On 26 August 2010, the European Commisson (the Commission) opened a competition investigation into the maritime insurance sector, in particular the agreements between the Protection & Indemnity (P&I) Clubs within the International Group of P&I Clubs (the International Group), a worldwide association of thirteen P&I Clubs.
P&I Clubs are mutual non-profit making mutual associations that provide P&I insurance to their member ship owners. The P&I Clubs which are members of the International Group operate agreements between themselves containing rules on the sharing of insurance claims and joint reinsurance and on the contractual relationships between the P&I Clubs and their members.
In February 2009, a 10 year exemption expired, which had been granted to the International Group by the Commission under Article 101(3) of the Treaty on the Functioning of the European Union (TFEU). The agreements between the members of the International Group are not automatically covered by the new competition block exemption for the insurance sector that came into force in April (see previous blog post here) because the market shares of the parties involved are above the relevant thresholds provided for by the block exemption.
The aim of the Commission's investigation is to examine whether certain provisions of the agreements may lessen competition between P&I Clubs and restrict the access of commercial insurers or other mutual P&I insurers to the relevant markets, contrary to Article 101(1) of TFEU.