Brussels, 10/07/2002 (Agence Europe) - On Tuesday in OJ C 163 The European Commission has published a draft of a revised block exemption Regulation in the insurance sector, intended to replace the existing Regulation when it expires on 31 Marh 2003. The draft introduces a number of modifications to the provisions in force to which the Commission invites comments on these from interested parties before 30 September. Following consultation of the Member States, the Commission will definitively adopt a new insurance block exemption Regulation, around the end of this year.
The current Commission regulation authorises the exemption of an anti-competition agreement which prohibits agreements which may affect trade between Member States or prevent, restict or distort competition in the common market. It fosucses on the establishment of common risk premium tariffs; the establishment of common standard policy conditions; the joint coverage of certain types of risks; the testing and acceptance of safety devices. The new draft covers the same four categories of agreements as the current Regulation. It thus does not include two further categories of agreements between insurance undertakings, which the Commission is entitled to include in its block exemption Regulation, namely agreements on claims settlement, and on registers of aggravated risks.
Indicative risk premiums. National associations of insurers in the Member States normally produce statistics on pure premiums, based on information supplied by insurers, and carry out studies on likely future trends, and calculate an indicative risk premium on that basis. The current regulation exempts this common activity under certin conditions. None of the existing conditions for exemption has been removed in the new draft. However, one condition for exemption of joint calculation of indicative risk premiums implicit in the existing Regulation as concerns pure premiums, statistics must be broken down into as much detail as is possible, while leaving a statistically useful sample. The reason for this condition is that the more statistics are broken down, the more freedom insurers have to differentiate their prices to end consumers. A further new condition for exemption is that the statistics on risk premiums be made available on reasonable and non-discriminatory terms.
Standard policy conditions. Conditions for many types of insurance policy are produced by national associations of insurance undertakings. The current regulation does not authorise any compulsory clauses comprising standard conditions; all standard conditions must be optional. Certain standard conditions ("black clauses") are prohibited even if they are optional. The Regulation grants an exemption to all standard policy conditions, on condition that they be indicative and non-binding. However, in the revised draft Regulation, standard policy conditions even those which are non-binding and not defined as "black clauses" - are only exempted if they are agreed in conjunction with the joint calculation of pure premiums and joint studies related to risk premiums, and only in so far they are both necessary and exclusively used for such calculations or studies.
Common coverage of certain types of risks (pools). Insurance pools involving a number of insurers are frequent for the coverage of large or exceptional risks are reluctant to insure the entire risk alone. The current Regulation subjects the exemption of pools to market share thresholds: 10% for co-insurance pools and 15% for co-reinsurance pools. The revised draft Regulation increases these market shares: pools will be authorised on condition that the combined market shares of their members do not exceed 20% for co-insurance pools and 25% for co-reinsurance pools. In addition, in the revised draft, a new exemption with no market share threshold applicable, is introduced for insurance pools which are newly-created in order to cover a new risk, for the first three years of their existence.
Safety Equipment. In most Member States, there are lists, drawn up by the national association of insurers on the basis of technical specifications, of approved safety equipment (alarms, anti-theft and anti-fire devices). Most insurers grant an insured party a reduction in premiums if an approved safety device is used. The current Regulation grants an exemption to the joint determination of these lists and the technical specifications (but not to any agreements concerning the use to which the lists are put, such as the granting of reduced premiums, as this is a matter for individual insurers). There are great differences from one Member State to another in the level of stringency of the technical specifications. Many safety devices are thus eligible to qualify insured parties for reductions in their premiums in certain Member States but not others. The revised draft Regulation introduces a new condition for exemption of agreements between insurers on technical specifications for security equipment. In order to qualify for the block exemption, these agreements must explicitly provide for the recognition of security devices installers or maintenance undertakings approved by a similar such national agreement in another Member State.