Tuesday, 12 September 2017

Are you ready for the new Insurance Competition Regime?

September 12, 2017

On 30 March 2017, the EU Insurance Block Exemption Regulation 267/2010 (IBER) expired, removing the automatic exemption from EU antitrust rules for (a) joint compilations, tables and studies; and (b) insurance and co-insurance pools. Going forward, parties to such agreements will have to “self-assess” to ensure that their agreements comply with EU competition rules. 

What does self-assessment involve? 

Self-assessment requires the parties to an agreement subject to EU law to ensure their agreements satisfy the four exemption tests set out in Article 101(3) of the Treaty of the Functioning of the European Union (TFEU). All four exemptions must be satisfied to achieve compliance.  

This means the parties must demonstrate that their agreement:

(1)  contributes “to improving the production or distribution of goods or to promoting technical or economic progress” - i.e. whether it produces efficiency gains for the parties such as cost savings, better use of resources and increased productivity. 

(2)  allows “consumers a fair share of the resulting benefit” - i.e. whether consumers also derive benefits, such as additional coverage or lower premiums. 

(3)  does not impose on the parties “restrictions which are not indispensable to the attainment of these objectives” – i.e. the agreement does not contain unjustifiable restrictions on the parties, such as post-agreement non-compete clauses or penalties for early withdrawal.

(4)  does not lead to the elimination of “competition in respect of a substantial part of the products in question” - i.e. the parties’ market power does not lead to competitors being driven out or prevented from entering the market. 

The process of self-assessment is therefore a mix of economic and legal tests. A self-assessment report will make recommendations for any changes required to the examined agreement to ensure compliance with EU rules.

The Commission has issued high level “Guidelines” to assist parties to self-assess. These Guidelines do not confer exemptions but explain the Commission’s enforcement policy and give guidance to parties on how to approach compliance. The Commission is bound to follow its Guidelines unless it gives reasons for departing from them in a specific case. 

Recommended action

After the expiry of IBER, parties will be obliged to ensure future compliance through self-assessment.  Such routine compliance measures will become a feature of good commercial management and practice.  

Self-assessment of insurance agreements will pose a challenge to the industry. However, there exists sufficient past case law and other sources of EU guidance to enable parties to agreements to self-assess with confidence that they will be able to comply with the rules. 

The European Commission enforces EU competition rules on parties to any agreements impacting the EU market: for UK based insurers, there will therefore be a continued requirement to comply with EU rules following Brexit. It is also thought likely that UK competition law will continue to be harmonised with EU rules, to ensure convergence and the avoidance of double-jeopardy.

Source: http://www.incelaw.com

8 comments :

  1. This new Insurance Competition Regime is looking awesome for one who want this of themselves. these rules are looking much better then before. Good work keep it up.

    ReplyDelete
  2. Its my great pleasure to visit your blog and to enjoy your great posts here. I like it a lot. I can feel that you paid much attention for those articles, as all of them make sense and are very useful.  Seguros De Autos

    ReplyDelete
  3. Facultative Reinsurance: This sort of reinsurance is utilized while thinking about a specific basic danger of an individual contract. It is the reinsurance of all or part of a solitary strategy after the terms and conditions have been arranged. It diminishes the surrendering company's presentation to chance from an individual arrangement. It is non-mandatory.Best reinsurance company

    ReplyDelete
  4. With increasing pressure in this fast-growing field and recent advances in cloud insurance softwares, it’s far too easy to get left behind. SchemeServe can remove these difficulties and put you in the forefront.

    ReplyDelete
  5. A shoddy arrangement is nothing more than trouble, if the insurance organization for reasons unknown or another can't satisfy the case in case of an awkward demise. https://www.bmmagazine.co.uk/business/a-guide-on-term-life-insurance-indemnity-in-perth-western-australia/

    ReplyDelete
  6. Its my great pleasure to visit your blog and to enjoy your great posts here. I like it a lot. I can feel that you paid much attention for those articles, as all of them make sense and are very useful. comprehensive travel insurance - auto quotes

    ReplyDelete
  7. An agreement of Insurance appears when an individual looking for insurance security goes into an agreement with the back up plan to repay him against loss of property by or accidental to fire and additionally helping, blast, and so on.duracell employee car insurance discount

    ReplyDelete