pool participants in the market outside the pool. The new definition of pools also clarifies that the BER does not cover ad-hoc co-insurance or co-reinsurance involving a leader and follwers in the subscription market.

The Commission is inviting comments on the revised draft BER by 30 November 2009.

Comments can be e-mailed to comp-greffe-antitrust@ec.europa.eu quoting the reference"HT.1221 – stakeholder input".