During 2014 and 2015 the Croatian Competition Agency (CCA) carried out proceedings against the Croatian Insurance Bureau (CIB) and 12 undertakings which were members of the CIB.(1) The logistically complicated proceedings were triggered when the CIB revoked the power of Generali Insurance to issue motor insurance certificates (also known as 'green cards') on the basis that the CIB's decision constituted a prohibited agreement. The issues of a prohibited agreement and distortion of competition arose because the CIB members had powers in relation to Generali Insurance through the CIB's decision-making mechanics.

In the CIB's view, and consequently that of its members, the advertising activities undertaken by Generali Insurance had been unlawful and allegedly contravened the Insurance Act.(2) However, the CCA suspected that the CIB's decision was intended to discipline Generali Insurance, which undercut existing prices.

Legal framework

The insurance industry is extensively regulated and falls under the scrutiny of the Croatian Financial Services Supervisory Agency (HANFA). In the course of the cartel proceedings, the CCA established that the CIB performs insurance activities of general interest based on a separate law and issues motor insurance certificates at the national level. CIB membership is mandatory for all insurers engaged in compulsory motor insurance.

Before January 1 2008 all insurers active in the compulsory motor insurance market had to adopt common insurance conditions and calculate their premiums on the basis of a fixed functional premium.

After this date, the undertakings continued to apply the common premium calculation as if it had been independently set. In 2008 when two undertakings wanted to change the commonly accepted joint conditions and premiums, they did not obtain the necessary clearance from HANFA. When HANFA asked them to adjust their prices so that they were in line with actuarial principles and practice, the undertakings abandoned the new price lists.

All undertakings therefore applied almost identical premiums from 2008 to 2013. However, according to the CCA's findings, after July 1 2013 – when the requirement for HANFA to approve insurance price lists was lifted – insurance conditions and premiums changed due to the liberalisation and strengthening of competition in the market. This was reflected in a sharp decline of the total gross written premium and the average premium paid for private motor insurance. For example, in 2014 the total premium was 20.1% lower than in 2013 and the average premium was 21.34% lower than in 2013.(3)


The CCA presented no evidence indicating that the undertakings had concluded a prohibited agreement before the CIB revoked the power of Generali Insurance to issue green cards. The CCA concluded that all undertakings had applied almost identical premiums from 2008 to 2013, but this was a result of the specific nature of the market and the regulatory framework.

In addition, based on all of the facts established by the CCA, the decision to revoke the power of Generali Insurance to issue green cards appeared to have no anti-competitive effect. The CCA ruled that there was no evidence that the decision constituted a prohibited agreement either by object or effect.

The fact that the CIB's decision might not have complied with the applicable regulation did not mean that a prohibited agreement was in effect as per the competition rules. In this respect, the CCA stated vaguely that for a decision to constitute a prohibited agreement, it must have distortion of competition as its object or effect, which was not supported by the analysed facts. Therefore, the infringement was not established.


Irrespective of the above, the CCA noted in its decision that it is not the role of undertakings to control the operation of their competitors – either independently or via trade organisations (in this particular case, via the CIB). If the parties concerned thought that Generali Insurance had breached the law, they should have reported these infringements to HANFA. Although the statute of the CIB empowers the board to revoke the right of any member to issue green cards, the CCA is of the view that these powers cannot be used to punish activities that are not directly related to green card issuance.

The CIB and its board – which is made up of representatives of all undertakings engaged in compulsory motor insurance – should therefore refrain from imposing penalties on its members, particularly as this is a regulated market with a sector-specific regulator.

For further information on this topic please contact Mislav Bradvica attorney at law in cooperation with Schoenherr by telephone (+385 1 4813 244) or email ( The Schoenherr website can be accessed at


(1) The proceeding encompassed almost all relevant players on the insurance market.

(2) Irregularities also arose from the official decision of HANFA.

(3) De facto deregulation of the compulsory motor insurance market happened only after July 1 2013. Since then, clearance from HANFA in respect of insurance conditions and premiums is not required.

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