The European Commission has published the final report on its investigation into business insurance practices within the EU states.
The report states that, "long-standing and widespread industry practices in the reinsurance and coinsurance markets involving the alignment of premiums" could lead to "higher prices for large risk commercial insurance".
Certain practices within these areas, including the alignment of premiums, long-term contracts in national markets leading to cumulative market foreclosure, as well as the transparency of remuneration, have all come to the attention of the Commission as part of its investigation into the competitiveness of the sector.
Whilst the industry has been operating under a block exemption regulation from the competition rules since 2003, this exemption is due to expire in 2010. The Commission has not come to a conclusion whether it is justifiable that the insurance sector keeps this exemption and it will be engaging in dialogue with the industry with an aim of reviewing the position conclusively in March 2009.
Competition Commissioner Neelie Kroes commented: "Today's report shows that the Commission is serious about making markets work better, even where that means we need to question some established market practices when these may be harmful to consumers and competition. I invite the industry to respond positively to the findings of the report and, where necessary, to reform the relevant business practices."