Following a recent decision of the Italian Court of Cassation, in case of illegal agreement between insurance companies aimed at increasing the premiums for third party liability policies over the threshold generally allowed by the market, the companies will be bound to compensate the damage suffered by the consumers unless they are able to provide evidence attesting the inexistence of any relation between the raise of a specific premium and any illegal agreement amongst them.
By means of the decision no. 10211 of May 10th 2011, the Supreme Court of Cassation confirmed the judgment given by the Court of Appeal of Salerno, condemning an insurance company to pay for damages compensation, as a consequence of its infringement of the competition rules.
In the case under discussion, the unfair conduct of several insurance companies had been already ascertained and sanctioned at an administrative level, by the Italian Antitrust Authority.
Indeed, as proved during the administrative proceedings, neither the frauds against the insurers nor the high number of exclusive agency agreements commonly used in Italy, may justify the raise of the premiums -up to 96,55%, in some cases- carried out between 1994 and 2000 (63% higher than the average amount applied in the other European countries).
According to the Antitrust Authority, the reason behind these increases can be found in the exchange of sensitive data between the insurers. This trade referred not only to data relating to the nature and entity of the risk (therefore data which can be used to determine the pure premium and which are legally exchanged on the market) but also data concerning taxes, costs, expenses and profits of each company.
This information, by excluding an important factor of uncertainty in the determination of the premiums, had allowed the companies to evaluate and apply higher premiums with respect to those that would have been applied under correct competition rules.
Hence, the insurance companies were ordered to stop the illegitimate conduct and were sanctioned by the Antitrust Authority.
Following this decision, a consumer initiated a proceeding to obtain compensation against one of the above mentioned companies.
In this circumstance, the insurance company had to prove that the raising of the premium specifically claimed, was due to -legitimatecircumstances, not in any way connected to the illegal agreements occurred between the companies (which had already been ascertained).
Since the company was unable to provide any evidence in this respect, the Court declared that the insured subject was entitled to be indemnified for the damages suffered.
This orientation has been fully shared by the Supreme Court that, finally, condemned the insurance company to pay 63,62 Euro to the consumer: a small but significant amount for all the insurance companies that may be involved in the near future in similar cases and may be asked by a multitude of single individuals to be indemnified.