Why There Might Not Be Many Damage Claims Arising from the Spanish Property Insurance Cartel?
39 Pages Posted: 19 Nov 2010
Date Written: November 8, 2010
Inherent Defects Insurance (IDI) for new housing buildings is mandatory in Spain since May 2000. The instauration of this legal requirement prompted an upsurge in the IDI market. Being confronted with wild competition, the major insurance carriers active in that market promoted a minimum price agreement involving also IDI reinsurers. The role of reinsurers was key in propagating the effectiveness of the minimum price agreement all over the market.
This article examines the features of the Spanish IDI cartel, uncovered by the Spanish National Competition Commission in 2009. The companies involved were punished with the largest fine ever imposed by competition authorities in Spain. However, potential damage claims by cartel victims may face several hurdles. Some of them are related to some specific features of the cartel itself, others have to do with the reluctance to damage claims for competition violations in Spain.
Keywords: Property insurance, cartel, inherent defects insurance (IDI), damage claims
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