On 31 March 2017, the Insurance Block Exemption Regulation, under which arrangements on collection and distribution of data and on common coverage of risks (such as consortia) have been exempt if they comply with the conditions it lays down, will expire. From 1 April, to check their compliance with competition law, it will be incumbent on insurers to carry out their own assessment of such arrangements.
Article 101(1) of the Treaty on the Functioning of the European Union ('TFEU') prohibits anticompetitive agreements, but under Article 101(3) agreements are 'exempt' and thus permitted, where the benefits and efficiencies outweigh anticompetitive effects. This is a matter of individual assessment by the parties.
Summary of the IBER
Since 1992 there has been a 'block exemption', currently the EU Insurance Block Exemption Regulation 267/2010 ('IBER'), whereby certain types of agreements have been exempt, provided the conditions of the IBER are satisfied. On 31 March 2017, the IBER will expire. In summary, this has granted an exemption to:
(i) arrangements between insurers on the collection and distribution of data on the cost of insuring risks (agreements on premiums charged, or exchange of individualised information on premiums or other confidential or commercially sensitive information always being prohibited); and (ii) agreements on co-(re)insurance (consortia and other agreements) of categories of risks up to market shares of 20% and 25% for co-insurance and co-reinsurance, respectively, provided the conditions of the IBER were met, such as members being free to provide insurance independently or with other insurers.
Arrangements not meeting the conditions of the IBER were not necessarily anticompetitive, if they satisfied the conditions for individual exemption under Article 101(3) TFEU.
Consequences of expiry of the IBER
The expiry of the IBER does not mean that arrangements previously covered by it are anticompetitive. However, the convenience of the IBER was that if the conditions of the IBER were met, then the parties could assume that there was compliance with competition law without carrying out a detailed self-assessment.
In 2010, the Commission had removed agreements on standard policy conditions and on technical standards for security devices from the scope of the IBER. Such agreements have, since then, been subject to individual assessment by the parties under Article 101 TFEU.
As to whether the IBER principles may be assumed to continue to apply in practice, its principles would offer some guidance as to the Commission's thinking on such agreements.
In the case of agreements on the compilation and distribution of data, there is formal guidance from the European Commission Guidelines on Horizontal Agreements (the section dealing with information exchange). In particular, no individualised information should be distributed, unless a sufficiently long period, such as a year, has elapsed before individualised information on premiums or other commercially sensitive information, may be disclosed. However, information that is generalised and aggregated may be distributed.
In the case of co-(re)insurance, the Commission has stated that it is uncertain whether the conditions set out in the IBER can necessarily be relied on for the broad categories of co-(re)insurance that exist, so care should be taken. 'Self-assessment' of such arrangements should, therefore, be carried out. Even under the IBER, of course, in the case of co-(re)insurance arrangements where even one insurer has had a significant share in a particular type of risk, the market threshold has been exceeded, bringing the agreement outside the IBER.
In relation to ad hoc subscription arrangements for the insurance of a given risk, the position under competition law should remain unchanged, given that it was uncertain whether the IBER applied to such agreements in any event. As before, a similar process of self-assessment of such ad hoc subscription arrangements should take place. As a general principle, it may be expected that co-(re)insurance of a single risk should be likely to produce lesser effects on competition than an agreement setting up a pool or group of insurers covering a given of category of risk - on the assumption of course that there is competition between lead insurers at the time of placement of the risk.