In a final decision published on 23 September 2008, the Düsseldorf Court of Appeals recently annulled a decision taken by the German federal cartel office (Bundeskartellamt) prohibiting the creation of an insurance pool and gave some crucial guidance on the criteria to be applied on the market definition with respect to the insurance industry. However, the judgement did not resolve the fate of insurance pools after the expected expiry of the European block exemption for insurance undertakings.
The case related to an insurance pool which had been created by several large German insurance companies to provide professional indemnity cover to accountants. Overruling the view of the federal cartel office, the judges did not qualify this pool as an unlawful cartel agreement and found that the federal cartel office’s market definition was too narrow. The court stated that within the insurance industry, markets need to be defined with respect to the type of the insured risk. This means that all professional indemnity policies for lawyers, accountants, tax counsellors and notaries belong to the same market segment.
This wide market definition allowed the court to apply the 20 per cent de minimis threshold provided for in the block exemption. As the block exemption is set to expire the judgment only means temporary relief for the industry.