As previously reported here, the European Commission (the Commission) published its revised draft BER for the insurance sector on 5 October 2009.  Regular followers of the blog will recall that the draft regulation proposes to renew two of the four categories of agreements exempted by the current BER, namely information exchange and insurance pools, with certain amendments. The new BER would no longer cover the remaining two categories of agreements protected by the existing BER, namely the establishment of non-binding policy conditions and agreements on security devices.  This means that it will be up to firms to self-assess whether such agreements fall foul of the prohibition of anticompetitive agreements in Article 81 EC Treaty.

The Commission has invited comments on the draft by 30 November 2009. Market groups have submitted their views on the draft to the Commission. The London Market Association has expressed disappointment that the draft omits a provision for “standard policy conditions”. It feels that the case for continuing to provide protection for this important activity is strong and that the Commission has failed to state clearly its reasons for dropping this provision. The Association of Insurance and Risk Managers, whose members have a premium spend of more than £5billion a year, has told the Commission the current arrangement is “pro-competitive”. The International Underwriting Association of London’s members are anxious that the protective scope of the current regulation should be maintained. They consider that it has helped to provide insurers and reinsurers with a relatively straightforward framework of competition law within which they can cooperate to produce model legal wordings that are clear to all.

Interested parties who wish to comment on the draft BER now have only a few weeks left within which to do so. While it is anticipated that wholesale changes to the draft are unlikely, further submissions could help tip the balance on some points.  The new BER is due to come into force on 1 April 2010.  After that date, reinsurers who have until now relied on the BER’s safe harbour for protection of their pools will need to study their arrangements closely to assess their compatibility with competition law.

The revised draft BER is available by clicking here. Comments can be e-mailed to [email protected] quoting the reference”HT.1221 – stakeholder input”.

On 2 November 2009, EAPD launched its UK Competition Practice with the arrival of leading Competition expert, Becket McGrath. Becket, who is a past Branch Director at the Office of Fair Trading, advises clients on all aspects of EU and UK competition law, with an emphasis on behavioural issues, competition litigation, merger control and compliance. He has advised insurance companies on competition law compliance and on the Commission’s insurance block exemption review. If you would like to speak to Becket, please contact him on [email protected] or +44.20.7556.4125.