Decision on block exemption ruling may shut out smaller firms

Small insurers fear they will be excluded from vital information if the EU’s block exemption ruling (BER) expires.

The BER makes it clear that insurers that jointly compile calculations and tables must share their findings across the industry.

If the BER expires in March 2010, large insurers will probably still be allowed to share information, but will not be compelled to pass it on.

Eithne McCarthy, a project leader at the European Commission’s competition directorate, told an update meeting in London on Monday that the commission had listened to the industry’s concerns.

“There was a fear that larger insurers might co-operate and exclude smaller insurers. We have to consider what the effect on smaller insurers would be. Would the same level of co-operation take place if the BER were not there?” she said.

The commission is due to announce at the end of next month whether it will let the BER expire or make amendments.

The BER currently exempts insurers from four areas of competition law: joint calculations, insurance pools, standard policy conditions and models on profits, and security devices.

If the BER expires, and Insurance Times understands the industry is pessimistic about its survival, insurers will have to tighten up self-assessments on compatibility with competition law.