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Insurance Block Exemption Regulation to end in 2017, Commission confirms

The European Commission has confirmed that its Insurance Block Exemption Regulation (IBER) will lapse on 31 March 2017 with no replacement. 16 Dec 2016

The IBER exempts certain types of information exchanges and 'pooling' agreements between insurers from the general EU competition law prohibition on anti-competitive agreements.

The IBER exemptions relate to the "exchange and/or aggregation of data in statistics and studies and to the joint insurance and/or reinsurance of risks in pools. This co-operation has the potential to improve the quality and price of insurance products but also carries the risk of reducing competition between participating insurers," the Commission said.

The Commission reached the provisional conclusion in March 2016 that it would not renew the IBER when current legislation expires. That followed a review in 2010 when it found that two out of the initial four exemptions were no longer needed.

In March, it said that the remaining exemptions no longer appeared to be necessary. Guidelines published in 2011 already offer guidance on how to assess the conformity of joint compilations, tables and studies with the antitrust rules, it said, while there is a market trend away from institutionalised pools formed on insurers' own initiatives and towards more pro-competitive forms of cooperation between insurers and reinsurers, often set up by intermediaries or brokers.

"As these are arguably more likely to produce shared efficiencies, it seems doubtful that the current block exemption sufficiently protects effective competition in this field while providing benefits to consumers," the Commission said in March.

Competition law expert Robert Eriksson of Pinsent Masons, the law firm behind Out-Law.com said: "The Commission has now confirmed that the remaining exemptions are unnecessary. A public consultation, fact finding process and impact assessment have reinforced the preliminary conclusions it reached in March and the preferred policy option is therefore to let the IBER expire. It has also said that national competition authorities do not oppose the expiry, and that those with concrete experience with the IBER explicitly support its expiry."

"The expiry…does not mean that these forms of co-operation become unlawful. Rather, insurers, as all other companies doing business in the EU, will need to assess their co-operation in the market context to see whether it is in line with antitrust rules," the Commission said in its statement.

The Commission will continue to monitor and evaluate how insurers adapt to the change, particularly for the first 12 months after the IBER expires, it said.

"The Commission said in the spring that it might issue specific guidelines on competition issues relevant to the insurance market if the IBER exemptions are not renewed. Having now reached its final decision, the Commission has concluded that it is not prepared to adopt such guidance at this stage but will explore the need if the expiry leads to pronounced legal uncertainty," Eriksson said.

"However, the Commission has included some steer on how to assess the types of cooperation currently covered by IBER under its more general horizontal guidelines in its impact assessment report. While it has said it does not expect any negative impact from the lapse of the IBER or any difficulties for insurers to self-assess cooperation under these guidelines, the Commission is also prepared to meet insurers to clear up any such difficulties where necessary," he said.