Brussels, 24/03/2005 (Agence Europe) - European aviation insurers have undertaken to reform their practices as regards the operation of aviation insurance in order to promote more competition and transparency and to give more of a voice to customers. A Commission press released explained that, the International Underwriting Association of London and the Lloyd's Market Association are parties to the undertakings, which will enter into force immediately, binding individual insurers as members of these associations. There are three kinds of reform planned 1) Standard wording for aviation insurance policies and clauses have up until now been drawn up solely by committees of insurers. In the future, customers will also have a say in the development of published standard clauses. A new Aviation Insurance Clauses Group will grant customers far reaching rights and opportunities to participate by being consulted on proposed clauses as well as by proposing new wording, clauses or variants themselves. Publication of the Group's meeting records will help ensure transparency; 2) Also, the risk of excessive coordination between the two sets of underwriters will be reduced by the more stringent terms of reference and the clearer remit of a new Aviation Liaison Forum that replaces the present Joint Executive Committee, a body in which the two leading aviation insurers' associations meet to discuss matters of common interest; 3) A new Crisis Response Protocol aims to ensure that competition is maintained even in crisis situations, and that the minimum of disruption is caused to the normal operations of aviation insurance policyholders due to the actual or potential unavailability of adequate aviation insurance.
The undertakings were given following a Commission investigation to establish whether certain practices in the aviation insurance industry in the aftermath of 11 September 2001 were in violation of the EC Treaty's ban on restrictive business practices (Article 81). The Commission indicated that “the inquiry revealed that existing structures for cooperation among aviation insurers were impeding the market from working as well as it should, and that safeguards against excessive coordination among insurers could enhance competition”. In the light of the undertakings given, the Commission's investigation will be closed. But the Commission “will continue to monitor market developments and keep the aviation insurance market under close scrutiny”.