In a response submitted to the European Commission on Tuesday 4 November, the Federation of European Risk Management Associations (FERMA) has called for renewal of the Insurance Block Exemption Regulation (IBER) for (re)insurance pools, citing the need for the largest and exceptional risks continuing need for an exemption from EU competition rules.
The Commission launched a consultation in August to begin its assessment whether the claimed benefits for the insurance market and customers of insurance pooling still justify the special treatment they receive from EU competition authorities. The Commission must provide a report to member states before 31 March 2016 with the objective of deciding on its renewal in 2017.
FERMA’s president Julia Graham stated: “We represent consumers and users of these (re)insurance pools. Non-renewal of the block exemption would change radically the coverage of certain type of risks, but not widen choice for commercial insurance buyers. We believe there is still ground for an exemption from EU competition rules for the IBER.
“If these rules are being challenged and such pools could fall within the scope of EU competition laws, then it is our priority to ensure that policymakers are well aware of the unintended consequences of a non-renewal decision on the scope of coverage and the level of prices for our largest and most exceptional risks.”
FERMA’s position is that the “current IBER provides a legal certainty of exemption from EU competition rules for every (re)insurance pool in the European Union, and this benefits all stakeholders: providers of insurance capacity and users.
“Without the exemption, such pools would come under the EU general guidelines on horizontal cooperation agreements which allow wide discretion to national competition authorities.”
FERMA said it “believes this change would result in the use of expensive legal services to assess the compliance of such arrangements in multiple jurisdictions diverting investment from core, value generating activities.
Source: Federation of European Risk Management Associations (FERMA)
Was this article valuable?
Here are more articles you may enjoy.