CEA welcomes EC support for renewal of elements of the Insurance BER

The CEA, the European insurance and reinsurance federation, welcomes the preliminary conclusions in the report published today by the European Commission that support the renewal of the Insurance Block Exemption Regulation (BER) for insurance pools and for joint calculations, tables and studies. The CEA is disappointed, however, that the Commission is not minded to support the renewal of the BER for standard policy conditions and security devices.

The Insurance BER defines areas in which certain cooperation agreements in the insurance sector are exempt from EU competition law.

The Commission recommends renewal of the BER for insurers' cooperation on calculations, tables and studies, possibly with some redrafting. It also supports renewal of the BER for insurance pools, albeit with significant amendments.

"We are pleased that the Commission has recognised that in these two areas the BER helps insurers to generate efficiencies through legitimate cooperation," said Michaela Koller, director general of the CEA.

However, the CEA disagrees with the Commission's proposal not to renew the sections of the BER that would enable insurers to jointly establish and distribute non-binding standard policy conditions or to cooperate in providing specifications for security devices. In both areas, the Commission proposes issuing guidance rather than renewing the BER.

"Without the legal certainty that the BER provides, there would likely be a significant drop in such cooperation, to the detriment of insurance buyers," said Koller. "While we recognise the value of the Commission's proposed guidance, we would urge the Commission to reassess its preliminary position during the forthcoming consultation."

The use of standard policy conditions helps to create transparency in the insurance market by developing the comparability of products to customers' benefit. The security devices exemption enables the creation of specifications that help customers - consumers and small businesses - to choose the best security equipment available in terms of loss prevention.

Background

The BER for the insurance sector sets out the conditions under which insurance companies can cooperate in the fields of joint calculations and studies, standard policy conditions, insurance pools and security devices, without infringing EU competition law. The BER was last renewed in 2003 and is due to expire on 31 March 2010.

The report to the European Parliament and Council that was issued today by the Directorate General for Competition of the European Commission was accompanied by a working document detailing the Commission's preliminary conclusions on the functioning of the BER and its proposals for amendments.

The Commission will now hold a public hearing on 2 June to hear further representations on its report and working document. If it then decides to renew any parts of the BER, it will consult on a draft regulation. If it decides not to renew any part of the BER, it will publish a communication before the end of 2009.

The CEA is the European insurance and reinsurance federation. Through its 33 member bodies, the national insurance associations, the CEA represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs. The CEA, which is based in Brussels, represents undertakings that account for approximately 94% of total European premium income. Insurance makes a major contribution to Europe’s economic growth and development. European insurers generate premium income of €1 122bn, employ one million people and invest more than EUR 7,200bn in the economy.