View this article online: https://www.insurancejournal.com/news/international/2010/04/26/109268.htm
The Federation of European Risk Management Associations has welcomed the adoption of the new European Union insurance block exemption regulation (BER) by the European Commission with reservations.
“The entry into force of the BER ends an intense two-year period of consultations in the course of which FERMA submitted proposals and actively defended the views and interests of risk managers,” said the organization’s press bulletin.
FERMA approved the EC’s renewal of the exemption for co(re)insurance pools. However, it added that the “new conditions and revised market share thresholds will trigger fresh examination of existing pooling arrangements.” Nonetheless, FERMA said it “expects that these revised conditions for the common coverage of certain risks will benefit corporate insurance buyers.”
In an earlier bulletin, FERMA had questioned the EC’s preliminary decision not to renew the exemption concerning cooperation between insurers on standard terms and conditions (SPC) [See IJ web site – https://www.insurancejournal.com/news/international/2009/12/14/105950.htm.] The EC determined that the exemption was unnecessary as “‘as they are, like banking agreements, a well established industry norm.”
FERMA accepted the decision, but also, given the importance of these practices, expressed support for the EC’s “commitment to provide guiding principles on horizontal cooperation,” adding that it is “hoped that, compared to the rules for exemption that were previously in place, no substantive changes will be introduced that would have the effect of hindering or reducing the incentives for efficient and beneficial cooperation.”
The risk managers’ organization also approved the “balanced approach” that the EC “has adopted in relation to cooperation on compilations, tables and studies. In particular, under the new exemption, risk management associations may now seek, under reasonable conditions, access to actuarial data generated by insurers. FERMA looks forward to collaborate actively with insurer associations in order to give meaningful effect to data access.”
In conclusion, FERMA addressed the special considerations needed in regulating the subscription market, which is a very important concern for Lloyd’s of London. The organization said it “continues to believe that the practice of ad hoc co-(re)insurance arrangements on the subscription of industrial risks, as part of the basic functioning of the insurance market in Europe, has been working properly and proved its benefits. This practice should be permitted and allowed to continue as it brings cognizable efficiencies under Article 81.3 of the EC Treaty.”
Source: The Federation of European Risk Management Associations – FERMA