EU Demands Italy Lift Auto Rate Freeze

October 27, 2000

The European Commission, the European Union's administrative arm, has given the Italian government three weeks in which to end its price freeze on automobile insurance premiums, in effect since the beginning of the year.

The Commission found that the restrictions on premium increases,enacted as part of a larger package of anti-inflationary measures, were incompatible with the unrestricted commercialization of insurance products within the EU, as guaranteed by the directives governing the free movement of services.

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It found that the freeze was not in effect part of a general effort to control prices and wasn't in the public interest. The Italian government hasn't as yet indicated whether it will contest the decision.