In a final decision published on 23 September 2008, the Düsseldorf Court of Appeal recently annulled a decision taken by the German federal cartel office (the Bundeskartellamt) prohibiting the creation of an insurance pool and gave some crucial guidance on the criteria to be applied to define such pools with respect to the insurance industry. The judgment, however, did not resolve the fate of insurance pools after the expected expiry of the European Block Exemption (the BER) for insurance undertakings (Regulation 358/2003/EC). Article 7 of the BER which will expire in March 2010 states that certain pools are exempt from Article 81 where their relevant market share falls below 20 per cent.
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 market definition of insurance pool 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 of “professional indemnity”.
This wide market definition allowed the court to apply the 20 per cent de minimis threshold provided for in the BER. As the block exemption is set to expire the judgment only means temporary relief for the industry.