EC competition review issues industry ultimatum

The Commission is concerned that alignment of premiums could breach competition law while broker remuneration will be looked at as part of the IMD review

All sectors of the commercial insurance industry have been given an ultimatum by the EC competition commission to address practices that it believes could be in breach of competition law or face enforcement proceedings. On publishing its final report on the business insurance sector inquiry, the competition commission highlighted two main areas of concern: premium alignment in the reinsurance and coinsurance of large risks via the subscription market and the remuneration of insurance intermediaries. At the same time it raised serious doubts about whether the block exemption for insurance will be renewed when it expires in 2010.