The EU Commission has today adopted and published on its website the new insurance block exemption regulation. The current insurance block exemption expires on 31 March 2010 and the new insurance block exemption will come into force on 1 April 2010 and will remain valid until 31 March 2017.
As had been widely anticipated, the new insurance block exemption no longer exempts agreements on standard policy conditions or on security devices. The Commission concluded that neither type of agreement is specific to the insurance sector, but intends to issue some guidance in respect of those types of agreements in the revised guidelines on horizontal cooperation agreements (currently under review).
Two categories of agreement continue to be covered by the new insurance block exemption, namely those on joint compilation and distribution of certain information and those on insurance pools. However, a number of changes have been made to the conditions under which the block exemption will apply in order to ensure that only those agreements which are likely to have pro-competitive effects benefit from the block exemption.
Joint compilations, tables and studies
Agreements on cooperation in the area of joint calculations, tables and studies can be justified in certain circumstances as they make it possible to improve the knowledge of risks and facilitate the rating of risks for individual companies, which in turn facilitates market entry and benefits consumers. In renewing this aspect of the block exemption, the Commission has provided further guidance on the scope of the exchange of information covered by the block exemption. It has also attached certain conditions in order to ensure access to the data for customer and consumer organisations (subject to a public security exception) as well as for insurance companies not yet active on the relevant markets.
The Commission also accepts that there are several arguments in favour of an exemption for insurance pools, on the basis that they allow for certain types of risk to be covered which individual insurance companies might be reluctant or unable to insure on their own. The key changes to the application of the block exemption to co-insurance and co-reinsurance pools are a change to the approach to market share calculation (gross premium income earned outside the pool will now also be taken into account) and a wider definition of "new risks".
Insurance companies should carefully review their cooperation arrangements. Companies should bear in mind that any agreements that fall outside the scope of the new insurance block exemption do not necessarily infringe the competition rules - there is no presumption that agreements that do not benefit from the block exemption infringe competition law. However, companies should carry out a self-assessment exercise under Article 101 TFEU, under which they should determine whether the particular agreement infringes the competition rules and, if it does, whether it satisfies the legal exception criteria under Article 101(3) TFEU.