Risk management body pushes EU on sharing policy wordings.
Airmic has thrown its weight behind the campaign to to allow insurers to continue to share certain confidential information despite pro-competition laws.
The risk managers’ trade association has made a submission to the EU Commission, calling for the extension of the block exemption, which allows insurers to share policy wordings and some administrative arrangements when co-writing large risks.
The EU’s Directorate General for Competition is investigating whether to allow the practice to continue when the current exemption expires in 2010.
In its submission, Airmic argues that the exemption encourages competition by making it easier for new players to enter the market when they might otherwise lack the resources to participate in very large insurance programmes. It also guarantees the buyer consistency of policy terms.
Kip Berkeley-Herring, chair of Airmic’s Insurance Steering Group, said: “We believe that the block exemption acts in the interests of commercial insurance buyers, who would otherwise have less choice. This is one of those situations where allowing suppliers to co-operate in a few well-defined areas actually increases the amount of competition out there.”
The association does, however, support proposals to allow the following market to compete on price, rather than automatically following the rate set by the lead underwriter.
Airmic members have an annual premium spend of more than £5bn.
Ferma (the Federation of European Risk Management Associations) has sent a detailed response to the EU, also backing continuation. In its submission, Airmic strongly supports the Ferma position.