Respond to questionnaire or face fines, European Commission tells insurers
Insurers have been threatened with tough fines if they fail to respond to the new wave of questionnaires sent out by the European Commission (EC) in its probe into anti-competitive practices.
About 250 insurance companies across the EU received the document during the past seven days. They have until 21 April to respond, or face penalties of 1% of their gross written premiums.
Experts predict brokers will soon face similar questionnaires.
The questionnaire, which is thought to have been sent to most UK insurers, requires respondents to provide "substantial quantitive and qualitative data" on their business.
It is understood that, as part of the questionnaire, insurers are required to provide quotes on three different risks.
Alexandra Kamerling, a partner at law firm DLA Piper Rudnick Gray Cary, said: "The topics are not too dissimilar to those contained within the trade association questionnaire last year. However insurance underwriters will be asked for more personal views."
Kamerling said she expected the intermediary industry to be involved at a later date.
Trade associations such as the ABI, LMBC and Biba were involved in similar consultations with the EC late last year.
Eric Galbraith, chief executive of Biba, said the industry and government had to work together to respond to the inquiry.
"General insurance in the UK is one of the most competitive markets," he said.
Mark Winlow, a director of consultancy LECG, said: "The Commission is coming at it as if there were something wrong in London. It thinks there is implied collusion in the way the market operates, for example in co-insurance. It doesn't understand how the market operates."
The EC launched the business sector inquiry under its competition rules in June 2005.
The move was in response to several competition investigations including Spitzer in the US and aviation insurance in London post 11 September, which led the EC to suspect infringements of its competition rules.
Areas of attention in the UK include the London subscription market, covering areas such as standard policy conditions set by committees and associations, and agreements with brokers.