CEA argues for full renewal of the Insurance BER

03 June 2009
by eub2 -- last modified 03 June 2009

CEA urges EC to include standard policy conditions and security devices in the Block Exemption Regulation (BER) renewal.

The CEA, the European insurance and reinsurance federation, has submitted its comments on the European Commission's Report on the functioning of the Insurance Block Exemption Regulation (BER) that was published on 24 March 2009. In its response the CEA sets out in detail why the insurance industry strongly believes that all four areas currently exempted by the BER need to be renewed when the current BER expires in 2010.

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

The CEA sent its comments ahead of the EC public hearing on the Insurance BER, which was held today and in which it participated.

In its response, the CEA welcomes the preliminary conclusions of the EC Report which support the renewal of the Insurance BER for joint calculations, tables and studies and for insurance pools, but with amendments. The CEA calls on the Commission to ensure that the renewed BER allows the current level of cooperation in these fields to be maintained; cooperation that the Commission recognises as positive both for competition and for consumers.

However, the CEA strongly disagrees with the Commission's proposal not to renew the sections of the BER on standard policy conditions (SPCs) and security devices. In both areas, the Commission proposes issuing guidance rather than renewing the BER.

"Contrary to the BER, guidance or guidelines are not legally binding," said Michaela Koller, director general of the CEA.  "It is very likely that the legal uncertainty created by a non-renewal of these exemptions would lead to a significant drop in cooperation in these fields, to the detriment of insurance buyers."

The CEA therefore urges the Commission to reassess its preliminary conclusions in these two areas and to renew the exemption for SPCs and security devices.

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 on 24 March 2009 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.

Today's public hearing organised by the Commission heard further representations on its report and working document. If the Commission 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 EUR 1,122bn, employ one million people and invest more than EUR 7,200bn in the economy.

CEA - the European insurance and reinsurance federation