Insurance Center

EC Makes It Available To All That It Wants To Favor Extensions in Respect to Insurers Block Exemption That Have Already Been Welcomed By RMA

The 16-member Federation of European Risk has released a statement by which it agrees to welcome the European Commission (EC) Report, a report that favors renewal of the Insurance Block Exemption Regulation (BER).

In recent months the EC has been determining whether or not this exemption, which acts to exclude insurers from otherwise applicable anti-competition regulations, should be extended. These conditions were first granted in 2003, and at the present time are scheduled to expire in 2010. One of the present organizations acting to extend this exemption is FERMA.

It was pointed out in the present bulletin that the legal influence that would be provided by the current BER has brought about cooperation among insurers to make available competitive insurance markets with enough capacity to arrive at the needs of large worldwide insurance carriers. In accordance with this, it is FERMA’s belief that, to the as much as SPCs will appear outside of the BER, the Commission should as a minimum, make available guidance so as to make available ample comfort and legal assurance beginning from March 2010.

The statement gained approval from the EC's actions on together calculations and looking into, an issue that had been previously raised by bigtime commercial buyers. In the statement it is agreed that theirs is an ongoing need for a BER in this area. Agreed upon calculation on the real cost of taking a chance is right there in the middle as regards market availability in regards to new entrants. At the same time, the Commission is thinking about clarifying those existing boundaries and limiting the range of exemption to what might be deemed to be valuable information exchange. In connection with this FERMA is happy about the transparency initiative, which would make available to insurance buyers the opportunity to take part in and in addition to have access to data that is presently as a joint effort generated by insurers.

In regard to pools, the Commission discovers that renewal of the BER is required at least as a minimum to clarify the safe harbors, but in addition to this to induce compliance by pool members. At the same time as this, FERMA is in agreement that this approach while make recognizable the fact that pools should act as an absolute last resort for the covering of risks that are not old or difficult to insure where a big time capacity is needed. FERMA is of the opinion that pools should be a second choice to commercial type insurers and that they should function only within a competitive environment. FERMA plans to articulate views and make recommendations to ensure that pooling arrangements operate to the benefit of large commercial buyers.

Marie-Gemma Dequae, the President of FERMA, said that FERMA is happy with the Commission's agreement as regards the renewal and will as a rule continue to be closely a part of the debate for the receiving of a renewed BER next year.